Seeking Alpha
View as an RSS Feed

John Gordon  

View John Gordon's Comments BY TICKER:

Latest  |  Highest rated
  • Jack In The Box: No Growth Catalysts And Unjustifiable Valuation [View article]
    One important note regarding $JACK is what is the new Qdoba thesis, given the closure of 67 company units last week. The market initially viewed it as mild good news, as the closure would eventually be accretive to earnings as all 67 stores were cash flow negative. But the other side of the story is: how did the Qdoba brand get so far off track so early? Its a signal that the burrito space finally may be overdone.

    John A. Gordon
    chain restaurant analysis and advisory
    Jun 27, 2013. 09:58 AM | 1 Like Like |Link to Comment
  • Texas Roadhouse: Best Name In The Restaurant Industry, 100% Upside Potential [View article]
    TXRH has been on my earnings fundamentals standouts list the last several quarters. See my SA articles,

    My opinion is much has to do with their less than national penetration status (therefore runway for growth) and that steak centric operators have done well for some time.

    John A. Gordon
    Jun 20, 2013. 11:39 AM | Likes Like |Link to Comment
  • Cosi: Meet The Poor Man's Panera [View article]
    InstlResAnlayst: actually, Au Bon Pain was the predecessor concept entity for Ron Saich and company, who later acquired St. Louis Bread and founded Panera. French name but not original operations.
    Jun 4, 2013. 02:57 PM | Likes Like |Link to Comment
  • Cosi: Meet The Poor Man's Panera [View article]
    Nice job of recapping restaurant history.

    Much changed in the restaurant space from 1991 to 2003. US Restaurant density exploded.No surpise that PNRA would have an earlier movers advantage in getting sites and concept development.

    COSI got the locations that it could in the difficult 00s. Driving any of its major markets, as I did again in May while in Chicago, reveals the store location mix is the structural problem. Too many unbalanced locations. Until that problem, and the money for unit migration becomes available, we'll be talking suboptimal COSI results. But as to valuation, my opinion the company is worth a free cash flow multiple that it produces.

    John A. Gordon
    Pacific Management Consulting Group
    Jun 4, 2013. 11:33 AM | Likes Like |Link to Comment
  • Carhops, Coneys, And Healthcare: Why I'm Short Sonic Drive-Ins, Part II [View article] SONC, its about the lower store margins but also the resulting declining US franchisee store count base.

    Thanks for the color above.

    John A. Gordon
    chain restaurant analysis and advisory
    May 6, 2013. 01:43 PM | Likes Like |Link to Comment
  • Fast Food Chains Left With Multiple Hurdles [View article]
    Adam, I know you are a self described political and economical conservative, but I urge you to look at the big picture what drives restaurant stock growth. In the long term it's same store sales growth, number of units in operation, ROIC and operating margin. In the short term it's same store sales trends.

    Price is not everything and only part of the sales mix. In fact, low margined items generally depress profitability.

    We are pasing by the so called comps cliff caused by the 2012 better weather blip and last week's upgrades were telling. I'd note that each of the group of concerns you noted above apply to all restaurants, not just the QSR subset.

    John A. Gordon
    restaurant earnings and economics expert
    Apr 7, 2013. 10:11 PM | 1 Like Like |Link to Comment
  • McDonald's, I'm Not Lovin' Its Zero U.S. Sales Growth [View article]
    Interesting $MCD comments from BigMac 99, above.

    In response to Markos, your narrative highlights exactly why it is unfortunate that Mr. Market overvalues the same store sales metric. That is, the market moves in variance to fundamentals. Analysis of any retail sector investment, especially restaurants, requires much more than reading the same store sales weatherwave.

    John A. Gordon
    restaurant anlysis and advisory
    Mar 27, 2013. 06:55 PM | 1 Like Like |Link to Comment
  • Biglari Holdings, Inc: Sardar Biglari - Bet The Jockey Part VII [View article]
    Dana: CEO workship cults don't have a very long time working in this a service business, it is the staff that delivers the value, not the CEO.

    Moving on...seems like you are saying that because of the CBRL consolidation accounting, the $BH holdings have a "more reasonable valuation", even though they have no control of those earnings except via dividends or stockownership rights.

    I'd recommend you keep the earnings metrics clean and simple, and not muddy the waters.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    Mar 18, 2013. 12:47 PM | 2 Likes Like |Link to Comment
  • Dunkin' Donuts: Are All The Analysts In Florida? [View article]
    Stephen: interesting point, but the JPM sell side analyst that hosted the DNKN love fest IS actually based in Florida, Miami actually !

    Otherwise, the fairly strong same store sales numbers that a weaker competitor, Krispy Kreme (KKD) and the positive US same store sales results released by Starbucks (SBUX) and Tim Horton's (THI) does seem, to support the case that lower average ticket 'beverage' concepts seem to be "hot", if there is average ticket upside via food attachment and new product new news.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    Mar 17, 2013. 11:11 PM | Likes Like |Link to Comment
  • Chipotle Mexican Grill: The High Multiples Are Justified [View article]
    Alex: a few points:

    (1) CMG is NOT getting a 70% return on each restaurant. The data table you included excludes CAPEX and G&A which brings down enterprise returns lower. Not your fault, but retail and restaurant companies make that same per store display error endlessly. Investors have to know that.
    (2) No forward lineal extrapolation model can possibly be accurate. In the restro space, market conditions, incomes, restaurant development and tastes and preferences change greatly. In my long restaurant analytical career, these lineal models never work out.
    (3) The 1.61 elasticity is a bit high, never seen it that high. Maybe 1.15.
    (4) When viewed over history, restaurant lifecycles are finite. Management capability to prolong the lifecycle can't be knowable at this point.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory

    Mar 17, 2013. 11:00 PM | 3 Likes Like |Link to Comment
  • Why I Will Swap These 2 Franchises [View article]
    Points understood, but $MCD operational peers are really only $BKW, $WEN and and $YUM.
    Feb 12, 2013. 11:30 AM | 1 Like Like |Link to Comment
  • Should Denny's Adopt Marcato Capital's Plan For DineEquity? [View article]
    I'm certainly dividend friendly, but ultimately the leverage ratio must relate to the long term fundamentals of the free cash flow going forward. Will the debt markets accept 5-5.5X for Denny's?

    It is a mistake to assume that restaurant franchisor model free cash flow continues forever. The most important factor in that is franchisee cash flow and ability to gain credit. Does Denny's need to do anything to support franchisee future growth that could come out of free casdh flow? A: Yes....a dedicated loan pool for franchisee store reimages and remodels.

    John A. Gordon, CFFA
    Pacific Management Consulting Group
    restaurant analysis and advisory
    Jan 28, 2013. 11:14 AM | 1 Like Like |Link to Comment
  • Revisiting Darden Restaurants: A Look Inside Its Lousy Quarter [View article]
    In the last earnings call, DRI signaled that it will be looking at its dividend level. It has to. It has a cash squeeze underway right now: profit declines, increasing CAPEX and debt service for new acquisitions. Let's watch this.

    John A Gordon CFFA
    Jan 14, 2013. 08:09 AM | Likes Like |Link to Comment
  • McDonald's Has A Cultural Clash And May Soon Get Help In Solving It [View article]
    Interesting observations, but the beverage business and the breakfast/lunch/dinner business are inseparable. MCD has a same store sales problem and no doubt operations issues, but standalone McCafe's with no other products are economically and from a customer retail proposition unworkable.

    John A. Gordon, CFFA
    chain restaurant analysi and advisory
    Jan 10, 2013. 10:23 PM | 1 Like Like |Link to Comment
  • Wendy's Continues To Execute Well [View article]
    I hope for the best for WEN. It has potential. But its operational execution couldn't have improved that quickly. Fundamentals improvements means same store sales gains, margin improvement, robust new product new news, new unit development, improving ROIC and company and franchisees together. That is not the case right now with WEN.

    Article should have addressed same store sales trends, the forecast EBITDA trend movement and how WEN will come up with big CAPEX funds for itself and franchisees to remodel to its future vision.

    John A. Gordon
    Pacific Management Consulting Group
    restaurant analysis and advisory
    Dec 26, 2012. 12:56 PM | Likes Like |Link to Comment