Posts by Chris Nichols
- Chris Nichols at Yahoo Finance3 days ago
For shares of Potbelly (PBPB), the steep downward trend that's been the hallmark of its brief time as a public corporation got even worse on Thursday, as the Chicago-based sandwich shop had the worst decline since its IPO.
In recent trading, the stock was sinking 24.1% to $11.12 after it told investors second-quarter revenue and earnings would miss expectations, with a shortfall in same-store sales getting the blame. That continues a horrid time for the shares, which started trading last October and reached a high of $33.90. Since then, it's been almost entirely down, and it's now beneath the initial public offering price of $14. Even before the latest slide, the stock was already 57% below its peak. Now, it's 67% from its best level.
- Chris Nichols at Yahoo Finance4 days ago
With Darden Restaurants' (DRI) announcement that a remodel for its Olive Garden division has started, the main takeaway is a simple one — it's nowhere near to giving up on the Italian-themed chain. The other takeaway is that this latest attempt to spur customers to take a seat at its tables may well mean activist investors, who've been vocally at odds with management, received another reason to complain.
Olive Garden has been struggling badly to retain guests, an issue weighing down numerous casual-dining operators who've seen customers opting for fast-casual names such as Chipotle (CMG). To try and reverse that, Olive Garden has been seeking buzz. It's been given a logo makeover, and it introduced new menu items to join its standard fettuccine and breadsticks fare, including an olive and cheese small plate, salmon with bruschetta, crab-topped chicken and a burger.
Part unapologetic fast-food operator, part fast-casual eatery, Jack in the Box (JACK) has rewarded its shareholders mightily of late.
The San Diego-based hamburger seller is a somewhat quirky shop with a surprisingly diverse menu. Along with its burgers, it has tacos, egg rolls, day-long breakfast and even some offerings on the lighter side, including egg whites and salads.
It also has a stock that's climbed 182% since the start of 2012. In 2014, it's posting an 18.5% gain.
For those in the 21 states where Jack in the Box stores are located, a rather bizarre smiley-faced mascot named (what else?) Jack is likely what comes to mind, not trading prices. The chain's mythical founder is known best for appearing in ads that are always humorous — and sometimes test the boundaries of what's socially acceptable. With themes that seem to allude to sexual harassment and marijuana-induced munchies, they certainly aren't ads you'd see from the Big Three burger sellers. (See video below for a prime example.)
Zoe's Kitchen (ZOES) already has passed its first key market test — pricing well in its IPO and remaining elevated since — but a second milestone is rapidly approaching: the initial quarterly report for the Mediterranean-style chain. When Zoe's posts its numbers, expected Thursday after the market close, Wall Street will be looking for a loss of 3 cents a share and sales of $44.8 million, according to FactSet. The projected loss, a trend Zoe's entered the public market with, might make this stock a no-go for some investors. But plenty of others have looked past that, choosing to focus instead on sales growth and expansion potential for this still small Plano, Texas-based restaurant operator. As has been the case with similar stocks in the past, to little avail, this group is hoping to find "the next Chipotle (CMG)."
Conn's (CONN) was at it again on Monday — it being another big post-earnings move for the regional furniture and electronics retailer.
This time, the stock was up as much as 10% from its prior close following its latest quarterly numbers. In recent trading, the shares were ahead by 6.1% to $49.49. Lifting the stock were better-than-expected results on the main data for the past three months. Conn's, based in The Woodlands, Texas, had adjusted earnings of 80 cents a share in the first quarter, with revenue of $335.4 million, up 33.6% from last year. Same-store sales rose 15.6%.
Analysts were estimating a profit of 73 cents, revenue of $328.9 million and a same-store sales increase of 11.7%, according to FactSet. Conn's kept its most recent fiscal 2015 earnings forecast of $3.40 to $3.70 a share, excluding items.
Credit revenue climbed to $57.4 million. As of April 30, 8% of the customer portfolio was more than 60 days late. That had fallen to 7.8% as of May 31. At the end of January, it stood at 8.8%.
The steady stream of menu buzz and upbeat news that propelled Wendy's (WEN) shares nearly 86% higher last year has been largely absent in recent months, leaving investors with a stock that's lost ground while its competitors have continued to rise.
Last year Wendy's benefited from a strong market, a better restaurant sector, and an even more powerful showing by beef-related shares, but it also earned the advance with what it did on its own. Yahoo Finance named it the restaurant stock of the year, as several factors contributed to its run-up — restaurant remodels, new marketing campaigns, popular limited-time sandwiches, higher dividend payments and a reduction in the number of stores it owns.
Papa Murphy's (FRSH) has traded for less than a month, but its first quarterly report is already out, and it's providing a good sense of how Wall Street still views this stock. The answer? Not especially well.
Although the numbers compared well with what Papa Murphy's projected before completing its IPO, traders simply aren't yet scrambling for this name.
Recently, shares were up 3.3% to $9.35, off session highs at $9.68. Viewed exclusively as a one-day event, it would be easy to see this as an endorsement of the name. In reality, this action is tepid for a stock that's been a terrible performer since going public earlier this month. In 14 trading sessions before Friday, only two days had seen gains. The day of its quarterly report was the worst one yet, with the stock closing down 7.3%.
Red Lobster, it seems, is about to be somebody else's problem.
Though it's not yet a done deal, Darden Restaurants (DRI), the owner of the seafood chain, set plans to sell it to private equity firm Golden Gate Capital in a $2.1 billion agreement. This sale had been contemplated for some time, as Red Lobster has been a drag on its parent company. Like many casual dining restaurants, including DineEquity's (DIN) Applebee's and Brinker International's (EAT) Chili's, customer counts largely have been weak for months as competition has intensified and "fast casual" chains such as Chipotle (CMG) have become more popular.
The slowdown in share-price growth for the nation's restaurants has continued at the midpoint of the second quarter, but a few names have forged ahead, none perhaps more notable than McDonald's (MCD). Despite monthly and quarterly numbers that have hardly been impressive overall, struggles with competition, tepid sales improvements and ongoing pressure from health food supporters and labor activists calling for higher wages (including strikes this week), McDonald's stock is turning in a nice 2014. Even with its lack of business perfection, shares this week set an all-time intraday high of $103.78, surpassing by 8 cents the record of last April. It's not the best of the restaurant stocks, and it's not the leader in the Dow Jones Industrial Average. However, since the close of trading Dec. 31, McDonald's has gained 5.5%, while the Dow is slightly negative. The shares have also outpaced the broad market measured by the S&P 500, which has added 2.2%. Against the average restaurant, it's even better, as 42 stocks surveyed by Yahoo Finance have lost an average of 3.7% over the past four and half months. At March 31, the group's drop was 2.6%, compared with a 1.6% gain for the S&P, so the divergence between the industry and the market is becoming more pronounced. That marks a break from the past few years. Restaurants were better than the S&P every year from 2008 through 2012 by a considerable margin, and in 2013, the difference was almost 25 percentage points — restaurants surged 54.1% vs. the market's 29.6% climb. McDonald's was one of the disappointments, relatively speaking, ending the year up 10%. With the decrease in the stocks, they're getting a bit closer to their average earnings multiples, though they still have more room to decline to truly normalize. The five-year average for the stocks is about 22, but after last year's run-up, they had gotten past 27. These days, the set has a 24.6 forward price-to-earnings ratio.
- Chris Nichols at Daily Ticker2 mths ago
Advocates for raising the pay of U.S. fast-food industry workers are bidding to reboot interest in their movement in a big way, with hopes they'll spur supportive strikes at restaurants across the globe on May 15.
For the sympathizers, the goal of getting these employees wages of $15 an hour in the United States is a noble one that would reward cooks, cashiers and cleaning crew for doing thankless jobs most of us would rather not call careers. Detractors say a minimum-wage raise to this level will destroy businesses financially or produce exorbitant menu prices, ultimately leading to joblessness for at least some of the nation's 13.5 million restaurant workers workers. So those agitating for this change could, ironically, be the most hurt by it.
The Daily Ticker’s Aaron Task interviewed Kendall Fells, organizing director of Fast Food Forward, about Thursday's planned strike in the video above.