Rob Black's Retail Market Roundup For May 10

Archer-Daniels (ADM) selected Cedar Rapids, Iowa as the second location for its ethanol capacity expansion. The company will build a dry corn milling plant with an initial annual capacity of 275 million gallons adjacent to the existing corn processing plant.

Goldman initiated coverage on Hansen (HANS) with an Overweight and a $230 target.

Southwest Water (SWWC) reaffirmed 2006 guidance of net income up 10-15%.

McDonald's (MCD) released worldwide April comps of up 6.2% vs. up 2.8% last year, above expectations of 5% or better. The highlight of the April sales release was a 9.3% increase in European comps vs. down 0.7% last year, well above expectations of up about 5%, which included an approximate 3% benefit from a shift in Easter.

European results were driven by strong performance in all 3 major markets (France, Germany, and the U.K.) with all 3 enjoying comp increases of about 9%. The U.K., which has been a soft spot in Europe, was sparked by the return of the monopoly game running from Mar. 15 through Apr. 25. Premium beef and chicken sandwiches helped drive results in France and Germany.

Federated Department Stores (FD) lost $52 million in the first quarter, weighed down by hefty integration costs of May Department Stores. A year ago, the parent of Bloomingdale's and Macy's stores made $123 million. Total sales climbed 63% to $5.93 billion from $3.64 billion a year ago.

A.G Edwards upgrades Cheesecake Factory (CAKE) to Buy with a $40 target. The firm is saying recent same store sales weakness could persist in the near term but long-term growth story is still intact.

Thomas Weisel upgrades Petsmart (PETM) to Outperform. The firm is saying proprietary P.O.S data suggests category sales remain strong; potential near-term catalysts leave room for upside.