Posts by Chris Nichols
- Chris Nichols at Yahoo Finance18 hrs ago
The latest earnings report from Panera Bread (PNRA) didn't impress investors at all. Understandably so.
Compared with Wall Street's estimates, the numbers certainly weren't favorable. Various costs are problematic, and for the third consecutive quarter, the St. Louis-based bakery operator lowered its full-year outlook. Shares dropped 5.6% in response to $165.42. A day later, on Thursday, the stock was down another 1.8% to $162.43.
Yet there's good news here, a reason, if it holds, to consider that Panera may be at the beginning of an important reversal. And it's this: For the second quarter in a row, same-store transactions have been positive at company-owned restaurants, which make up almost half of the 1,845-store system. This time, they were up 1.4% and, with a 0.7% increase in the average check, led to a 2.1% climb in company-owned comparable sales.
- Chris Nichols at Yahoo Finance2 days ago
Buffalo Wild Wings (BWLD) was having its best post-earnings trading day since the fourth quarter of 2011 after topping estimates and offering an outlook that, even amid rising wing prices, had Wall Street buying.
In recent trading, the Minneapolis-based sports bar owner was gaining 12.5% to $150.53, an advance that turned the stock positive for the year. Prior to the third-quarter earnings that were released after Monday's close, Buffalo Wild Wings was down 9% in 2014. Short covering probably was part of the increase, as Yahoo Finance data indicate nearly 14% of the stock's float is sold short.
Regardless, the climb was a significant turnaround from the second quarter, when traders sold the stock down 13.1% owing to worries over the cost of wings and restaurant staffing. Although wing prices are currently at $1.98 a pound, up 30% from the average cost in the third quarter, Buffalo Wild Wings is hopeful that a pending 3% menu price increase will mitigate both that and higher minimum wages being implemented in some states.
- Chris Nichols at Yahoo Finance3 days ago
McDonald's (MCD) guests are disappearing. Not all at once obviously, but it is undeniably happening. And that is the core problem McDonald's has to solve.
The numbers make it clear that the consistent growth in the number of transactions at McDonald's stores, a regular occurrence for years, is no more. The first chart below goes back to 2009, but for half a decade prior to that, McDonald's recorded positive changes in year-over-year traffic numbers. That ended in 2013, when guest counts fell 1.9%. At each interval this year -- the end of the first quarter, the halfway point and after nine months -- the decline has continued.
Comparable guest counts factor in all restaurants, whether owned by the company or by franchisees. The latter are the majority of the McDonald's system.
- Chris Nichols at Yahoo Finance8 days ago
Set aside for a moment the quarterly numbers for two well-known restaurant chains, McDonald's (MCD) and Chipotle (CMG). What immediately stands out when you do is the tone, and it speaks to what is becoming, ever more clearly, an undeniable shift in our dining-out habits. For Oak Brook, Ill.-based McDonald's, home of the Big Mac and fries, that tone is one of desperation, nearing despair. At Denver's Chipotle, the burrito seller that's emerged as the leader of the growing fast-casual restaurant segment, it's hope and optimism, bordering on arrogance. Comments from McDonald's CEO Don Thompson noted that his company's results "reflect a significant decline versus a year ago, with our business and financial performance pressured by a variety of factors." While reminding us all of the Golden Arches' "enduring brand and strong financial foundation," he states that "by all measures our performance fell short of our expectations." Further, McDonald's is forced to try and show the world "that we understand the problems we face and are taking decisive action to fundamentally change the way we approach our business." This is the planet's largest publicly traded restaurant chain. At Chipotle, founder and co-CEO Steve Ells continued to send the message that his company is determined to change the way people think about fast food, an approach that "results in better quality food and a compelling dining experience for our customers, and superior business results for our shareholders. The way we source, prepare and serve our food; the way we hire, develop and empower our people; and the way we operate our business is very different than the traditional fast food model. Industry trends, he says, "suggest the Chipotle model is resonating with customers, who are realizing there are better alternatives to traditional fast food." This is from a two-decade-old 1,700-store operator that was at one time majority-controlled by McDonald's. A tale of two fast-food chains At McDonald's, revenue and same-store sales, a widely watched retail measure, were worse than analysts estimated, falling 3.3%. Customer traffic is negative, a deeply disturbing trend, probably in part because of price hikes. At Chipotle, comparable sales were stronger than had been anticipated, jumping 19.8%. Traffic is climbing, even as prices have risen. People can't stay away. Both companies were profitable in their most recent quarters, but whereas McDonald's was essentially flat with last year (leaving out a variety of items), growth at Chipotle was tremendous, far outpacing the 44% earnings-per-share increase that was projected. It's not a direct comparison. The brands and business models are different, the food isn't the same, the size isn't close, one is a growth name and the other is a dividend-paying cash machine. But their results, which continue to go in opposite directions, are demonstrating again and again that the old guard in fast food does have serious trouble at its borders, enough trouble that it may well have gotten to its peak. That's not to say that the story is over for McDonald's. While it's regularly stated
- Chris Nichols at Yahoo Finance13 days ago
When Chipotle (CMG) reports earnings Oct. 20, it will do so amid a level of optimism unlike any seen in at least the past four years -- and if it doesn't deliver, shares may be in for a very long day.
Third-quarter earnings per share at the Denver-based burrito seller are estimated to soar more than 40% from last year, while sales for the more than 1,600-store restaurant operator should climb almost 30%, Wall Street is forecasting. One might imagine this wouldn't be out of the ordinary for a fast-growing company with a winning stock and food-selling formula that keeps drawing adherents, but, in fact, it isn't ordinary at all. Over the last five years, analysts have never called for the amount of year-over-year growth from the chain that they are this time, according to FactSet.
- Chris Nichols at Yahoo Finance16 days ago
As restaurant investors get ready for another earnings season, analysts are calling for year-over-year revenue and earnings gains for most of the largest names, but the biggest of all will surprise Wall Street only if it doesn't post declines. That would be McDonald's (MCD).
It hasn't been the best year for the Oak Brook, Ill., Big Mac and fries seller, which will report its numbers Oct. 21. When it does, analysts are forecasting third-quarter earnings of $1.38 a share, according to FactSet estimates, with revenue of $7.21 billion. Both would be down from last year, when the company earned $1.52 with revenue of $7.32 billion.
Sales have been slowed for some time, and customer counts have been in retreat, even before a summer investigation involving a China supplier led to a revenue drop in Asia. (Still, the shares have been resilient, holding up fairly well and showing a year-to-date loss of only 5.9%. And it even got a record high earlier in 2014 before falling back.)
- Chris Nichols at Yahoo Finance16 days ago
Domino's (DPZ) traded up to an all-time high Tuesday after its quarterly results topped estimates, sending the shares climbing 9%.
Recently, the Ann Arbor, Mich., pizza maker was gaining 9.2% to $82.65. At its peak, the shares were at $82.86, according to Yahoo Finance data.
The advance followed the announcement that earnings for the third quarter were 63 cents a share, 2 cents better than expected, with revenue that rose 10.5% from a year earlier to almost $447 million. That also surpassed estimates, as did same-store sales. Domestic same-store sales climbed 7.7%, while the international division had a comparable-sales increase of 7.1%.
Domino's, the second-largest U.S. pizza seller after Pizza Hut, has reworked its recipes and now has a store-remodeling program that's being implemented. Overall revenue was lifted by higher supply-chain sales and commodity prices, especially cheese, as well as increased equipment and supply sales to stores that are remodeling.
- Chris Nichols at Yahoo Finance17 days ago
McDonald's (MCD) is starting a new effort to convince the world it's selling "real" food, with a social media question-and-answer campaign, supported by videos featuring Grant Imahara, formerly of the show "MythBusters."
Through a campaign called "Our food. Your questions," McDonald's is asking the public to submit questions, and it's offering prepared answers on its website to a series of those that are frequently asked. The McDonald's site today features inquiries it's heard over the years, including: "Is 'pink slime' in a Chicken McNugget?" and "Is the McRib made from real pork?" Another is, "Why doesn't your food rot?" If you're curious about what's in the Big Mac sauce, ingredients include soybean oil and pickle relish. In addition to its site, McDonald's will answer questions on Twitter, Facebook and YouTube.
- Chris Nichols at Yahoo Finance20 days ago
With competition for Americans' dining dollars as fierce as ever, being clearly unique in a crowded market couldn't matter more.
Stephen King, the CEO of the once-again publicly traded Dave & Buster's Entertainment (PLAY), hopes his combination restaurant and game center will provide a formula to enable his Dallas-based company to triple in size from its current base of 70 U.S. and Canadian locations.
"I think that, at this point, differentiation has never been more important," he says. Based on customer surveys, "what is very clear is we are viewed as way more differentiated than any other brand in the casual space. That's what it's going to take going forward."
Dave & Buster's returned to the market Friday following eight years away and rose on its first day. Its intraday high of $18.43 was up 8.4% from its opening trading price. The company, which gets about half of its revenue from its restaurant and bar operations and the other half from its games, had estimated that its initial public offering would price between $16 and $18.
- Chris Nichols at Yahoo Finance21 days ago
Ruby Tuesday (RT) was having one of the best days in its history Thursday as earnings and same-store sales surpassed estimates, sending shares up 18%.
Prior to the report, the stock was down 14.6% for the year. Shares have fallen in two of the last three years as worries about the business have grown. In 2013, Ruby Tuesday was one of the few restaurants to decline in a group that rose an average of 51%. Based on today's results, it seems the casual-dining company's efforts to restructure costs, close stores and change menu items offer some reason for optimism. The stock has now turned positive for the year, recently gaining $1.05 to $6.97.