Dec. 31, 2014, 11:33 AM
- Consumer spending: More consumers say they are willing to trade-up to a traditional dining spot from fast-casual than trade-down to a fast-food option, according to Technomic. The revelation takes some of the steam away from the argument that lower gas prices will boost traffic at major fast-food chains.
- IPOs: Profitable 2014 launches by Zoes Kitchen (ZOES -0.2%) and Habit Burger (HABT -0.5%) could inspire other private chains to go public. Shake Stack (Pending:SHAK) got an early jump by filing this week for an IPO.
- Labor costs: Analysts see a risk to profitability in the sector from the wave of minimum wage laws set to go into effect over the next year. Some analysts think President Obama will push for federal legislation with the issue hard for election-minded Republicans to oppose strongly.
- Fast-casual pizza: A breakout of a fast-casual pizza concept is widely expected in 2015 (candidates).
- Chipotle: Another +30% run for the Mexican chain off of sizzling comps leaves it with limited upside, according to some analysts. Chipotle (CMG +0.8%) execs don't agree, noting during the Q3 earnings call (transcript) that enormous upside exists to maximize peak transactions per hour (350-400). Beef, cheese, and avocado pricing will be key for CMG next year as well.
- Restaurant stocks: CAKE, CBRL, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, BDL, NATH, LUB, QSR, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
Dec. 26, 2014, 6:59 AM
- Starting in January, McDonald's (NYSE:MCD) customers in Japan will be able to order french fries in all sizes again, after the fast-food chain limited sales to small servings because of import delays.
- Fry rationing and a meat supplier scandal has given McDonald's Japan a tough year.
- The company in October forecast its first annual loss in 11 years, and reported that sales at outlets opened at least a year fell 12% in November, down for the 10th month in a row.
Dec. 24, 2014, 9:57 AM
- The restaurant industry will run up against soft comps in January and February due to last year's winter storms which were much worse than normal.
- Restaurant same-store sales will rise just over 2% for the full year, according to an estimate from the co-founder of the NRN-MillerPulse tracking survey.
- Technomic sees a 3% growth in restaurant comps in 2015, while Fitch Ratings has an outlook for 2% to 3%.
- On the cost side, commodity prices for chicken, cheese, wheat, and pork are all expected to moderate. However, beef prices are seen increasing 4% to 8%.
- Minimum wage increases in many state kick in on January 1 which could impact the bottom line for many chains.
- Fresh IPOs, concept acquisitions, and leveraged buyouts care expected to be major themes in 2015, according to analysts.
- CEOs on the hot seat include Don Thompson at McDonald's (NYSE:MCD) and Nigel Travis at Dunkin' Brands (NASDAQ:DNKN).
- Restaurant stocks: CAKE, CBRL, CMG, DPZ, DRI, EAT, JACK, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, HABT, NDLS, PLKI, LOCO, YUM, KKD, BOBE, TAST, GTIM, FRSH, COSI, FRS, PBPB, FRGI, QSR.
Dec. 24, 2014, 3:15 AM
- Minimum wage increases across the U.S. will prompt Wal-Mart (NYSE:WMT) to adjust base salaries at 1,434 stores, impacting about a third of its U.S. locations, as minimum wage hikes hit 21 states on or around Jan. 1.
- Wal-Mart and other employers, such as Target (NYSE:TGT) and McDonalds (NYSE:MCD), make these adjustments each year, but growing attention to the issue has expanded the scope of the change. Thirteen U.S. states lifted the minimum wage in 2014, up from 10 in 2013 and 8 in 2012.
Dec. 16, 2014, 11:23 AM
- Shares of McDonald's (NYSE:MCD) spike higher with rumors circling around indicating an activist investor is going to step in to pressure management for changes.
- This time around the speculation focuses on Bill Ackman as being the new McDonald's gadfly.
- Last week, McDonald's laid out its version of a strategic plan to grow earnings.
- MCDS +1.9% on a big jump in volume.
Dec. 10, 2014, 11:29 AM
- McDonald's (NYSE:MCD) execs were on the hot seat at an investor meeting after a string of disappointing global sales reports.
- CEO Don Thompson promises "comprehensive" changes after acknowledging some failures with the Dollar Menu and menu overload.
- Top priorities for the chain will be winning the burger war and becoming a favored family destination once again by tying into community events.
- The disparity between premium pricing and the lower pricing points is seen as a weakness which needs to be fixed.
- Store execution will be improved by "re-inventing" its training regiment and reallocating labor.
- McDonald's will introduce a new slimmed-down menu shortly that it says will help improve speed of service in stores and for drive-through customers.
- McDonald's Investor Discussion webcast (live)
Dec. 9, 2014, 1:32 PM
- McDonald's (MCD -1%) will broaden the Create Your Taste initiative to 2K U.S. stores (14.3% of total) in an effort to recharge its brand.
- Customers use a touchscreen kiosk to customize their orders and are delivered food at their table.
- Conspiracy theory: The company has denied speculation that it aims to use kiosks and robots to lower labor costs.
- What to watch: Though the strategy puts the restaurant chain closer to the build-your-own concepts at some fast-casual stars such as Chipotle, kitchen execution and speed of service could be challenges, warn industry insiders.
- Previously: Weak global comps for McDonald's across major segments (Dec. 8, 2014)
Dec. 8, 2014, 8:37 AM
- McDonald's (NYSE:MCD) warns on Q4 results after November sales come in weak.
- The company sees "significant pressure" on company-owned and franchised margins.
- A previously-disclosed supplier issue in China is expected to be a $0.07-$0.10 drag.
- McDonald's also forecasts a $0.07-$0.09 hit from foreign currency translations to the strong U.S. dollar.
- Previously: Weak global comps for McDonald's across major segments
- MCD -2.88% to $93.54.
Dec. 8, 2014, 8:12 AM
- McDonald's (NYSE:MCD) reports global comparable-store sales fell 2.2% vs. -1.7% expected by analysts.
- Comparable-store sales fell 4.6% in the U.S.
- The Europe comp was down 2.0% and APMEA slid 4.0%.
- Decent sales in Canada and "other countries" helped pull up the overall global comp.
- McDonald's says it will simplify its menu in the U.S. and move toward a "locally-driven" organizational structure (Previously: Giant menu no small problem for McDonald's).
- What to watch: There's a growing sense from restaurant sector analysts that CEO Don Thompson may be on a short string with the company's board due to the sputtering sales growth track of the company.
- MCD -2.5% premarket to $93.88.
Dec. 3, 2014, 2:41 PM
- Menu bloat is still a problem at McDonald's (MCD +0.3%) despite some promises from the company about streamlining the menu, notes the WSJ.
- The kitchen at the chain now has to account for 121 different order options which pressure restaurants to process orders in 90 seconds or less.
- Last year, QSR Magazine clocked the average speed of service at McDonald's at a 15-year high and double the company's own goal.
Dec. 2, 2014, 8:56 PM
- Though federal legislation on a minimum wage increase is stalled in Congress, there's still movement on the hourly payment front.
- Organized protests at Wal-Mart stores on Black Friday were more widespread than in recent years.
- The city council of Chicago approved a gradual increase of the minimum wage in the city to $13 per hour by 2019.
- The pay hike in the Windy City follows similar measures in Seattle, San Francisco, and Oakland.
- Earlier this week, a state senator is California introduced legislation to boost the minimum wage in the state to $13 per hour by 2017.
- Related stocks: MCD, WMT, BKW, WEN, YUM, TGT.
Dec. 1, 2014, 3:30 PM
- The National Restaurant Association's Restaurant Performance Index gained 1.8% M/M in October to 102.8.
- The poll of restaurant operators indicated 55% saw improved traffic trends in October.
- Once again, food commodity expenses and rising labor costs are viewed as potential drags.
- The positive read on the sector came before the November slide of gas prices which is viewed as a potential driver for restaurant traffic and spending.
- Restaurants stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
Nov. 29, 2014, 10:29 AM
- Analysts with Gasbuddy.com predict some gas stations in the U.S. will offer $2 per gallon gas by Christmas.
- The last time the average price of gas in the U.S. was below $2 was in March of 2009.
- Forecasts from economists vary widely on the overall gas benefit to consumers for Q4. The high end from the group is an outlook of $300 per household, while the low end is closer to $100.
- Most analysts see an immediate lift for retail chains with large distribution channels. Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Costco (NASDAQ:COST), Dollar General (NYSE:DG), Family Dollar (NYSE:FDO), Dollar Tree (NASDAQ:DLTR), Big Lots (NYSE:BIG), and Five Below (NASDAQ:FIVE) come to mind.
- Airline stocks (JBLU, DAL, UAL, LUV, AAL, RJET, ALK, HA, ALGT, VA) have already ripped strong gains off the OPEC news, although some see even more long-term upside as forward fuel hedges get reworked.
- A sustained period of low gas prices should lift restaurant stocks (CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN) say some analysts.
- The gaming sector is (CZR, PNK, BYD, ISLE, CNTY, MCRI, MGM, NYNY) also an off-the-radar pick to bounce.
Nov. 25, 2014, 2:10 AM
- The FDA will publish sweeping new rules today requiring chain restaurants, movie theaters and large vending machine operators across the country to post calorie counts on their menus and menu boards.
- "Obesity is a national epidemic that affects millions of Americans," says FDA Commissioner Margaret Hamburg.
- The new rules also require other nutritional information - including calories from fat, cholesterol, sugars and protein - to be made available in writing upon request.
- Related tickers: BJRI,BWLD,BKW,CMG,DENN,DPZ,KKD,MCD,PFCB,PZZA,CAKE,WEN,PNRA
Nov. 20, 2014, 10:45 AM
- The usual suspects topped a list of the businesses with the most foot traffic in October, compiled by location analytics firm Placed.
- The top five chains were Wal-Mart (NYSE:WMT), McDonald's (NYSE:MCD), Subway, Starbucks (NASDAQ:SBUX), and Walgreens (NYSE:WAG).
- Significant movers over the last month include KMart (NASDAQ:SHLD) +9 spots, KFC (NYSE:YUM) +6 spots, Bed Bath & Beyond (NASDAQ:BBBY) -7 spots, and Costco (NASDAQ:COST) -6 spots.
Nov. 18, 2014, 3:24 PM
- The NPD Group reports restaurant traffic was flat in Q3.
- Spending was up 3% during the quarter as average tickets were up across segments.
- Traffic growth by category: Fast-casual +8%, Coffee/donut/bagel +5%, Mexican quick service +5%, hamburger quick service -3%, sandwich concepts -1%, Asian quick service -1%.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
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