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John Gordon  

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  • A Fresh Cup Of Coffee? Starbucks Q1 Projections [View article]
    SBUX is a wonderful, powerful, creative consumer thought and business leader that can turn on a dime. However, i think the near term investor perception issue will be whether the mix between sales and transactions will show another narrowing of the transactions as we saw last quarter. Reports of down mall foot traffic should be watched.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    Jan 20, 2015. 12:47 PM | 2 Likes Like |Link to Comment
  • Update: Dunkin' Donuts Grows Units Faster Than Sales [View article]
    Ah, but the problem is that you can't carbon copy it everywhere. Retail, restaurants (any consumer business) have a strong geographical DNA; some things work, some don't. A franchisor can expand but the store level economics have to work. The US is a mature restaurant market, its not the wild west anymore.
    Jan 19, 2015. 10:43 AM | 1 Like Like |Link to Comment
  • Dunkin' Donuts Takes Second Dip Into China [View article]
    Doug, thanks for your piece. For the Dunkin store economics to work, the sales mix must skew towards beverages, and then fill in products like breakfast sandwiches and lunch grab and go food items. If its all about donuts, the store economics will be suboptimal. Given this, does Dunkin have a play given that SBUX and others are present?

    John A. Gordon
    Restaurant Analyst
    Jan 9, 2015. 11:47 AM | Likes Like |Link to Comment
  • Dunkin' Brands' Troubles And The Parallels To Starbucks [View article]
    Happy Holidays, all !

    Looks like the DNKN--DD US-- residual check weakness continues. Discounting is not buying traffic.
    Dec 25, 2014. 01:25 PM | Likes Like |Link to Comment
  • Is Casual Dining Dying? [View article]
    I agree with Denise. I'd add Texas Roadhouse (TXRH) to the standouts list: no breakfast, no lunch, no brunch; are buying back franchisees; incented and well compensated store partners, the heart of the system. No financial engineering, no gimmicks.

    John A. Gordon
    Pacific Management Consulting Group
    Oct 27, 2014. 12:17 PM | 3 Likes Like |Link to Comment
  • Bob Evans May Soon Be 'Delivering Farm Fresh' REIT Revenue [View article]
    Brad, I appreciate the comprehensive piece. I very much agree that BEF is very sellable. However, regarding real estate, several points that never seemingly get addressed by the pro-REIT advocates are:

    (1) what do the inevitable outyear rent step ups do to the retail or restaurant entity profitability and free cash flow going forward? No one seemingly models that out through the outyears. Isn't it merely a wealth transfer from entity one to entity two?

    The recent example of Penn National Gaming's deterioration is worth watching. Will the REIT sink it or the long term over expansion of gaming in the US?

    (2) For an older legacy brand, like BOBE, that has older properties that it needs to get out of, how would a REIT affect company contractual outyear lease payments? Would they not be stuck with outyear lease payments on dead sites? Is a site by site analysis required?

    John A. Gordon, MAFF
    chain restaurant analysis and advisory
    Sep 29, 2014. 12:09 PM | 1 Like Like |Link to Comment
  • Memo To McDonald's: Core Execution Should Be On New U.S. President's To-Do List [View article]
    Denise: as always, a very wise perspective, thank you.

    On value and $1 items, for many reasons, not the least of which is minimum wage hikes, the US (and many international markets) simply can't afford $1 items anymore. It's got to find a new platform that features price but that is not only about price.

    Getting breakfast to work 24/7 (see: JACK) and a real digital program are way overdue.

    John A. Gordon
    Pacific Management Consulting Group

    Sep 8, 2014. 11:44 AM | Likes Like |Link to Comment
  • McDonald's: The Real Estate Juggernaut [View article]
    If there is a followon discussion on MCD real estate, what might be useful is to track the rent and occupancy proceeds generated per franchise unit and the effect that produces on franchisees. In the past, MCD used rent as a "shock absorber" to help even out early term development hurdles. That does not seem to be happening in recent years. In some cases, the MCD rent overage collected above a threshold is 18% of sales. Good for franchisor corporation, bad for franchisees.

    MCD is over 80% franchised, and trending higher as we learned this week, and franchisee free cash flow matters to the good of the whole.

    Bloomberg and I collaborated on such a review in 2013, see it on my website, below.

    John A. Gordon
    Pacific Management Consulting Group

    May 29, 2014. 02:24 PM | 1 Like Like |Link to Comment
  • Red Lobster Levers [View article]
    Thanks for note--but this is what DRI has reported in its earnings calls.
    May 22, 2014. 12:22 PM | Likes Like |Link to Comment
  • Analyzing Companies Is A Complex Affair: Don't Use EBITDA [View article]
    In the CAPEX intense restaurant space, I've seen more problems using EBITDA --both investment decisions and compensation decisions for example-- than any other single measurement metric. Taxes, debt service and maintenance CAPEX and routine CAPEX have to be counted.

    John A. Gordon
    May 18, 2014. 09:20 PM | Likes Like |Link to Comment
  • Domino's Economic Castle Doesn't Mean Shares Aren't Overpriced [View article]
    Very impressive discussion template, but the comment that $50-75K in EBITDA per US franchisee is 'sustainable' is flawed. By definition, EBITDA misses debt service (principal and interest), taxes and CAPEX requirements. DPZ recently updated that to $82K in 2013, which is app. 10% of unit sales.

    National Pizza Company, the best proxy for Us Pizza Hut performance, just reported store EBITDA of 8%, partially due to rising meat and cheese costs.

    The asset light franchise model is great so long as franchisees can live off it and have enough cash flow to service their debt and remodel. This is the part of the narrative always missing.

    John A. Gordon
    May 14, 2014. 11:18 AM | Likes Like |Link to Comment
  • Activists Vs. Darden: Look Beyond The Real Estate [View article]
    ARG1, I'm a fundamentals analyst and motivated only by making the right analytical call. DRI price movements the last 10 trading days haven't moved at all, even with today's uptick.
    Apr 22, 2014. 08:40 PM | Likes Like |Link to Comment
  • Activists Vs. Darden: Look Beyond The Real Estate [View article]
    Right, understood your point and sentiment.

    Now, hope you will lay out proper long term value logic, looking beyond the real estate, including, whether a private equity solution is not appropriate for Darden itself.
    Apr 22, 2014. 12:41 PM | Likes Like |Link to Comment
  • Ignite Restaurant Group: Hidden Value In The Company's Attractive Assets [View article]
    Shaun: the Market is not so precise and does not view individual company components together well, and a revenue based multiple is a poor yardstick. That seems to be causing the large Macaroni Grill negative value.

    John A. Gordon
    chain restaurant analysis and advisory
    Apr 17, 2014. 11:00 AM | Likes Like |Link to Comment
  • Darden Restaurants Fiasco Continues As Lawsuit Is Filed And Shareholders Demand Vote [View article]
    Actually, both Darden and the Activists have not made compelling points. One must look beyond the real estate, which is the focus of the activists and imagine other equity ownership outcomes where a Red Lobster spinoff might make sense.

    The ownership scenarios proposed by Activists are not the only outcomes. Appearances are deceiving and one must take a longer view.

    Unlocking value is Wall Street speak for financial engineering. Its rarely right for the long term.

    See my article, Darden: Look Beyond the Real Estate,

    John A. Gordon
    chain restaurant analysis and advisory
    Apr 16, 2014. 12:08 PM | 1 Like Like |Link to Comment