Sean D. Emory
Founding Partner & CIO of Avory & Co., Avory Foundational ETF (AVRY)
First Watch is growing with self-funded discipline while the market is on edge about the consumer. Q2 2026 same-restaurant sales rose 3.4%, a 6.9% two-year stack, both beating guidance and peers. It committed to funding future growth from organic cash generation at roughly 50 new stores a year. x.comÂ
Shake Shack is starting to look cheap after a sharp selloff on beef-cost and consumer worries, despite solid growth and margins. Q2 revenue grew 17.2%, restaurant-level margins reached 23% and free cash flow is positive. It owns no real estate, so it is a bet on the brand, restaurant economics and expansion across its 703 restaurants. The key question is whether those margins hold as it grows. x.comÂ
The Cheesecake Factory at 25 times next-twelve-month earnings looks attractive as a short. Restaurant valuations can be highly cyclical, though past fast-casual names reached 55 times earnings with 20% growth. x.com x.comÂ
Casey's General Stores is getting interesting after a 15% drop, with store growth and owned real estate supporting value, though 25x earnings would be the preferred entry. It targets 120 new stores in FY27, and remodeled CEFCO sites see about 30% prepared food and dispensed beverage lifts. It owns 2,703 of its 2,944 stores, worth roughly $6.8B at $2.5M each, about 25-35% of its equity value, offering sale-leaseback optionality. x.com x.com x.comÂ
Casey's General Stores is a quiet compounder built on roughly 2,900 local monopolies in rural Midwest towns too small for rivals, where fuel draws traffic and fresh pizza earns the profit. About half its stores sit in towns under 5,000 people, and it is the fifth-largest US pizza chain. Inside margins run 41-42%, FY2025 revenue was $15.9 billion, and recent EPS grew 14-20%. It plans about 500 more locations over three years and has raised its dividend for 25 straight years. x.comÂ
Restaurant stocks, including Chipotle and Wingstop, are uninvestable right now, with too many better places for money. Most have slowing growth, rising costs and poor margins. Wingstop's growth and margins look better than most, but it is still not a buy. x.com x.comÂ
Shake Shack is an asymmetric setup: at about 1x sales with a 20%+ restaurant-margin model and $4m AUVs, upside far exceeds downside. Intact unit economics and its balance sheet let it keep adding stores through a slowdown from weak travel, low-end consumers, GLP-1s and inflation, unlike Portillo's balance-sheet or Sweetgreen's model problems; McDonald's did likewise in 2008-09. Same-store sales should stay solidly positive this year when most chains' won't. Execution lags; downside is maybe 30%. … Show more
Restaurant Brands International has been getting more attractive, with big operational changes underway behind the scenes. x.comÂ
Starbucks is a best-in-class operator in a higher-for-longer environment that will squeeze consumers and send them to the winners. April CPI rose 3.8%, hotter than expected, costing the Fed its best argument for a cut. CEO Brian Niccol delivered the first earnings beat in five quarters and a second straight quarter of traffic growth, the hardest thing to pull off when wallets are tight. x.com x.comÂ
Sweetgreen's comps are reaccelerating after traffic weakness from its lettuce-related illness scare. It has SG&A optionality, looks cheap on a four-wall per-store basis and could be an M&A target. x.comÂ
BJ's Restaurants is overvalued because poor returns on new restaurants keep it from growing, yet the market grants it a higher multiple than Microsoft and 1.5x that of many SaaS companies. The relative valuation is appalling. x.comÂ
