Bo'tied: After seven years of consistent growth, Bojangles' stalls as costs rise and fast-food rivals slash prices.

• Author: Mildenberg, David

As North Carolinians have learned over the last 40 years, a Bojangles' biscuit is heavenly just out of the oven, but not as delectable a few hours later. Shares of the Charlotte-based fast-food company have shown a similar trajectory, going from scrumptious to Stale. Praised for its cultlike following in the Carolinas with ambitions to expand beyond the Southeast, the company raised $147 million in an initial public offering in May 2015. Amid lots of hype and bolstered by five years of steady growth, shares jumped more than 20% to top $23 on the first trading day.

Two and a half years later, Bojangles' trades for about $13 and faces intensified competition from 800-pound gorilla McDonald's breakfast push, and increased pressure from rising labor costs and customers looking for deals that bust profit margins. The company's shares have declined more than 40% since the IPO, compared with a 26% gain in the Standard &. Poor's 500 index.

Chief Executive Officer Clifton Rutledge says Bojangles' underestimated the impact of the discounting wave that swept the industry in late 2015 and continues today. Sales at stores open at least a year gained 4.1% in 2015 and 1.3% in 2016 and slipped 1.8% in 2017. "We're seeing 'two for $2.50' and 'two for $3' [deals] that are almost like the 99-cent days," Rutledge told analysts in November. "We just can't compete at $1.69 on a vast majority of our menu."

It's nothing the chain hasn't faced in its first four decades, the Arkansas native says in an interview at his southwest Charlotte office. "It's been tough, no doubt about it." Rutledge, 53, came to Bojangles' in 2014 after 14 years at San Antonio-based Whataburger, another beloved regional chain. "You have to be more creative and more clever and not give our food away at low prices."

Bojangles' will "get through this and get on another run for 27 straight quarters [of same-store sales gain] just like we did before" from 2010 to 2016, Rutledge says. While Bojangles' has added about 50 stores a year recently, Rutledge is slowing the pace slightly in 2018. About 60% of Bojangles' 750 restaurants are in the Carolinas, with the rest in nine other states. The company has plans to enter Indiana, Mississippi and Ohio. Almost 60%, or 430 stores, are owned by 90 franchisees.

Bojangles' has been through several owners since founders Jack Fulk and Richard Thomas opened the first store near downtown Charlotte in 1977. Five years later, they sold the business to New...