Thu, Apr. 16, 10:28 AM
- McDonald's Japan expects to show and operating loss of ¥25B ($210M) this year to triple up the amount it was in the red last year.
- The company has already announced a plan to cut stores and jobs at its headquarters.
- Q1 comparable-store sales fell just over 30% for the beleaguered restaurant chain.
- A new business revitalization plan is expected by the company to lead it to profitability in 2016.
- Parent company McDonald's (MCD +0.1%) has a 50% stake in McDonald's Japan.
- McDonald's Japan press release
Wed, Apr. 15, 3:37 PM
- The outlook from U.S. franchisees on McDonald's (MCD -1.2%) is at an 11-year low, according to survey from Piper Jaffray.
- The company stands accused by some of the franchisees of trying to be all things to all people and burdening owners with initiatives off the core business model.
- The Create Your Taste kiosk ordering system is a $125K cost with poor sales potential, laments one McDonald's franchise partner.
- McDonald's maintains the Piper survey pool is too small and that is has a better read on the mood under the Golden Arches.
- U.S. same-store sales for McDonald's fell 1.7% in 2014.
- McDonald's has under-performed the S&P 500 Index by a wide margin over the last 5 years (+40.5% vs. +76.3%).
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.
Tue, Apr. 14, 3:30 PM
- McDonald's Japan plans to renovate 150 to 200 outlets in the nation in a bid to increase store traffic.
- Store openings will be reduced to 20 from a level of 40 a year ago.
- The company will take out loans of 22B yen ($183M) to pay for the remodels.
- McDonald's (NYSE:MCD) owns a 50% stake in the Japanese holding company.
Sat, Apr. 11, 10:22 AM
- M&A activity in the restaurant sector is tracking below the level seen in the broad market, observes Nation's Restaurant News.
- Concerns on the high valuations of publicly-traded brands have limited merger activity to franchise-heavy companies or leveraged deals like the one slapped together by 3G Capital with Burger King and Tim Hortons to create Restaurant Brands International (NYSE:QSR).
- "Public company stocks are priced toward perfection," warns KeyBanc director Brad Swanson.
- The reluctance of large companies to snap up new concepts is part of the reason growth chains such as Habit Restaurants (NASDAQ:HABT), Zoe's Kitchen (NYSE:ZOES), El Pollo Loco (NASDAQ:LOCO), and Shake Shack (NYSE:SHAK) have gone down the IPO path, while Chipotle (NYSE:CMG) and Buffalo Wild Wings (NASDAQ:BWLD) are incubating their new concepts in-house.
- Bojangles' (BOJA), Smashburger, or Five Guys could be the next IPO high-flyer.
- There's a thought that the smart money is passing on the sector while individual investors are playing roulette looking for the next restaurant superstar.
- Numbers dive: The historical average for restaurant chains is an enterprise value multiple of 10X cash flow for quick-service chains and 7.9X cash flow for casual-dining chains vs. the current trading level of 14X EV for quick-service brands and 10X EV for casual-dining names.
- Buy-and-hold investors still have options on the menu. The restaurant stocks with the lowest 5-year P-E ratio (estimated) are McDonald's (NYSE:MCD), Ruby Tuesday (NYSE:RT), Red Robin Gourmet Burgers (NASDAQ:RRGB), Bob Evans Farms (NASDAQ:BOBE), and DineEquity (NYSE:DIN).
Wed, Apr. 8, 10:51 AM
- McDonald's (MCD +0.5%) will add premium burgers to its menu in a trial run.
- The sirloin products are expected to hit menus on May 12 and be priced around $5 by the company while franchisees can set their own prices.
- The McDonald's premium burger lineup: The Steakhouse Third Pound (sauteed mushrooms, white cheddar, grilled onions, peppercorn sauce), The Bacon & Cheese Sirloin Third Point (bacon,red onion, white cheddar), The Lettuce & Tomato Sirloin Third Pound (leaf lettuce, tomato, red onion, white Cheddar, pickles mayo, beef seasoning).
- Shake Shack (SHAK -1.7%), Wendy's (WEN -0.9%), and Hardee's are active in the premium burger category.
Mon, Apr. 6, 9:11 AM
- RBC Capital keeps an Outperform rating on McDonald's (NYSE:MCD) with the company charting a fresh course under a new CEO.
- The slow start by the restaurant company this year prompts RBC to cut its price target to $110 from $115.
- MCD flat in premarket trading at $95.81. Shares haven't broken past $104 over the last year.
Sun, Apr. 5, 9:18 AM
- T, PM, VZ, DUK, STX, GM, GE, MCD, CAT and DOW are 10 “high-quality” S&P 500 stocks with dividend yields of 3.5-5.7% and promising growth potential, Barron’s says, citing Howard Silverblatt of Standard & Poor’s Financial Services.
- 60 companies in the S&P 500 yield 3.5% or more, but the above stocks cover their dividends from estimated 2015 earnings. The list also excludes REITs and MLPs.
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, Apr. 1, 3:50 PM
- McDonald's (MCD -1.2%) plans to raise wages and boosts benefits across the U.S.
- The company has set July 1 as a target date to give 90K workers at company-owned stores a raise to an average of $9.90 per hour with the average wage expected to top $10 by the end of 2016
- Currently, workers make $9.01 per hour on average.
- Subsidies for some education costs will be also be available for McDonald's employees.
Wed, Apr. 1, 3:26 PM
- S&P Ratings revises its outlook on McDonald's (MCD -1.3%) to Negative on a lowered view on if the company can turn around sales within a year or two.
- Corporate credit ratings on McDonald's were affirmed at their current levels by the ratings agency, although further weakness in same-stores growth could prompt a revision.
Wed, Apr. 1, 8:18 AM
- McDonald's (NYSE:MCD) is being looked at by the European Union over a tax arrangement it has set with Luxembourg, reports The Guardian.
- If a formal investigation into the restaurant operator is launched by the EU it would join Apple, Amazon, and Starbucks which have had similar probes over so-called tax rulings.
Mon, Mar. 30, 3:07 PM
- McDonald's (MCD +1%) says it will begin table service in Germany as part of its transition to a modern burger company under new CEO Steve Easterbrook.
- Customer orders will be placed at digital kiosks or via waiters with tablets.
- The company has been active in the U.S. over the last month with an antibiotic policy change and by testing new initiatives - including a simplified menu and all-day breakfast.
- Shares of McDonald's cracked the $100 level in early March, but have sauntered along in a tight $95-$98 range since then.
Mon, Mar. 30, 9:23 AM
- McDonald's (NYSE:MCD) will test all-day breakfast in at least one U.S. market, tips Janney Capital.
- The development could put some pressure on fast-food rivals, although it's unclear how the restaurant chain will free ups it griddle for orders from a full menu (breakfast and lunch/dinner).
- MCD +0.4% premarket.
Mon, Mar. 23, 3:24 PM
- The Barron's 400 has regularly beaten the S&P 500 (NYSEARCA:SPY) since its 2007 launch, writes Chris Dieterich, and also powers the Barron's 400 ETF (NYSEARCA:BFOR), which has topped the S&P 500 by nearly 500 basis points since starting in June 2013. BFOR is up 6% YTD, more than double that of the S&P 500.
- Among those added to the index during last week's twice-yearly rebalancing were Celgene (NASDAQ:CELG), American Airlines (NASDAQ:AAL), Starbucks (NASDAQ:SBUX), and Ameriprise Financial (NYSE:AMP).
- Among those dropped were McDonald's (NYSE:MCD), Wells Fargo (NYSE:WFC), Verizon (NYSE:VZ), and IBM.
- A "ruthless" quantitative security-selection method screens for growth, value, and cash flow, and filters further with other factors such as diversification.
Mon, Mar. 23, 10:47 AM
- Hedge fund player Glenview Capital Management thinks McDonald's (MCD +1.3%) could unlock close to $20B in value with a REIT, according to reports.
- Larry Robbins of Glenview has given his view on splitting McDonald's into two companies in talks at conferences earlier this year.
- As is typically seen with REIT chatter, shares of McDonald's have perked up today on the new mention by Glenview.
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