Jun. 17, 2014, 11:50 AM
- Beef prices keep moving higher as a drought in Texas diminishes what's already a tight supply of cattle in the U.S.
- Though beef demand in the U.S. is peaking with the summer grilling season starting, the impact on margins for sellers from higher wholesale prices could be felt later this year when consumers push back against absorbing the extra costs.
- What to watch: Chipotle (CMG) passed on its menu price increases to consumers with relative ease, but other chains (MCD, BKW, WEN, TXRH, BLMN, RUTH) are expected to feel pressure on their bottom lines from higher beef prices.
Jun. 17, 2014, 7:52 AM
- Count IMF Managing Director Christine Lagarde as another proponent of raising the federal minimum wage in the U.S.
- Lagarde points to the 50M working Americans living below the poverty level in making her claim that "we" have to do something about it.
- Legislation on a minimum wage increase has been stalled in Congress, but is likely to be teed up as mid-term election issue.
- Related stocks: MCD, BKW, SONC, DENN, WMT, JACK, GTIM, WEN, TAST, PLKI, PZZA, YUM, NATH, CKEC, AMC, RGC.
- Bloomberg Lagarde interview
Jun. 12, 2014, 1:48 PM
- Burger chain Krystal is coming back from the dead with impressive gains in unit-level profitability.
- The turnaround by the privately-owned company has been strong enough that it plans to expand rapidly into new states.
- What to watch: A fast-growing Krystal could give established burger chains (MCD, WEN, BKW, SONC) something to think about with its ability to drive traffic in regions where it will be a novelty.
Jun. 3, 2014, 8:58 AM
- The city council in Seattle approves an increase in the minimum wage to $15 per hour.
- Mayor Ed Murray is expected to sign the measure into law today.
- The pay floor will be implemented over several years with the specific time-frame depending upon the size of a business.
- Fast-food restaurant chains (MCD, BKW, WEN, JACK, YUM, SONC, PLKI) are expected to feel the biggest pinch from higher minimum wage levels.
Jun. 2, 2014, 11:34 AM
- Improved traffic at restaurants chains in April helped boost the Restaurant Performance Index monitored by the National Restaurant Association by 0.3% to 101.7.
- The Expectations Index, which measures the six-month outlook for operators, improved 0.2% to 102.2 to mark the highest level for the index in two years.
- 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
May. 15, 2014, 6:48 PM
May. 15, 2014, 7:51 AM
- Fast-food workers are planning to walk off the job at chains across the country today in an organized move to protest low wages.
- The push for a higher minimum wage has gained traction in several states and major cities, although President Obama's proposed $10.10 per hour rate doesn't have the support in Congress yet for a federal minimum wage hike.
- Related stocks: MCD, BKW, JACK, WEN, SONC, DENN, PLKI, DPZ.
May. 8, 2014, 2:23 PM
- Wendy's (WEN -1.1%) reports company-owned same-restaurant sales registered a 1.3% gain in Q1. Franchised outlets saw a 0.6% comp gain.
- The company struck a note of caution with its restaurant margin guidance. Wendy's expects restaurant margin in a range of 16.3% to 16.8%. The mark is lower prior guidance of 16.8% to 17.0% due to impact of higher foods which will be tough to pass on in the form of pricing.
May. 8, 2014, 7:03 AM
May. 6, 2014, 1:34 PM
- Restaurant chains saw sales increase at a slightly higher rate last year than sales at independent chains and concepts, according to data from GE Capital.
- The 100 largest chains saw sales grow at a rate of 3.5% vs. the industry average of 3.1%.
- Consumers spent more money per restaurant visit in 2013, but industry-wide same-store sales fell off 0.1% with traffic numbers down.
- For the 6th year in a row, sales at quick-service restaurants rose faster than sales at full-service establishments.
- 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.
Apr. 30, 2014, 1:34 PM
- Republicans in the Senate have blocked a bill that would increase the federal minimum wage to $10.10 per hour incrementally over 30 months.
- The development sets up minimum wage reform as a major topic during November elections.
- Consumer companies have mixed opinions on the topic. Though some larger employers could feel a pinch from a higher level of minimum wages (MCD, SWY, KR, WEN) - some analysts think retailers (WMT, DG, FDO, DLTR, TGT) selling to lower income brackets could get a boost. There's also some speculation that more mom-and-pop shops will be forced out of business if the minimum wage goes to over $10 per hour.
Apr. 28, 2014, 2:51 PM
- The restaurant industry is watching with interest a late push by waiters and bartenders in Seattle to drum up support against a proposed $15-per-hour minimum wage law in the state.
- The group fears a minimum wage law hike will significantly lower the level of tips servers receive from customers.
- The big picture: The potential for minimum wage increases - either on a federal level or state by state - has been a hot topic in dissecting restaurant stocks. Some analysts see a significant bottom line pinch as companies have a difficult time passing on the extra costs to consumers in the form of higher prices.
- Related 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.
Apr. 2, 2014, 1:17 PM
- The National Retail Federation wants Congress to pass the bipartisan Save American Workers Act to amend the Affordable Care Act’s definition of full-time employment from 30 hours per week to 40 hours a week.
- The measure could have important consequences for the restaurant industry.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, SONC, WEN, THI, BKW, CHUY, BLMN, PZZA, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN
Mar. 31, 2014, 1:40 PM
- The National Restaurant Association's Restaurant Performance Index stood above 100 for the 12th straight month after ending February at 100.5.
- The index dropped 20 bps from the level seen in January. On a year-over-year comparison, the index was 0.6% higher.
- "Looking forward, operators are generally optimistic about sales gains in the months ahead, although they aren’t as bullish about the overall economy," notes the industry association.
- Related stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, BKW, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
Mar. 24, 2014, 7:27 PM
- As U.S. corporations sit on $1T-plus in cash and with many facing organic growth challenges, Morgan Stanley lists 44 multi-billion dollar cap companies it thinks have a high likelihood of receiving at least one tender offer over the next 12 months.
- In the energy sector: NFX, SD, TDW.
- In materials: CLF, AXLL, UFS, RGLD.
- Consumer discretionary: SBGI, WEN, TPX, EAT, BYI, DWA, JCP, AEO.
- Consumer staples: INGR, HAIN, HSH, WWAV.
- Health care: CELG, ESRX, WLP, REGN, ALXN, AET, CI, BDX, CERN.
- Financial: NSM.
- Tech: BRCD, ONNN, TIBX, SPWR, IM, JBL, SUNE, TER, ARRS, NSR.
- Telecom: CCI, SBAC, LVLT, WIN, FTR.
Mar. 5, 2014, 9:06 AM
- A recent poll by the Wall Street Journal and NBC indicates 63% of American support raising the minimum wage.
- Though the Republicans are expected to challenge anything brought to the floor of the House, there's a growing consensus in DC that some minimum wage legislation will eventually pass.
- Democrats argue that the current minimum wage level of $7.25 per hour is low by historical standards when adjusted for inflation.
- Related stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, CEC, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, AEO, ANF, ARO, BBBY, BJ, CHS, COST, DG, DLTR, GPS, HD, JCP, JWN, KR, KSS, LOW, LB, NDN, ODP, PIR, PLCE, RSH, SPLS, SWY, TGT, TJX, URBN, WMT
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