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John Gordon

 
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  • P.F. Chang's On The Rebound [View article]
    Jim, thanks for this article that displays the technical variables and viewpoints.

    As I'm a fundamantal buy side focused restaurant analyst, and look at fundamentals, my perspecive is different. For a number of reasons, PFCB has lost momenmtum the last 2-3 years. The quick casual Pei Wei chain has sluggishly developed, missing opportunities.

    The Bistro of the future test unit has just opened in Southern CA in December and some considerable time will be required to learn and effect feedback.. We see no fundamental drivers in the near term that would warrant anything beyond opportunistic balancing until a breakthrough event occurs. In addition to the Bistro, we;d look to see a logical ouyyears Pei Wei expansion template and energy, which we do not see now.

    John A. Gordon
    chain restaurant analysis and advisory
    http://bit.ly/sYPvCa
    Dec 28 03:50 AM | Likes Like |Link to Comment
  • Sonic's CEO Discusses Q4 2011 Results - Earnings Call Transcript [View article]
    Difficult Sonic ($SONC) earnings calls continue. This call could have been handled much better. Often, the longer the response, the less said and more conusion results.

    SONC likely is struggling supporting and promoting the 5 dayparts it covers with its ad fund budget. But instead, the false comparison to other competitors supporting just lunch/dinner was made. Every major QSR burger competitor must cover multiple dayparts.

    It was odd that the commodity basket inflation was not revealed. Inflation is a major current issue in the restaurant space and actually a good explanation for declining margins, but SONC didnt go there. Same with the OPEX uptick (deferred maintenance finally coming due).

    We have long advocated for more franchisee data disclosure. Franchisee conditions are certainly key to this situation, particularly since the franchisee unit base is much larger now after SONC's significant refranchising in 2008-2010

    John A. Gordon
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9
    Oct 19 02:27 PM | Likes Like |Link to Comment
  • Panera Bread: A Restaurant For The Recession [View article]
    Nice article....but a bit off in the peer group comparison. PNRA's peer is not THI. Tim Horton's is a donut shop, with only very regional US penetration, and is a peer of DNKN and Krispy Kreme.

    PNRA does not have an national scope competitor other than the much smaller Corner Bakery, which is PE owned and beginning to ramp up. Interestingly, the Corner Bakery AUVs are said to be higher than that of PNRA, so perhaps they have some good locations.

    That said, the quick casual set has grown share (both sales, units and AUV growth), with both PNRA and CMG leading the way.

    John A. Gordon
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9
    Oct 18 12:11 AM | Likes Like |Link to Comment
  • Krispy Kreme: Turnaround That's Making Shareholder Profits [View article]
    $KKD--a long term turnaround playing out; several interesting fundamentals notes when you dig:

    (1) Company US SSS plus 2.5%, franchisees plus 6.3% but international minus 11.7%. Company doesn't have franchisee transaction data. In the US, "on premise" segment price component was positive 14%, traffic 11% negative.

    (2) company stores posted an $1M Q2 EBITDA loss, but $1.1M for first half. Most of company margin and earnings dollars comes from supply chain.
    Aug 30 11:31 AM | Likes Like |Link to Comment
  • Carrols Restaurant Group CEO Discusses Q2 2011 Results - Earnings Call Transcript [View article]
    Note Burger King SSS still down, 3.7% for quarter, 6 month BK segment EBITDA (includes G&A) at only 3.7%. Pollo Tropical had almost 6 times higher segement EBITDA, at 18.7%.
    Aug 9 09:54 PM | Likes Like |Link to Comment
  • Restaurant Review: What's Cooking and What's Not [View article]
    Two thoughts come to mind upon conclusion of this piece:

    (1) focus on the forwardlooking fundamentals, not the fluff.
    (2) prior performnce does not guarantee future results.

    John A Gordon
    chain restaurant earnings and economics experts
    pacificmanagementconsu...
    Aug 1 12:34 PM | 1 Like Like |Link to Comment
  • Kona Grill: The Next Restaurant Superstar? [View article]
    With all due respect to Mike, and to the author, who of course, is LONG, the 20 unit Kona has a long way and crowded field to traverse before it gets to superstar status.

    John A. Gordon
    restaurant analysis and advisory
    pacificmanagementconsu...
    Jul 19 05:56 PM | Likes Like |Link to Comment
  • Darden Restaurants' CEO Discusses Q3 2011 Results - Earnings Call Transcript [View article]
    June 28 2011, Darden (seekingalpha.com/symbo...) Q4 update: currently Darden is featuring Carbonara Ravioli ($10.95) and same with shrimp ($12.95), and has associated TV spot, but all I see on television is $6.99 unlimited soup, salad and breadsticks. Ad agency just burning off spare GRPs or a real media strategy thrust?

    John A. Gordon
    chain restaurant earnings and economics experts
    www.pacificmanagementc...//
    Jun 28 02:53 PM | Likes Like |Link to Comment
  • Jack in the Box's CEO Discusses Q2 2011 Results - Earnings Call Transcript [View article]
    Several interesting notes we heard from JACK's Q2 Earnings Call:

    (1) the Jack in the Box negative same store sales run has been effectively snapped, having been positive now in both Q1 and Q2. JACK (and other California centric QSR operators) were skewed by the CA/SW US slump but now recovering.

    (2) JACK remained true to its strategy of remodeling, improving core products and bundled/new meals platforms, with the $4.99 All American Jack the major media Q2 feature. Contrast this to the generally poor results of the $1 TV burger operator results. (BKC)

    (3) JACK has gotten only modest franchise margin leverage this far: with another 700 franchised stores, it's total EBITDA $ per franchisee was about $95,882 per store in 2010, versus $90,909 in 2006. Its getting about a 5% royalty and a 3.5% rent spread.

    (4) analysts were fully consumed tracking how JACK's AUVs and margins were changing on a real basis versus as a store operated mix basis, with more Qdoba and more franchisees. There were no questions on franchisees.


    John A. Gordon
    chain restaurant earnings and economics experts
    pacificmanagementconsu...
    May 23 06:16 PM | Likes Like |Link to Comment
  • Wendy's: Where's the Beef? [View article]
    My opinion is writer is far too pessimistic about Wendy's fundamentals. No doubt, Arby's will go down as one of the greatest restaurant collapses in history, but that is being dealt with via the disposition.

    Wendy's has done a great job in restarting and redefining menu development since 2008, and with its $1.4M AUV base (higher than Burger King who operates three dayparts), and second highest among the three major QSR opertators (MCD, WEN, BKC), it has a great platform to build upon.

    Wendy's is way late with breakfast, but it looks to be a significant potential runway for growth. But it will take time.

    We'll have a Wendy's note on SA in next day or so.


    John A. Gordon
    chain restaurant earnings and economics experts
    www.pacificmanagementc.../
    May 11 11:13 AM | Likes Like |Link to Comment
  • Ranking the Restaurant Stocks [View article]
    Nice article and rundown, thank you. We opine really the most important restaurant fundamental (versus investment community view) economic metric is strength of the store level economic model, after CAPEX.

    Same store sales is but a proxy for restaurant flowthrough, and profit flowthrough rate is not guaranteed.

    We like Stern Stewarts EVA metric and hope someday earnings are so stated, but we'll take free cash flow for now.


    John A. Gordon
    chain restaurant earnings and economics experts
    pacificmanagementconsu...
    May 5 10:35 PM | Likes Like |Link to Comment
  • McDonald's' CEO Discusses Q1 2011 Results - Earnings Call Transcript [View article]
    We are very glad Larry Miller from RBC asked about MCOpCo (company store) and franchisee margins, because otherwise there was little discussion and no direct questions on the comp sales breakout between traffic, check and price (implied at 1% in US.)

    Don Thompson mentioned customer counts have grown in recent years, and the Q1 newsrelease mentioned comparable sales and traffic together in the same sentence, so...traffic must have been up and check down.

    Interestingly, the two other burger (seekingalpha.com/symbo...) QSR majors that reported in April (Burger King and Carl's/Hardees) both had negative traffic and positive check, just the inverse of MCD.


    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant earnings and economics experts
    www.pacificmanagementc...
    Apr 25 10:06 PM | Likes Like |Link to Comment
  • Why Chipotle Could Eventually Choke on Valuation [View article]
    Nice article, but I'd speculate instead that Chipotle's (CMG) success and current valuation support will be driven by current fundamentals, such as:

    (1) number of new units that can be found in existing and new US markets, either the basic unit site or the lower cost, efficient type a site, designed for infills or conversions.

    (2) whether CMG has enough of its elite restauranteurs and other store management ready to open new units

    (3) macroeconomic factors, such as employment, income, disposable income, gasoline.

    (4) store level economics: covering commodity costs.


    John A. Gordon
    chain restaurant earnings and economics experts
    pacificmanagementconsu...
    Apr 20 01:03 PM | Likes Like |Link to Comment
  • Ruby Tuesday's CEO Discusses Q3 2011 Results - Earnings Call Transcript [View article]
    Ruby Tuesday (RT) certainly is a beehive of activity. More than the weather and earnings miss story, that Ruby is working defranchsing to the magnitude of 73 units was notable to us.

    The RT 10Q hasnt been posted yet, but seems total debt increased by $128M, so we dont know the multiple yet. Sandy noted some franchisees with high debt were acquired.

    RTs detail of some midwestern and southern market sales softness does track similar to the 2007/2008 declines excluding the sand state problems (CA, AZ, FL, NV) which were weakening for some time.

    John A. Gordon
    Pacific Management Consulting Group

    chain restaurant earnings and economics experts
    pacificmanagementconsu...
    Apr 7 11:54 AM | Likes Like |Link to Comment
  • Darden Restaurants' CEO Discusses Q3 2011 Results - Earnings Call Transcript [View article]
    The Darden (DRI) earnings calls are always interesting.

    Looks like the company's strategy of prereleasing estimated Q3 same store sales and earnings on January 31 was successful in that it created a secondary story and blunted the inevitable Olive Garden/Red Lobster story.

    While both Olive Garden and Red Lobster posted negative traffic (weather), Red Lobster outperformed both Mitchell's (RUTH, SSS -2.1%), and McCormick and Schmick's (MSSR, SSS minus 1%).

    DRI has extracted well this year, with sales being up $260M and EBIT up $75M, for first three quarters, for a corporate EBIT flow through of 29%.


    John A. Gordon
    Pacific Management Consulting Group

    Chain Restaurant Earnings and Economics Experts
    pacificmanagementconsu...
    Mar 28 12:56 PM | 2 Likes Like |Link to Comment
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174 Comments
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