Today, 3:09 PM
- There's quite a bit of action in the hamburger sector.
- Wendy's (NASDAQ:WEN) says it aims to open 1,000 new restaurants by 2020 in an aggressive push.
- The company isn't the only one looking to increase its store count. IPO high-fliers Shake Shack (NYSE:SHAK) and Habit Restaurants (NASDAQ:HABT) are expanding along with Smashburger and Five Guys. All four chains are looking to build off their differentiated concepts.
- Sector giant McDonald's (NYSE:MCD) is pushing innovation at its fastest pace in years. All-day breakfast and a Create Your Taste customization platform are two of its initiatives.
- Sonic (NASDAQ:SONC), Burger King (NYSE:QSR), and Jack in the Box (NASDAQ:JACK) have shown blazing same-store sales growth to start the year. The trio bumps up against a tougher compare in Q2.
- Though store traffic trends have been favorable, two drags on profits in the burger sector are entry-level wage increases and escalated beef costs.
Thu, May 14, 1:53 PM| 2 Comments
Wed, May 13, 4:04 PM
Tue, May 12, 5:35 PM
Mon, May 4, 11:40 AM
- There's a decent little hamburger rally underway, although it doesn't include sector giant McDonald's.
- Habit Restaurants (HABT +3.4%), Shake Shack (SHAK +5.4%), Jack in the Box (JACK +0.8%), Restaurant Brands (QSR +1.5%), Wendy's (WEN +2.4%), and Sonic (SONC +0.8%) are out all ahead of the Golden Arches on its turnaround day.
- Previously: McDonald's unveils turnaround plan
- Previously: McDonald's lower after detailing turnaround strategy
Wed, Apr. 29, 1:22 PM
- Restaurants stocks are falling harder than broad market averages with disappointing reports from Buffalo Wild Wings and Panera Bread raising some concerns.
- Increasing labor and commodity costs are seen as a threat to margins across the group.
- Today's GDP report may also be a factor in the sector falling out of favor for the day.
- Decliners include Denny's (DENN -7%), Krispy Kreme Dougnuts (KKD -5.6%), Red Robin Gourmet Burgers (RRGB -5.9%), Kona Grill (KONA -6.6%), Texas Roadhouse (TXRH -5.9%), Jack in the Box (JACK -4.6%), Bloomin' Brands (BLMN -4.7%), El Pollo Loco (LOCO -4.6%), and Cracker Barrel (CBRL -4.8%).
- Even momentum-fueled Chipotle (CMG -1.7%) and Habit Restaurants (HABT -1.7%) are peeling off some gains, while Shake Shack (NYSE:SHAK) is proving harder to knock down and is +0.2% on the day.
- Previously: Panera Bread -2% after sluggish earnings print (April 28)
- Previously: Buffalo Wild Wings slumps with chicken wing and labor costs a concern (April 28)
Thu, Apr. 23, 1:20 PM
- Restaurant stocks are catching the eyes of investors after strong reports from Domino's Pizza, Dunkin' Brands, and Cheesecake Factory set the tone.
- Some standouts on the day include BJ's Restaurants (BJRI +5.5%), Kona Grill (KONA +3.5%), Buffalo Wild Wings (BWLD +2.5%), Ignite Restaurant Group (IRG +6.1%), Del Frisco's Restaurant Group (DFRG +4.7%), Jack in the Box (JACK +2.7%).
- The common theme in the sector is underlying traffic increases and some cost-cutting are helping to lift bottom lines.
- Previously: Dunkin' Brands +7% after earnings beat and guidance lift
- Previously: Pizza stocks rip gains after stellar Domino's quarter
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)
Mon, Mar. 9, 8:28 AM
- McDonald's (NYSE:MCD) appears to have lost market share during February in the U.S.
- Black Box Intelligence estimates that comparable-store sales in the restaurant industry rose 2.1% in February vs. the 4% decline reported earlier by McDonald's for the month.
- The deceleration across the industry was strongly influenced by a 5.8% drop in New England due to a harsh winter month, while McDonald's cites broader promotional pressure.
- Within the burger sector, Sonic reported a sizzling 11.5% comp for its FQ2 which included all of February and didn't mention any promotional headaches.
- Retail analysts think Sonic (NASDAQ:SONC) and Jack in the Box (NASDAQ:JACK) have converted some loyal McDonald's customers - while on a smaller scale the higher-end burger concepts at Five Guys, Habit Restaurants (NASDAQ:HABT), In-N-Out Burger, and even Shake Shack (NYSE:SHAK) have had an influence.
- An even deeper dive into breakfast traffic has concluded Starbucks (NASDAQ:SBUX) has taken some coffee-on-the-go share.
- Previously: McDonald's misses Feb. comp mark as U.S. disappoints
- MCD -1.21% premarket to $95.95 after shares floated over the $100 level last week.
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)
Thu, Mar. 5, 8:29 AM
- A deeper dive into the Beige Book notes indicates some wage pressure is being seen in the U.S. at low-level positions, notes Bloomberg.
- The revelation could explain the round of minimum wage hikes over the last month - most notably at retail giant Wal-Mart.
- Analysts note that even a minor lift at the bottom of the wage structure puts some pressure that ripples up the chain.
- Beige Book: "A staffing firm in the Chicago District reported some companies were also willing to raise rates for unskilled workers to reduce turnover, and contacts in the Atlanta District noted increasing entry-level wages."
- Fast-food chains could be the next domino to fall.
- Previously: Beige Book takes note of oil prices and dollar (Mar. 04 2015)
- Related stocks: MCD, SONC, JACK, WEN, QSR, YUM, PZZA.
Wed, Feb. 18, 10:46 AM
- Restaurants stocks are out-performing as a group after Jack in the Box, Qdboa, Tim Hortons, and Burger King all reported comparable-restaurant sales momentum this week.
- The recent round of earnings from the sector has confirmed analyst predictions of a benefit from lower gas prices in the U.S.
- The developments have also made the recent performance by McDonald's ((NYSE:MCD) -0.2%) look even more anemic.
- Previously: Let's talks $2 gas (Nov. 29 2014)
- Previously: Restaurant sales show sharp increase in January (Feb. 11 2015)
- Leading gainers: Jack in the Box (NASDAQ:JACK) +6.0%, BJ's Restaurants (NASDAQ:BJRI) +3.6%, Sonic (NASDAQ:SONC) +2.6%, Texas Roadhouse (NASDAQ:TXRH) +2.2%, Brinker International (NYSE:EAT) +2.1%, Luby's (NYSE:LUB) +2.0%, Wendy's (NASDAQ:WEN) +1.5%, Cheesecake Factory (NASDAQ:CAKE) +1.4%, Nathan's Famous (NASDAQ:NATH) +1.3%, Ark Restaurants (NASDAQ:ARKR) +1.3%.
Tue, Feb. 17, 4:29 PM
- Jack in the Box (NASDAQ:JACK) reports system-wide comparable-store sales rose 4.4% at the Jack in the Box chain and 14.0% at Qdoba during FQ1.
- Catering sales and a new simpler menu helped to boost sales at Qdoba.
- Consolidated restaurant operating margin +100 bps to 19.3% on a sales leverage lift.
- SG&A expense rate +40 bps to 13.5%.
- Guidance: The company sees same-store sales growth of 5%-7% in FQ2 for Jack in the Box and 7.0%-9.0% at Qdoba. Full-year EPS of $2.85-$2.87 expected.
- JACK +2.65% after hours.
Tue, Feb. 17, 4:10 PM
Mon, Feb. 16, 5:35 PM
Thu, Feb. 12, 9:43 AM
- The read on retail sales in the U.S. isn't nearly as bad as the headline -0.8% M/M drop for January.
- Retail sales were up 3.3% compared to a year ago with a few sectors showing strong growth.
- Restaurant sales +11.3% Y/Y: The strong read follows up on a positive report from Black Box Intelligence on the sector. CAKE, CBRL, CMG, DPZ, DRI, EAT, JACK, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, BDL, NATH, LUB, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, HABT, NDLS, PLKI, LOCO, YUM, KKD, TAST, GTIM, FRSH, COSI, FRS, PBPB, FRGI, QSR, CBRL, BLMN, ZOES.
- Sporting goods +8.0% Y/Y: DKS, BGFV, CAB, HIBB, SPWH.
- Building material and garden +6.9% Y/Y: A favorable weather compare came to the aid of this category. HD, LOW, LL.
- Health and personal care +6.6% Y/Y: Online channels have contributed for companies selling beauty and health items. ULTA, SBH, CVS, WBA, RAD.
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