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.
Thu, Mar. 5, 2:12 PM
- KFC (NYSE:YUM) plans to sell premium coffee in thousands of outlets in China this year.
- Reports indicate the coffee will go for 10 renminbi ($1.60), a level which undercuts the pricing at Starbucks.
- The company says early results of the initiative have been promising.
- The aggressive coffee strategy by KFC in China isn't planned for the U.S.
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.
Tue, Mar. 3, 9:09 AM| 1 Comment
Mon, Mar. 2, 11:59 AM
- A demonstration by Visa (NYSE:V), Pizza Hut (NYSE:YUM), and Accenture (NYSE:ACN) at the Mobile World Congress in Spain will give a peek at where the connected car concept can go.
- The demo will mimic employees at a Pizza Hut location being alerted by the presence of a customer in a parking lot through Beacon and cellular connectivity.
- Under the scenario, payments through Visa Checkout could allow drivers to never leave their car.
- The partners will roll out the concept in a 3-month test run in California this spring.
Thu, Feb. 26, 8:41 AM
- Yum Brands (NYSE:YUM) signs a franchise deal with Asrapport Dining to launch Taco Bell locations in Japan.
- Currently, the company only has a few Taco Bells outlets on U.S. military bases.
- McDonald's has had a dismal time in Japan over the last year through its joint venture in the region.
- Shares of Asrapport soared in Tokyo trading earlier
Thu, Feb. 19, 9:28 AM
- Shares of McDonald's (NYSE:MCD) are on watch after Wal-Mart announces a broad increase in hourly wages for its U.S. workers.
- The two companies have been the largest targets of labor protests over the last year over their wage policies.
- Fast-food chains Wendy's (NASDAQ:WEN), Burger King (NYSE:QSR), and Taco Bell (NYSE:YUM) have also seen more demonstrations than the remainder of the sector.
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.
Wed, Feb. 11, 10:37 AM
- Chain restaurants recorded their strongest pace of same-store sales in six years during January at 6.1%, according to data from Black Box Intelligence.
- An easier weather compare, $2 gas, and a more stable economic backdrop were factors.
- Traffic was up 2.4% during the month.
- The sales lift was delivered without much help from McDonald's which saw a marginal +0.4% comp gain.
- Comp sales in the Midwest improved 11.2% after the region had a much easier time with weather during January than a year ago.
- Chains with a large focus in the Midwest include Steak 'n Shake (NYSE:BH), Jimmy John's, Culvers, and Bob Evans (NASDAQ:BOBE).
- 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, TAST, GTIM, FRSH, COSI, FRS, PBPB, FRGI, QSR, CBRL, BLMN, ZOES.
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