If we are going to go out, if we are going to leave our couch where we watch Netflix (NFLX) or play Grand Theft Auto while we order Domino's Pizza (DPZ) on our iPhone, then it had better be for a bargain or an experience.
Darden Restaurants (DRI) offers the bargain. How can this stock be up six? First, because all of the snobs on Wall Street would never go to an Olive Garden. They would never be caught dead there.
But I've loved the stock forever because I take my vegetarian, salad-loving daughter and we play beat the house, meaning we re-order so much salad we just kill them. Of course the reality is they are making a ton of money with their family style fresh food and with their new technology, which makes ordering foolproof. I think that this was and is one of the great, underrated stories. That's especially true since they got rid of Red Lobster, which, I think, other than the schooner of beer, was pretty inedible and really fattening.
My only reservation with Olive Garden is that there are no reservations, so you have to go in off hours to be sure you get a table. That's a high-quality problem. And while it is true that at one time I did wear cargo pants to Olive Garden to take home some fabulous rolls -- okay many times -- my daughter's old enough to be embarrassed and that's no longer the game plan.
Darden gave you a twofer, shelling out $780 million to buy Cheddar's which is a fast growing fresh-food restaurant chain. The company sees the acquisition as adding 20 to 25 cents a share to earnings by the end of fiscal year 2018. The fact that a smart operator wants more restaurants shows you that the industry isn't dying, it's just some of the worst concepts that are.
Cheddar's got a $13 meal price point so it is pretty much in line with Olive Garden, depending upon what you order.
This acquisition comes on top of the decision by Popeyes PLKI to sell itself to Restaurant Brands (QSR) , the owner of Burger King and Tim Horton, another smart consolidation.
And let's not forget that Panera (PNRA) keeps hitting all time highs because it too represents a bargain and has very easy ordering and take-out.
As for Carnival (CCL) , here we go again with CEO Arnold Donald beating the quarter. The man who may be the best turnaround artist of our time delivered robust numbers and remains the steward of what I would call one of the most experiential vacations you can get at a very low price.
Again, I rely on my cruise-taking daughter to know what the attraction here is: inexpensive fabulous backgrounds for Snap (SNAP) and Instagram fashion shows and travelogues. Carnival's a bargain and at a time when the consumer is obsessed with frugality, it's a fantastic way to get away.
Now you could argue that these are isolated instances of the consumer being willing to get off his duff and spend. I would come back with, once again, if you can get a bargain -- and no one would ever say Olive Garden is expensive -- or you can go somewhere inexpensive that's purely experiential, then you have a hit on your hand that that's exactly what Carnival and its brethren produce 52 weeks a year all over the globe.