Posts by Chris Nichols
Chris Nichols at Yahoo Finance 1 day ago
The headline out of the way, it's technically only partly about the hamburgers at this San Diego-based chain. Because along with its namesake restaurants, Jack in the Box also owns the Qdoba Mexican Grill, a Tex-Mex-style fast casual operator that's making more of an impression on investors and diners alike. And 600-store Qdoba's emergence as a focal point of the business was one of the key factors in the tremendous showing by Jack in the Box shares this year.
Related: Yahoo Finance Company of the Year - Under Armour
Here's why Jack took the gold medal:
Knowing the customer
Not without issues
Chris Nichols at Yahoo Finance 4 days ago
For the most part, America's '50s-style drive-in diners are a long gone part of the past. At Sonic (SONC), they're very much part of the present. And, with 3,500 stores, this Oklahoma City-based burger and shake seller has a story Wall Street continues to support.
It hasn't always. From 2008 through 2011, Sonic's shares fell in three of the four years. But it's been straight up since, with a 55% gain in 2012, a 94% climb last year and another 35% advance in 2014, including an all-time high earlier this month. (I wrote about the stock in March and asked whether investors might be thinking the valuation was high after its two-year surge. Clearly, they weren't -- it traded around $23 then, and it's above $27 now.)
What's helping the company win, CEO Cliff Hudson says, is a diversified menu that isn't overly reliant on burgers. Beef costs have been elevated, and Sonic's menu, he believes, has offered it protection.
And when the food's ready, you'll have it delivered by a carhop. You don't see a lot of those these days. But at Sonic, you do.
Chris Nichols at Yahoo Finance 8 days ago
Every year, the restaurant industry produces an overload of news. A lot of it's noise that generates buzz, gets the name in the news and, in the modern day, starts people chattering on social media.
Though not every development will have a real, lasting impact, some do. In thinking back on this year, I wanted to highlight some of the restaurant decisions that I believe have the potential to truly make a difference for the companies involved. Competition for the dining-out dollar is as intense as ever, and so many operators have struggled to gain guests. Sales growth hasn't always been impressive, though there are signs in the industry that 2015 could be good.
For my list, I only considered publicly traded companies and their divisions. So regardless of how great Chick-fil-A might have been, they weren't in the running. Also, it had to be primarily an idea put on the market this year.
Here then are my five favorite moves in 2014 that I believe can resonate for years ahead:
Other noteworthy developments:
Chris Nichols at Yahoo Finance 11 days ago
Furniture and electronics retailer Conn's (CONN) has had a series of major moves after recent earnings reports. The trend repeated itself Tuesday, and this time it was one of the very negative varieties.
On this day, investors were fleeing as fast as they could. The stock was down 40.6% to $20.83 a share, putting the year-to-date loss at 73%. Conn's shares are now worth only about one quarter of what they were at the all-time high of $80.34, set last December.
The summary: Customer credit delinquencies have been a concern and continue to be. Following prior earnings warnings, the company now has decided to withdraw its 2015 outlook. It had a loss for the latest quarter when Wall Street was anticipating a profit. And the chief financial officer is leaving immediately. This news arrives two months after Woodlands, Texas-based Conn's said it was studying strategic options for the business, including the potential for a sale.
Chris Nichols at Yahoo Finance 12 days ago
McDonald's (MCD) had a horrible month in November, with sales down in all three of its major regions including a stunning decline in the U.S. Shares were slumping as those results combined with details on how the strong dollar will dent its profits to send traders to the door.
Overall global same-store sales fell 2.2% in November, worse than the 1.7% decrease analysts had estimated, Consensus Metrix said prior to the news. Especially notable was the U.S., where monthly comparable sales slid 4.6%, more than double the 1.9% downward reading that was projected and the worst single month in years for the Oak Brook, Ill., burger seller. Europe's 2% retreat was slightly worse than the 1.9% drop that had been forecast there, while the Asia-Pacific, Middle East and Africa market continued to be hurt by a China supplier investigation that took place over the summer, falling 4% vs. the 3.8% that was anticipated.
Chris Nichols at Yahoo Finance 16 days ago
Accurately predicting the future with any regularity remains impossible. That applies to the market and everything else, and it's true for investors, as well as reporters.
We all know though that only with the benefit of hindsight can we say how any of our fortune-telling actually worked out. So with the end of 2014 near, and in the interest of accountability, I decided to review some of the positions I'd taken throughout this year to see where I was right and where I was wrong on the restaurant stocks, the group I write about most. Doing so turned up a few highlights, a few lowlights and a couple of concepts to never forget.
It took just over a month for that to be completely off. Consumer discretionary stocks surged, and restaurants reversed, turning positive for the year.
Lesson 1: Continuing to go against the market direction can be a bad idea. The market is powerful, maintaining great influence over individual stocks. And it's smarter than you. Ever heard a similar notion before?
Chris Nichols at Yahoo Finance 24 days ago
With all the talk about holiday spending and mall crowds, Santa Claus rallies and every other market-related cliche, retailer stocks might logically seem like a relatively safe bet at the end of a Wall Street year, considering the amount of money they're ostensibly collecting from all us consumers.
But let's be serious. Nothing in the market's that easy. In the last 11 years, the holiday-time trading activity of a group of 10 prominent American retailers, including Walmart (WMT), Apple (AAPL) and GameStop (GME), tells a tale of mediocrity. That's because in that span, putting investing dollars in the group's stocks during the seasonal shopping rush had about as much of a chance of being disappointing as it did of being cheerful. The chart details how the group of these 10 did each year:
Maybe sales will be great. And maybe the retail stocks will be, too. Just be careful about being too sure of that.
This article has been updated from Nov. 19.
The Habit Restaurants (HABT) opened for trading Thursday with a big first-day gain -- doubling from the IPO pricing level -- making it the latest fast-casual chain to join the market along with recent offerings such as Zoe's Kitchen (ZOES) and El Pollo Loco (LOCO).
Lately, the stock was at $36.11, giving it a whopping 100% bump from the pricing, which occurred Wednesday at $18, and a 20% advance from the $30 opening trade. Habit, an Irvine, Calif.-based company effectively controlled by private equity firm KarpReilly, offered 5 million Class A shares to the public. The pricing was above the anticipated range of $14 to $16 a share, raising proceeds of $90 million before accounting for costs related to the offering.
Potential cost concerns
The restaurant stocks, on the whole a losing proposition for most of the year, are very much back.
Although the first three-quarters of 2014 suggested the half-decade rally for the group was ending, a powerful reversal in the last few weeks has made that idea a distant memory. In early October, we wrote this: "Without an astonishing turnaround between now and Dec. 31, a five-year run of wins is about to be over for the restaurant stocks." That astonishing turnaround indeed has happened.
By doing so, it provides further evidence that: First, the business press, as often is already said, has a tremendous ability to state precisely the opposite of what is about to happen in the market. Two, it's futile to offer forward-looking projections based on securities whose prices change multiple times daily. Three, past performance is no guarantee of future results, as so many mutual fund documents smartly declare.
Popeyes Louisiana Kitchen (PLKI), which has set multiple all-time trading highs in 2014, did so again Thursday, this time after the chicken seller posted an astonishing quarterly increase in same-store sales and raised its forecast for the year.
The stock has now surpassed Wall Street's average pre-earnings price goal of $50.83, taking its year-to-date gain to 34.4%. Earlier in the session it traded as high as $52.76. Recently, it was adding 7.6% to $52.15.
The latest surge followed the Atlanta-based restaurant chain's announcement that it earned 42 cents a share in the third quarter, 1 cent ahead of estimates, on revenue of $54.9 million, up around 11% from the same period a year earlier. The top line was $400,000 under the consensus forecast, but that was largely irrelevant to traders who focused on same-store sales growth of 7.3%, far beyond the 2.4% analysts' view, as well as on the improved outlook.