Investors finally are starting to reap some rewards after chewing on a little IPO gristle.
Premium steakhouse chain Del Frisco’s Restaurant Group (NASDAQ:DFRG) on Tuesday announced strong third-quarter results. Revenues increased 16% to $47.9 million as same-store sales improved by 3.5%. And adjusted earnings grew roughly 25% to $2 million, or 10 cents per share, which beat expectations for 8 cents. The good news sent DFRG shares up more than 6% by midday.
It’s part of a welcome reversal since Del Frisco’s challenging IPO back in late July. The company priced its deal at $13, which was below the $14 to $16 range, yet shares still saw no pop on its opening day. But since then, DFRG has had a nice run, with gains of about 23% including Tuesday’s movement..
Looking forward, there’s reason for continued optimism, too.
The steakhouse currently only boasts 33 locations across 19 states, clearly also has room to grow. It recently opened a location in Atlanta and will debut in Chicago this December, marking four openings for 2012. In Tuesday’s earnings report, CEO Mark Mednansky said the company also plans to open “four to five restaurants in both new and existing markets” in 2013.
DFRG also updated the lower end of its same-store sales guidance for fiscal 2012, from 3%-4% to 3.5%-4%.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.