P.F. Chang's Enters South America - Analyst Blog
02 Giugno 2011 - 12:30PM
Zacks
Scottsdale, Arizona-based
P.F. Chang's China Bistro, Inc (PFCB), which owns
and operates two restaurant concepts P.F. Chang’s China Bistro
(Bistro) and Pei Wei Asian Diner (Pei Wei), recently inked a deal
with Alsea, S.A.B. de C.V. to expand in South America.
Alsea is a Mexico-based company
primarily engaged in the food service sector with about 1,000
locations. The company franchises several renowned chains including
Burger King, California Pizza Kitchen Inc. (CPKI),
Domino's Pizza, Inc (DPZ), and Starbucks
Corporation (SBUX).
As per the agreement, 17 P.F
Chang’s restaurants are expected to open in Argentina, Chile and
Colombia over the next 10 years. The first outlet will come up in
Santiago, Chile in early 2012.
We believe that P.F Chang’s
partnership with Alsea will enhance its market share in South
America going forward, as Alsea operates more than 150 restaurants
in countries such as Argentina, Brazil, Chile, and Columbia.
Moreover, we are certain that people in South America would love
P.F. Chang’s high quality food and high energy atmosphere.
Earlier, in 2009,
P.F. Chang's had signed an agreement with Alsea to
open 30 restaurants in Mexico by 2019. Six P.F.
Chang's restaurants are currently operational in Mexico.
P.F. Chang's is expanding its brand
in the international market through licensing agreements as it
reduces the company’s capital intensity. Moreover, under the
license agreements, the company is entitled to receive an initial
territory fee, store opening fees and ongoing royalty revenues
based on a percentage of international restaurant sales.
In April, P.F. Chang's entered into
a licensing agreement with Interaction Asian Restaurants to develop
12 restaurants throughout Eastern Canada over the next 10 years. In
2011, the company expects to open two new Bistro restaurants and
five new Pei Wei restaurants.
P.F Chang’s holds a Zacks #3 Rank,
implying a short-term Hold rating on the stock. We also reiterate
our long-term Neutral recommendation on the stock.
CALIF PIZZA KIT (CPKI): Free Stock Analysis Report
DOMINOS PIZZA (DPZ): Free Stock Analysis Report
PF CHANGS CHINA (PFCB): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
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