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Bojangles’, Inc.: Initiation of Research Coverage

Wednesday, June 3, 2015

William Blair & Company initiated research coverage of Bojangles’, Inc. (BOJA $27.52) with an Outperform rating and Aggressive Growth company profile. Bojangles’ is a quick-service concept concentrated in the southeastern United States that is well known for its famous chicken n’ biscuits and breakfast served all day, with the majority of entrees priced between $5 and $7.

Analyst Sharon Zackfia estimated that Bojangles’ would earn $0.67 per share in 2015 and $0.76 in 2016.

“With a menu centered on its freshly prepared chicken n’ biscuits, Bojangles’ has garnered a loyal, cult-like following across the Southeast, as evidenced by healthy average unit volumes of nearly $1.8 million and positive same-store sales for 20 consecutive quarters,” Zackfia said. “The company’s strong breakfast business accounts for 38% of sales, and as a result, Bojangles’ generates more pre-11 a.m. revenues per restaurant than any other publicly traded concept.”

She added, “Bojangles’ has increased revenue and EBITDA at a 13% and 15% CAGR, respectively, over the past three years. We expect 7% to 8% unit growth and low-single-digit same-store sales gains to generate low-double-digit revenue growth annually, with modest margin expansion yielding operating income growth of 10% to 12% as the company leverages fixed costs.”

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