Founder and Managing Member of Marathon Partners Equity Management Mario Cibelli (Trades, Portfolio) increased his holding of J. Alexander’s Holdings Inc. (JAX, Financial) by 6.25% on Jan. 20, according to Real Time Picks.
Cibelli purchased 45,000 shares of J. Alexander’s Holdings, which grew his position to 765,000 shares, representing 5.2% of the company. The stock closed at $9.60 for the trading day, on a dip from near a one-year high. J. Alexander’s closed at $9.80 per share Monday, an 8.8% decline year to date and 3.92% increase over the past year.
Cibelli’s firm, Marathon Partners, relies on fundamental research to analyze stocks and holds for the long term. Marathon’s portfolio contains 27 long equity positions, valued around $202 million as of the end of the third quarter. J. Alexander is the eighth biggest holding, representing 3.6% of portfolio. Cibelli disclosed the position in the third quarter of 2015 when the price averaged $10.50 per share, and has increased the position at lower prices.
The company went public in the same quarter on Sept. 29 as a spin-off from Fidelity National Financial Inc. (FNFV, Financial) to its shareholders, like Cibelli who has held shares of Fidelity National since the first quarter of 2015.
J. Alexander’s Holdings owns three upper-scale restaurant names: J. Alexander’s, Redlands Grill and Stoney River Steakhouse and Grill, in 43 locations across 15 states. The group plans to add four to five new restaurants per year in the next several years, according to a 2015 annual report.
For the third quarter, J. Alexander’s reported a 4.3% year-over-year revenue increase to $51.46 million. Its income from continuing operations before taxes grew to $1.18 million in the third quarter from a loss of $2.44 million in the third quarter the prior year. Net income totaled $945,000 or 6 cents per diluted share, compared to a loss of $2.48 million or loss per share of 17 cents for the same periods. Restaurant operating profit margin reached 10.9% from 10.8%.
“While we are encouraged with the results of our initiatives to build guest counts and sales during the first nine months of 2016, our focus on featuring more of our value-oriented entrées impacted both revenue as well as the related flow through to restaurant operating profit,” Lonnie Stout II, president and CEO of J. Alexander’s Holdings, said in the earnings release.
“As we look ahead to the holidays, we anticipate our feature program in most markets will be returning to the more traditional entrée offerings which, coupled with what we anticipate will be continued favorable beef pricing, should help us to finish the year with solid momentum.”
J. Alexander’s Holdings lowered its revenue guidance for full-year 2016 to a range of $218 million to $220 million, from its prior guidance of $222 million to $226 million. It lowered increased the lower end of its earnings guidance in a range of $7.2 million to $7.8 million, from a prior guidance of $7 million to $7.8 million.
Cibelli owns shares of two other restaurants, Chipotle Mexican Grill (CMG, Financial) and Noodles & Co. (NDLS, Financial). His interests veer toward online media, with his top holdings, making up more than a third of the portfolio, being Shutterfly Inc. (SFLY, Financial) and GrubHub (GRUB, Financial). In the third quarter, he halved his position in Shutterfly, which he had owned for roughly eight years. Cibelli left the board of that company in May after less than a year and the installment of a new CEO. Over the past eight years, Shutterfly’s stock rose 573.1%.
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