Wed, Jan. 14, 9:17 AM
- A slide in retail sales during December was impacted by weakness with the electronics stores (BBY, CONN, HGG) and building materials/garden equipment (HD, LOW) categories.
- The biggest drag on the index was the gasoline stations component (CASY, PTRY]]) which recorded a 6.5% M/M and 14.2% Y/Y decline in December.
- Good news for the restaurant sector (MCD, QSR, YUM, SONC, WEN) as sales were up 0.8% M/M and 8.2% Y/Y during the month.
Fri, Jan. 9, 1:38 PM
- Restaurant same-store sales in Q4 rose at the fastest pace in six years, according to Black Box Intelligence.
- Same-store sales were 3.1% during December to accelerate past the 1.6% rise seen in November.
- If the slump in Q1 is backed out, restaurant comps for the year were up 1.3% after being negative in 2013.
- BBI notes lower fuel costs for consumers is a major factor in the return to growth.
- Earlier this week: Sonic Dec. comps +8.5%.
- Restaurant stocks: 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, BOBE, TAST, GTIM, FRSH, COSI, FRS, PBPB, FRGI, QSR, CBRL, BLMN, MFRD, ZOES, MCD, YUM.
Fri, Jan. 9, 8:35 AM
- The House passed a bill to redefine a full-time worker under the Affordable Care Act to 40 hours a week from 30 hours.
- The legislation could impact millions of workers as companies adjust hours and employee policies around the issue.
- The measure was passed by a vote total of 252-172.
- Senate Majority Leader Mitch McConnell has indicated the bill will see a vote in his chamber.
- The White House has threatened to veto the bill on its view it will reduce the number of workers covered by healthcare.
- Most industry groups within the restaurant and food industry have issued support for the legislation.
- Related stocks: CAKE, CBRL, CMG, 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, CASY, IMKTA, SFS, KR, WMK, SVU, WFM, SWY, VLGEA, TFM,NGVC, BIG, ZU, TUES, WMT, PSMT, COST, TGT, DLTR, BURL, FDO, DG, FRED, WBA, RAD, CVS, HABT, NDLS, PBPB.
Thu, Jan. 8, 1:38 PM
- The National Retail Federation is urging Congress to pass H.R. 30 to restore the traditional 40-hour work week standard for healthcare benefits.
- Healthcare benefits as defined under the Affordable Care Act are applied at the 30-hour level.
- CBO estimates on the impact of H.R. 30 (.pdf)
- Related stocks: MCD, QSR, WEN, JACK, DNKN, SONC.
Thu, Jan. 8, 11:26 AM
- Citi takes a bullish view on select names in the restaurant sector.
- Wendy's (WEN +1%) is initiated at Buy with a $11 price target. Analyst Gregory Badishkanian sees some of the company's initiatives helping to draw in millennials.
- Coverage on Chipotle (CMG +3.5%) is assumed again at a Buy with a $809 PT. Shares of CMG are at an all-time high after taking out $700 earlier this week.
- The investment firm is also backing Restaurant Brands (QSR +2.7%) and Brinker International (EAT +1.1%) for gains with resumed Buy ratings.
Mon, Jan. 5, 11:17 AM
- Irish beef producers have been given the green light to export to the U.S. if certain criteria are met.
- EU nations have not been prohibited from exporting to the U.S. since 1998 under the tight restrictions from the USDA.
- A broader expansion of U.S. beef imports could bring some relief to prices.
- Related stocks: TSN, LUK, OTCQX:JBSAY, WEN, MCD, CMG, TXRH, BLMN, RUTH.
Fri, Jan. 2, 3:43 PM| 6 Comments
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. 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. 18, 2014, 11:10 AM
- Wendy's (WEN +0.1%) makes some C-suite changes aimed at supporting the company's digital and international focus.
- Ex-Domino's Pizza exec Brandon Solano will take over the chief marketing officer position from Craig Bahner.
- The company also promoted VP Todd Penegor to give him oversight of the international division.
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. 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.
Nov. 6, 2014, 11:10 AM
- Wendy's (WEN +0.5%) says it will go into a cost-cutting mode after higher beef costs whacked profit in Q3.
- The restaurant operator is also contending with pressure to increase wages and escalating health care costs.
- A plan to shift more restaurants to the franchisee model through sale will also help smooth out the bottom line.
- Earnings call webcast
- Previously: Higher beef costs trim profit at Wendy's in Q3
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