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Yum! Brands, Inc. (YUM), Panera Bread Co (PNRA), Brinker International, Inc. (EAT): Same Industry, Same Earnings Release Date, But Different Outlooks

Declining margins has been another theme in this industry for the first quarter of 2013. Goldman thinks that that restaurant EBIT margins are expected to be down due to fixed cost de-leveraging from lower sales. And Brinker International, Inc. (NYSE:EAT) has been a good example of this phenomenon. The company is expected to post EPS of $0.69 and revenue of $741.5 million.

However, despite an expected decline in margins, the quarterly results are expected to serve as a positive catalyst as the next quarter’s fiscal 4Q13 estimates may be too low. 4Q13 SSS growth of 2.8% (versus 1.6% consensus) and EPS of $0.80 (versus $0.76 consensus) is expected. Any forward management commentary about current sales trends may drive the shares higher. Disclosure around its remodels, its recent pizza roll-out and international agreements may also come into play to send the stock price higher.

Foolish Bottom Line

Panera Bread Co (NASDAQ:PNRA) and Brinker International, Inc. (NYSE:EAT) are recommended as buys on the basis of strong fundamentals and conservative estimates, respectively. On the other hand, investors are recommended to maintain a neutral position in Yum! Brands, Inc. (NYSE:YUM) given its weak Chinese outlook.

The article 3 Stocks: Same Industry, Same Earnings Release Date, But Different Outlooks originally appeared on and is written by Zain Abbas.

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