Bojangles, Inc. (BOJA), a national restaurant franchise company yesterday reported their fiscal fourth quarter and full year 2016 financial results. Bojangles reported fourth quarter adjusted earnings of $0.28 per share which beat analyst expectations of $0.21 per share. Bojangles reported fourth quarter revenues of $139.4 million which fell short of analyst expectations of $140.4 million.  

Bojangles, Inc. President’s Comments

“We are pleased the Bojangles’® system has now achieved 27 consecutive quarters of comparable restaurant sales growth through the fourth fiscal quarter of 2016 and that Adjusted Diluted Net Income per Share growth for fiscal year 2016 exceeded our annual guidance despite widespread softness affecting the limited service restaurant category,” said Bojangles’ President and CEO Clifton Rutledge.

“Ahead of Bojangles’ 40th anniversary celebration in July, we are as focused as ever on executing our strategic plans and building the brand in a measured and sustainable way.  We will continue developing restaurants in core and adjacent markets through our company-operated and franchised model, with our long-term goal of franchising leading our expansion efforts over time.  We are striving to offer the best dining experience possible through exceptional service, menu innovation, and compelling limited time offers that solidify our reputation for unique, great tasting, freshly-made food, at an exceptional value.  Together with our franchisees, we are also exploring technology solutions such as mobile payment, apps and loyalty programs that will elevate our customer interactions,” he added.

“Our first ‘Bojangles’ of the Future’ restaurant in Greenville, South Carolina is getting rave reviews and it will be followed by the opening of a second location in Charlotte, North Carolina later this year.  We expect this exciting new restaurant prototype to set the standard for Bojangles’ restaurants as we continue testing the various elements of this new design.  Although we recognize and are addressing near-term headwinds affecting our business, we have also never been more energized about the future of this Company,” he concluded.  Globe Newswire

BOJA Technical Analysis

(Click on image to enlarge)

BOJA opened trading yesterday at $20.20 which was up from the previous day’s trading close of $20.15. Shares closed trading yesterday at $19.75 and spiked down after market to $18.80, equivalent to a 5% decrease from the closing price. Taking a look at the daily chart we can see that the last time BOJA traded below these levels we have to go all the way back to January 3rd, when it traded at $18.65.

Taking a closer look at the daily chart we can see that before the spike down BOJA had already been in an overall downward trend dating back to February 21st,  when it traded at $21.55. BOJA has a float of 17.41 million shares and traded 2.00 times the normal daily trading volume on Tuesday.

For trading purposes, I would like to see BOJA open trading on Wednesday below $19.10 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.15 from my entry position fearing anything more than that and the stock would start to fill in the gap down.