Fri, May 1, 4:17 PM
Fri, May 1, 9:47 AM
- Yum Brands (YUM +5%) moves higher in early trading after Third Point discloses a new position in the restaurant holding company its Q1 letter.
- The "significant" stake in Yum from Third Point is based on its forecast for a dramatic turn in profits.
- Previously: UBS stays positive on Yum Brands (May. 01 2015)
Fri, May 1, 6:55 AM| Fri, May 1, 6:55 AM | Comment!
Tue, Apr. 21, 5:37 PM
Tue, Apr. 21, 4:24 PM
- Yum Brands (NYSE:YUM) trades higher after beating estimates for Q1 profit.
- China: Sales were off 6% with 8% unit growth outrun by a -12% same-store sales comp vs -14% expected. Restaurant margin -450 bps to 18.9% off of sales deleverage.
- KFC: Sales growth of 8% derived from 2% unit growth and 5% same-store sales growth. Operating margin i+180 bps to 26.3%.
- Pizza Hut: Revenue rose sales 2% led by 2% unit growth. Same-store sales came in flat. Operating margin -150 bps to 30.0%.
- Taco Bell: Sales up 9% on 3% unit growth and a 6% comp. Operating margin +520 bps to 26.6%.
- India: Sales increased 1%. Unit growth +18% offset by an 11% same-store sales decline.
- 294 stores were added to Yum' system during the quarter.
- Previously: YUM! Brands beats by $0.08, revenue in-line
- YUM +4.64% after hours.
Tue, Apr. 21, 4:13 PM
Tue, Apr. 21, 1:53 PM
- KFC (NYSE:YUM) is looking to become the lower-cost premium coffee alternative to Starbucks in China with a broad roll-out this year.
- The company anticipates all 2.5K outlets will offer premium coffee by the end of the year.
- Reports indicate KFC's premium coffee will cost about half of what Starbucks sells for and about 10% below the pricing from McDonald's.
- KFC is the largest fast-food chain in China.
Mon, Apr. 20, 5:35 PM
Wed, Apr. 15, 11:00 AM
- Cowen Research initiates coverage on 8 different restaurant stocks.
- Starbucks (SBUX -0.1%) and Chipotle (CMG +0.7%) land Outperform ratings.
- Also of note, the high-flying pair ranked first and second in a Piper Jaffray poll of top restaurants brands with upper-income and average-income teenagers.
- Buffalo Wild Wings (BWLD +0.6%) was the third stock set at Outperform by Cowen.
- Habit Restaurants (HABT -1.8%), McDonald's (MCD -0.3%), Restaurants Brands Group (QSR +0.2%), Panera Bread (PNRA +0.7%), and Yum Brands (YUM +0.8%) were given a rating of Market Perform by the investment firm.
- None of the restaurant stocks listed above trade with a forward P-E ratio below 20.
Thu, Apr. 2, 10:08 AM
- The wage increases announced by McDonald's (MCD -0.4%) will account for about a 1% earnings headwind in 2016, according to an estimate from Credit Suisse.
- The company only runs about 10% of its U.S. stores and the initiative doesn't impact stores in global markets.
- Fast-food chains with a high concentration of company-owned stores in the U.S. could feel some pressure to match the wage policy of McDonald's, notes CS.
- To varying degrees, those chains could include Sonic (NASDAQ:SONC), Jack in the Box (NASDAQ:JACK), Wendy's (NASDAQ:WEN), Denny's (NASDAQ:DENN), Popeyes Louisiana Kitchen (NASDAQ:PLKI), Taco Bell (NYSE:YUM), and Burger King (NYSE:QSR).
- Previously: McDonald's raises wages in U.S. (Apr. 01 2015)
Wed, Mar. 25, 4:33 PM
Wed, Mar. 25, 12:58 PM
- Taco Bell (NYSE:YUM) is adding a chicken biscuit taco to its breakfast menu and will cut the waffle taco.
- One thing that is still consistent at Taco Bell are commercials which takes dead aim at McDonald's.
- Despite some broad market share losses in the U.S., McDonald's has held serve in the breakfast daypart.
- Analysts think Taco Bell's concerted efforts to paint McDonald's as old-fashioned have only had a limited impact on traffic.
Fri, Mar. 13, 1:39 PM
- Levy Acquisition plans to change its name to Del Taco after buying out the fast-food concept
- Shares of the company will trade on the Nasdaq under the symbol LEVY.
- The Del Taco chain has made an effort to expand its menu to include premium burritos and bowls in order to serve as a Chipotle (NYSE:CMG) and Taco Bell (NYSE:YUM) alternative.
- Expanding Del Taco into emerging and established markets is part of the plan post-buyout.
- Currently, Del Taco has about 550 restaurants in the U.S. across 16 states.
Thu, Mar. 12, 4:15 AM
- KFC (NYSE:YUM) and others may face pressure from consumer and environmental groups to change how its poultry are raised after McDonald's (NYSE:MCD) announced it would only source chickens raised without antibiotics identified as important to humans.
- Both McDonald's and Yum are stepping up efforts to win back diners lured away by chains such as such as Chipotle (NYSE:CMG) and Panera Bread (NASDAQ:PNRA), which boast antibiotic-free meats.
- Chicken stocks also took a hit yesterday on concerns that the push to remove antibiotics from hatcheries could raise costs or that inaction could crimp demand.
- Previously: Chicken stocks hit by antibiotic concerns (Mar. 11 2015)
- Previously: McDonald's unveils menu sourcing initiatives (Mar. 04 2015)
Sat, Mar. 7, 10:13 AM
- A powerhouse quarter of improved comps and widened margins is in the books for the restaurant industry as investors look forward to see if the trend extends.
- The industry is in a growth phase with eating and drinking establishments adding 58.7K jobs in February on a seasonally adjusted basis to mark the biggest monthly gain since December of 2012.
- The early read on Q1 traffic is favorable (ex-weather), although chains could see some wage inflation pressure and innovation outlays with differentiated concepts popping up at Habit Restaurants (NASDAQ:HABT), Zoe's Kitchen (NYSE:ZOES), Shake Shack (NYSE:SHAK), and a host of others.
- Major digital initiatives at chains such as Panera Bread (NASDAQ:PNRA) and Starbucks (NASDAQ:SBUX) also have the potential to be disruptive.
- A few screens to pick through the restaurant stock menu are listed below.
- Lowest forward P/E ratio: McDonald's (NYSE:MCD), Ruth's Hospitality (NASDAQ:RUTH), and Cracker Barrel (NASDAQ:CBRL).
- Lowest price/free cash flow ratio: Ruby Tuesday (NYSE:RT), Nathan's (NASDAQ:NATH), Jack in the Box (NASDAQ:JACK).
- Dividend yield +3%: DineEquity (NYSE:DIN), Darden Restaurants (NYSE:DRI), McDonald's, and Arcos Dorados (NYSE:ARCO).
- Top YTD performers: Jack in the Box (JACK), Wendy's (NASDAQ:WEN), Sonic (NASDAQ:SONC), El Pollo LoCo (NASDAQ:LOCO).
- PEG ratio below 2.00: Chuy's Holdings (NASDAQ:CHUY), Ruth's Hospitality, Krispy Kreme Donuts (NYSE:KKD), Cheesecake Factory (NASDAQ:CAKE), Brinker International (NYSE:EAT), Denny's (NASDAQ:DENN), Buffalo Wild Wings (NASDAQ:BWLD).
- Short ratio below 2%: Yum Brands (NYSE:YUM), Jack in the Box (JACK), Chipotle (NYSE:CMG), DineEquity, Bloomin' Brands (NASDAQ:BLMN), Denny's (DENN), McDonald's (MCD).
- Previously: Restaurant stocks continue hot streak (Feb. 24)
Fri, Mar. 6, 8:03 AM
- A light bulb has gone off with some large retail chains such as Wal-Mart (NYSE:WMT) and TJX Companies (NYSE:TJX) which have hiked low-level wages in order to improve employee retention rates.
- The math as compiled by Bloomberg is pretty compelling: The average retail sales worker makes $21,140 a year, while it costs $3,400 in training costs to replace them. At a high turnover rate it becomes more economical to lift wages.
- The development is interesting to economists pondering the future impact of Wal-Mart's (10% of all retail sales in the U.S.) new wage structure on U.S. unemployment rates.
- Related stocks: YUM, MCD, KR, TGT, SHLD, HD, WBA, LOW, GPS, JCP, BLMN.
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