Posts by Chris Nichols

  • McDonald's, with shares struggling, names new CEO as Thompson retires

    Chris Nichols at Yahoo Finance 47 mins ago

    The two-and-a-half-year run of Don Thompson as CEO of McDonald's (MCD), a time that saw the stock flatten and sales struggle, is coming to a close, as the world's largest publicly traded restaurant operator named a new leader.

    Speculation had been building for some time that Thompson, who was with the company for nearly 25 years, might be in trouble because of McDonald's relative underperformance. The Golden Arches, with 36,000 restaurants globally, has tremendous market share and reach, as well as paying a dividend investors like a great deal, but the stock trailed many peers the last couple of years and patrons were voting to spend their dollars elsewhere.

    After word spread that Thompson would retire as president and CEO and be replaced by Steve Easterbrook, senior executive vice president and chief brand officer, the stock rose 3% to $91.50. Easterbrook first joined McDonald's in 1993, then left in 2011 before returning to the company in 2013. He will also join the board. The c-suite change will be effective March 1.

    So far in 2015, shares of McDonald's are down 5.3% from where they closed last year.

  • Shake Shack IPO buzz builds as estimated price gets boosted

    Chris Nichols at Yahoo Finance 9 hrs ago

    Shake Shack, the burger seller that's about to go public, has raised the anticipated pricing on its much-discussed IPO, adding to the buzz that's been building around the name for months.

    New York-based Shake Shack, created by restaurant entrepreneur Danny Meyer, now says the offering of its Class A shares should price between $17 and $19 a share, up from the original estimate of $14 to $16. Shake Shack, which has more than 60 stores worldwide, about half of them overseas, is likely to start trading later this week.

    Whereas previously, proceeds would have been as much as $92 million, including shares placed through the underwriters' over-allotment option, now Shake Shack could raise as much as $109.3 million. Insiders and current management will have about 85% of the voting power in the company after the offering.

    [Get the Latest Market Data and News with the Yahoo Finance App]

    The shares of Shake Shack will list on the New York Stock Exchange. The planned symbol is SHAK.

  • Here's McDonald's main worry, in one chart

    Chris Nichols at Yahoo Finance 2 days ago

    The biggest problem facing McDonald's (MCD), the one at the center of it all, is the fact that fewer customers are buying its Big Macs and other burgers.

    As discussed in an article last fall, what was likely to happen now has been confirmed: The chart above shows that McDonald's transaction counts, down in 2013, dropped again in 2014. These two consecutive decreases stand out because from 2003 through 2012, guest traffic had increased each year at the Golden Arches.

    Last year, traffic had a serious setback in the Asia-Pacific, Middle East and Africa region, which lost customers because of negative supplier news in China. However, transactions were down in all major regions. In Europe, they've declined three years in a row. In the U.S. and APMEA, it's been two years.

    [Get the Latest Market Data and News with the Yahoo Finance App]

  • McDonald's closes out a bad year with only hopes of better 2015

    Chris Nichols at Yahoo Finance 5 days ago

    McDonald's (MCD) had another depressed quarter to close out 2014, a year that was memorable often for the wrong reasons.

    Now its goal is to start seeing whether some of its many initiatives, from greater customization to technology enhancements, get the business turned around this year. So far, investors aren't full of confidence, with the stock trading down after an earlier gain. And company management is noting yet more worries from the outset.

    On Friday, the world's largest restaurant operator measured by market value and total sales said it earned $1.13 a share in the fourth quarter, including a deduction calculated at 9 cents for a supply problem in China that lowered Asia's sales last year. That fell from $1.40 in the 2013 fourth quarter. Revenue was right under $6.6 billion, down 7%, and global comparable sales fell 0.9%, as guest traffic counts dropped in all major regions. Not especially compelling, yet in some ways it could have been worse.

    [Get the Latest Market Data and News with the Yahoo Finance App]

    Not the best start

  • Starbucks shares get post-earnings boost

    Chris Nichols at Yahoo Finance 6 days ago

    Starbucks (SBUX) shares climbed late Thursday after it met analysts' profit and revenue estimates for the fiscal first quarter and posted same-store sales figures that were a bit better than forecast.

    The Seattle-based coffee seller, the second-largest U.S.-based restaurant measured by market cap, said revenue for the quarter rose 13% from last year to $4.8 billion, and adjusted earnings clocked in at 80 cents a share. Both were in line with FactSet consensus estimates.

    Global same-store sales, a key figure, climbed 5% from the year prior, slightly ahead of the 4.8% projection. Traffic, meanwhile, ticked up by 2%. In the Americas region, traffic also rose 2%, while same-store sales were up by 5%. Same-store sales gauge company-operated stores open 13 months or longer.

    Consumers put $1.6 billion on Starbucks Cards during the quarter, which covered the holiday shopping season, up 17% from the same time last year.

    [Get the Latest Market Data and News with the Yahoo Finance App]

  • So Starbucks does need more customers in those lines after all

    Chris Nichols at Yahoo Finance 7 days ago

    From the beginning of 2009 through the end of 2013, shares of Starbucks (SBUX) had a compound annual growth rate of 52.6%. In that time, the stock went from $9 to $78. Although the market was rallying tremendously, Starbucks outperformed it each time. It also was better than its industry, year after year.

    That changed in 2014, when the stock rose only 4.7%. It trailed the S&P 500, as well as comparable companies measured by FactSet. So far in the early days of 2015, what's been an unsettled few weeks for stocks overall, it's down 1% to about $81.

    Whether it remains sluggish or gets a renewed boost in the near term is going to depend on the first-quarter earnings report scheduled for after the close Thursday. Analysts are anticipating earnings of 80 cents a share on revenue of $4.8 billion. Same-store sales for the quarter, one that includes the holidays, are seen up 4.9%. While on the surface that's perfectly acceptable, that actually would be the worst comparable-sales result since the first quarter of 2010.

    Staying for dinner

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  • Shake Shack IPO: Like an Internet stock, only with burgers

    Chris Nichols at Yahoo Finance 8 days ago

    For Shake Shack, and for those who want to invest in Shake Shack, the wait for its IPO is almost over.

    The New York-based burger chain has provided more details on its pending initial offering, saying Tuesday that the Class A stock it's issuing, up to 5.75 million shares including the over-allotment option, probably will be priced between $14 and $16 a share, raising as much as $92 million.

    It's highly likely that will be only the beginning. Because of the anticipation surrounding Shake Shack -- with it being a well-known "better burger" name founded in New York by restaurant entrepreneur Danny Meyer -- it may in fact trade well above that quickly. And considering that other new restaurants of the fast-casual type mostly have been scooped up by investors, including another burger chain, California's Habit Restaurants (HABT), Shake Shack has the makings of a very sought-after stock.

    [Get the Latest Market Data and News with the Yahoo Finance App]

  • Yes, you ARE paying more for food

    Chris Nichols at Yahoo Finance 12 days ago

    The idea that there's no inflation might not make much sense to plenty of ordinary people.

    And yet, a report issued Friday by the Labor Department indicated that, when considered as a whole, the U.S. economy isn't seeing especially higher prices. In the past 12 months, the Consumer Price Index for all items rose 0.8%, below the year-over-year rate of 1.3% recorded in the November report and far under the 10-year average. The "core" rate, which leaves out food and energy price changes, was up 1.6% in the last 12 months. Not bad.

    Of course, it all depends on how you look at it. While it's the job of professional economists to study these things, regular folks normally aren't building spreadsheets. They're concerned with eating and driving, with all the daily thinking about the world's costs in a different way. That includes spending a lot of time noticing the items that are getting pricier, especially the necessary ones like food.

    --Beef and veal: Up 18.7%.

    --Dairy and related products: Up 5.3%.

    --Fruits and vegetables: Up 3.2%. Both fell in 2013.

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  • For McDonald's, it was a year to forget -- and 2015 might be the same

    Chris Nichols at Yahoo Finance 13 days ago

    In a few days, McDonald's (MCD) will detail what was a largely forgettable year for the company and its shareholders when it releases its 2014 financial results. Those results are almost assured of showing the type of disappointment that, until recently, had been unheard of at the Golden Arches.

    Undoubtedly, it also will spend ample time describing how its sandwich-customization plans, appreciation for technology and presumably less-crowded menu will be returning the world's largest restaurant chain to greatness in all ways. None of that will be especially new, so unless it unveils something astonishing to go along with the countless initiatives already known to be under way, 2015 probably won't be much different than the year just past.

    [Related: 3 key questions for McDonald's in 2015] Maligned at every turn

    [Related: Is the age of McDonald's over?]

  • Average household to save $750 this year from lower gas prices: Energy Dept.

    Chris Nichols at Yahoo Finance 15 days ago

    The Energy Department is predicting an average U.S. household will save $750 this year on gasoline costs compared with what was spent in 2014, according to its latest Short-Term Energy Outlook.

    With crude prices dropping fast, data from the Energy Information Administration show that weekly retail prices for regular gas averaged $2.14 a gallon as of Jan. 12. Prices haven't been that low since May 2009. For the first quarter, the EIA expects prices paid to average $2.16 a gallon, whereas the estimate for all of 2015 is $2.33 a gallon, which would be down more than $1 from $3.36 a gallon in 2014.

    In its first estimates for 2016, the EIA is forecasting a retail price for regular gas of $2.72 a gallon.

    Brent crude and West Texas Intermediate, the main oil futures contracts, have lost more than 50% from their highs of only a few months ago. The EIA now believes Brent will average $57.58 a barrel this year, then rise to $75 a barrel in 2016. WTI is estimated at $54.58 this year and $71 next year.

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