Posts by Chris Nichols
Chris Nichols at Yahoo Finance 2 hrs ago
In one of the leading non-surprising, yet still-most-talked-about news items of 2015, shares of Shake Shack (SHAK) were soaring on their first day of trading Friday.
The New York-based burger chain, which had 63 stores when it filed for its initial public offering, was recently trading at $48.60. The stock opened at $47, more than double the $21 where it priced Thursday. Demand had been significant, with the company initially planning to price its shares at $14 to $16, then increasing that to $17 to $19. That still wasn't enough on Wall Street, and the pricing turned out to be $2 above even the top of that estimate.
Shake Shack's IPO follows that of Habit, a California-based burger store owner, by a couple of months. It priced at $18 in November, then opened at $30. Eventually, the shares climbed to $44, but lately it's fallen to around $32.
Chris Nichols at Yahoo Finance 4 hrs ago
Chipotle (CMG) investors have gotten used to otherworldly performances from the Denver-based burrito seller, and in a few days they'll find out if they get to gloat once again -- or if they instead get to deal with a rare misstep.
The latter would be stunning, almost certainly leading to a sizable drawdown in the shares, but counting on that to happen might best be left for only the most dedicated contrarians. After the close of trading on Tuesday, fourth-quarter earnings are due, and this time, analysts are planning on a profit of $3.79 a share, up from $2.53 in the same quarter last year. Revenue should advance to $1.07 billion, compared with $844.1 million previously. Same-store sales, which have been absurdly strong in recent quarters, are estimated to climb 16.2% after a 9.3% increase a year ago.
The only surprise with next week's quarterly earnings will be if it doesn't keep winning.
Chris Nichols at Yahoo Finance 20 hrs ago
Shake Shack, the New York-based burger seller that's part of the "better burger" movement, had a strong pricing for its initial public offering late Thursday, the latest indication of considerable investor interest for the stock.
The firm sold 5 million shares at $21 each. Shake Shack may place an additional 750,000 shares by way of an over-allotment. That would point to an aggregate offering of $121 million. The offering price indicates a market value of more than $700 million, based on the fully diluted share count the company has described in regulatory filings.
Shake Shack, founded by restaurateur Danny Meyer, had initially said it would probably sell shares between $14 and $16, but this week the anticipated price was raised to $17 to $19. The pricing above even that increased estimate means substantial demand on Wall Street.
The stock will begin trading Friday under the symbol SHAK on the New York Stock Exchange.
Chris Nichols at Yahoo Finance 23 hrs ago
The announced departure of Don Thompson as McDonald's (MCD) CEO was having an astonishing effect on the restaurant operator's stock -- specifically, giving it the best gain it's had in years.
In recent trading, shares were surging 4.8% to $93.07, a gain of the degree McDonald's, with its $90 billion market cap, rarely sees in a single day. According to FactSet data, the last time it was better was in October 2008.
What it implies is that Wall Street viewed Thompson's management as the main issue holding back the shares and sales growth, both of which were essentially flat the last couple of years. With Steve Easterbrook now set to start as CEO March 1, McDonald's gets another chance to return to the tremendous growth it had between 2003 and 2012. In that span, the stock price went up about 10-fold, and system-wide sales doubled. Then 2012 arrived, a year that included Thompson beginning as CEO, and the days of greatness slowly came to a halt.
Chris Nichols at Yahoo Finance 1 day 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.
Chris Nichols at Yahoo Finance 2 days 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.
The shares of Shake Shack will list on the New York Stock Exchange. The planned symbol is SHAK.
Chris Nichols at Yahoo Finance 3 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.
Chris Nichols at Yahoo Finance 7 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.
Not the best start
Chris Nichols at Yahoo Finance 7 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.
Chris Nichols at Yahoo Finance 8 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