Shares of Bojangles are sizzling as the purveyor of Southern chicken and biscuits becomes the latest restaurant stock to experience a pop on the first day of trading.
Bojangles priced its shares last night at $19 apiece, but posted a roughly 32% gain on Friday as investors jump into another new restaurant chain with the hopes that perhaps someday, the 1,400-strong restaurant chain can become a bigger player in a restaurant category that has been dominated by stock market darlings like Chipotle (CMG).
Investors are feasting on the restaurant’s shares because they are impressed by “the story of who we are, the quality of our food and the incredible value that you pay for that quality,” CEO Clifton Rutledge told Fortune. He touted Bojangles streak of 20 consecutive quarters of same-store growth.
U.S. fast-casual and quick service restaurant initial public offerings have gained an average of 86% on the first day, according to IPO ETF manager Renaissance Capital, so it was likely that Bojangles shares were poised to pop on Friday.
Shares more than doubled for peers like Shake Shack (SHAK), Noodles & Co. (NDLS) and Potbelly (PBPB). But not all those stocks have been able to keep up with Wall Street’s high expectations. Noodles & Co, in particular, has had a tough time.
Bojangles claims it essentially straddles two segments of the market: fast casual and quick service. It has drive-thru service and an average check price of $6.68, more similar to the business model of a McDonald’s (MCD).
But Bojangles is trying to piggyback off the fast casual trend, saying the quality of its food and the freshness of its ingredients are “attributes that we generally share with fast-casual restaurants.”
Founded in 1977, the core Bojangles menu centers on “chicken ‘n biscuits” that remains largely unchanged. Unlike a lot of fast casual peers, it pulls in a lot of business from breakfast. Rutledge said 38% of the company’s business comes before 11 a.m.
“Because we serve breakfast all day, every day, we do believe that gives us an advantage over our competitors,” Rutledge said. While a lot of competitors have more aggressively tackled the breakfast occasion, which has become a fast growing pocket of the day for restaurant operators, Bojangles continues to see its strongest growth from that part of the day.
Like a lot of fast-casual chains that recently hit the public market, Bojangles’ restaurants are primarily found in one region of the country. Its locations are concentrated in the Southeastern U.S.
There were 622 Bojangles restaurants at the end of last year, though the company believes it can boost its’ system-wide restaurant count by about 7% to 8% annually and eventually reach more than 3,500 locations across the U.S.
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