Los Angeles, Oct 23 - McDonald's Corp, Chipotle Mexican Grill Inc and the Cheesecake Factory Inc each reported higher-than-expected profits Thursday, but analysts remain hungry for meaningful sales growth.
McDonald's and Chipotle, Wall Street favorites, are the among the rare restaurant operators still reporting higher sales at established restaurants as a lengthy recession has damped diners' appetite for meals away from home.
But even McDonald's and Chipotle need stronger sales to deliver the kind of sustained and reliable growth that investors want.
For its part, the inventor of the Dollar Menu and Happy Meal warned that U.S. same-restaurants would weaken in October. Chipotle is getting a profit bump from new restaurant openings.
McDonald's Chief Executive Jim Skinner said on a conference call that October U.S. sales comparisons at established restaurants are expected to be flat to slightly negative.
"We do not believe, however, that this is a change in the overall trend in performance in the U.S.," Skinner said.
October U.S. same-restaurant sales at McDonald's "could drift into negative territory for the first time in more than six years," Jefferies & Co analyst Jeff Farmer said.
At Chipotle, price increases partially offset the impact of slower traffic.
Restaurants across the board have slashed costs to protect profits, but analysts are warning that the benefits are running their course. At the same time, discounting is rampant, the U.S. jobless rate is approaching 10 percent and higher menu prices are hard for consumers to swallow.
Falling food prices have boosted earnings this year, and a reversal is always a risk.
While McDonald's and Chipotle grappled with high expectations, Cheesecake Factory topped relatively lower hurdles by posting smaller-than-expected declines in same store sales and total revenue.
Elsewhere Thursday, BJ's Restaurants Inc's higher quarterly profit missed analysts' target. The casual dining chain also said the tough economy would continue to pressure guest traffic into next year.
McDonald's shares finished up 2 percent to $59.50 on the New York Stock Exchange. Chipotle shares gave back nearly all of their regular session gains, falling to $86.00 in extended trade.
Cheesecake Factory's stock added 2 percent to land at $18.50 in after-hours action and BJ's shares fell 7.8 percent to $15.68.