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John Gordon

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  • 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
  • Prepare To Short AFC Enterprises [View article]
    While I understand author's logic, the business fundamentals say something else entirely: the business is getting stronger. RONA has trended better since 2009 since their plan is working.

    AFCE is one of the few restaurant standouts where many metrics are moving the right way. See my articles.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    Dec 7, 2012. 12:43 PM | Likes Like |Link to Comment
  • A Long-Term Value Case For Wendy's, Part III [View article]
    Very comprehensive review. While SOTP is interesting narrative, the real fundamental catalysts for WEN are (IMHO):

    (1) getting the WEN quality value promise reinforced in the consumers mind.
    (2) remodeling stores and store experience platforms, both company owned and franchised. The franchise economics will be the most difficult because of the CAPEX required.
    (3) getting breakfast to work.
    (4) more new product new news.
    (5) the then resulting same store sales, restaurant margins, expanded and viable franchising.
    (6) consolidating its position before weaker competitors do so.

    John A. Gordon
    Pacific Management Consulting Group
    restaurant analysis and advisory
    Oct 26, 2012. 03:01 PM | 3 Likes Like |Link to Comment
  • Analyzing Companies Is A Complex Affair: Don't Use EBITDA [View article]
    Excellent article. Financial analysis becomes flawed when all relevant revenues and costs aren't considered. Overreliance on EBITDA causes distortions.
    Oct 19, 2012. 04:32 PM | 1 Like Like |Link to Comment
  • McDonald's: Are Analysts' Q3 Estimates Too Optimistic? [View article]
    Very nice displays. However, I would recommend you examine the MCD real estate/brand component and G&A as well to pin down MCD more precisely.

    John A. Gordon
    restaurant analysis and advisory
    Pacific Management Consulting Group
    Oct 18, 2012. 09:09 AM | Likes Like |Link to Comment
  • Domino's Pizza Beats Earnings, Buy To Profit From International Growth [View article]
    Writer: understood, but $DPZ does not have low debt. While its a franchise model, its LT debt to EBITDA is app. 5X.
    Oct 17, 2012. 09:59 PM | Likes Like |Link to Comment
  • Sonic Management Discusses Q4 2012 Results - Earnings Call Transcript [View article]
    Seems to me Sonic has trouble relaying even good news, over the years, this quarter included. Whats the point in not breaking out sales comps exactly?

    Disappointing that not one question or discussion on franchisee store level economics, for a chain that is 90% franchised.

    130 bpts leverage on labor costs pretty large, wonder what is really getting cut.

    Lots of initiatives underway and company stores discussion but what about franchisees? Will they/can they use the service tool and enhance POS tools? Larry Miller's Qs on franchisee comps shortfall vs. company stores and zees use of service tools most telling.
    Oct 17, 2012. 05:56 PM | Likes Like |Link to Comment
  • Follow Einhorn In The Chipotle Short? [View article]
    In terms of his fundamental analysis, writer very clearly isn't familiar with the restaurant space and what drives sales and customer traffic long term. He way overemphasizes price, and has the relevant customer motivations mispegged.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    Oct 12, 2012. 10:50 AM | 1 Like Like |Link to Comment
  • Long-Term Investors Should Play With Dave And Buster's IPO [View article]
    Crash and burn--second time. Sometimes the info in the S-1 really is just marketing.

    Too much debt from earlier PE acquisitions and dividend taking. Third private equity failure or crash and burn (IRG) so fat this year.

    There are only so many 49K sq. foot sites in the United States in great sites that are developable for these sites. But international is a different story.

    John A. Gordon
    restaurant analysis and advisory
    Pacific Management Consulting Group
    Oct 4, 2012. 11:03 PM | Likes Like |Link to Comment
  • McDonald's Could Be Selling Coffee Beans: Should Starbucks, Dunkin' Donuts Be Scared? [View article]
    Answer: No. $SBUX and $DNKN business models are much more complex than a one single business line effect. But opening up a CPG channel for MCD is new news and could be a catalyst for nearly 100% incremental margin after startup and investor interest.
    Oct 4, 2012. 10:22 PM | Likes Like |Link to Comment
  • McDonald's Dividend Depends On How Well Its Franchisees Do [View article]
    Likewise, I agree, well written article. Not that $MCD is perfect, in all matters all the time, but it was built using the rule of three in many of its business structures: 3 components of operating income, 3 components to marketing, etc. The real estate was a way initially to attract investor funding and provide structure for franchisee agreements.

    Hard and soft costs to open a full sized unit well are over $2M, not counting debt service, franchisee G&A, and outyear CAPEX. Most franchisors leave that out of the marketing pitch, and the ROI has to have fully loaded costs to be accurate..

    MCD is publicly traded and is subject to the pressures of The Street.
    Oct 4, 2012. 10:14 PM | 1 Like Like |Link to Comment
  • Jack In The Box Overvalued Despite The Recent Hype [View article]
    Jason: thanks for the numbers and the points. I wish the Street valuation was so simple as to crank out a formula and the same price pops out.

    Same store sales, unit growth, ROIC, perceived momentum and the ever present PE ratio are the drivers to restaurant perceptions.

    John A. Gordon
    restaurant earnings and economics experts
    Oct 1, 2012. 10:19 PM | Likes Like |Link to Comment
  • Shares of Darden Restaurants (DRI +4.8%) trade higher after the company records a narrow earnings beat with its FQ2 results. Nothing was spectacular from the report, but reaffirmed guidance and a pickup in traffic late in the quarter buoyed the spirit of investors. [View news story]
    $DRI Q1: amazing favorable cost leverage, esp. labor seen in Q1; implied industry traffic100 bpts slower in Sept to date.
    Sep 21, 2012. 12:07 PM | Likes Like |Link to Comment