Posts by Chris Nichols
Whether the client is an office with a few employees or a giant business with thousands, Seamless believes it has the answer to its lunch-and-dinner delivery needs. If asked, it will go very large.
"Last year, our single largest order was $13,000," says Nick Worswick, the general manager of corporate accounts at Seamless. That's a considerable meal. And it was delivered.
Eating at your desk, eating in a conference room or eating in the car is becoming an increasingly popular American pastime. Easy delivery is partly fueling this, helped by the Internet, and it's not just the national pizza makers. Starbucks (SBUX) is going the delivery route. Whole Foods (WFM) is doing the same. The quest for ultimate dining and beverage convenience doesn't end.
For Darden Restaurants (DRI), its latest earnings report had a good deal of good news -- enough to take the stock to another all-time high.
What it also had was an area that still needs work, an area that will be important to how the company and its shares fare in the months and years ahead: The continuing weakness in customer traffic at established Olive Garden restaurants, Darden's largest brand.
In the last 40 months back to November 2011, year-over-year monthly customer traffic has been positive only nine times. It's been so once in the past year. Pricing, meanwhile, has been up every month year over year, at an average pace of 1.8%. "Menu mix," which along with price changes and guest counts combine to create total same-store sales, has been inconsistent, though the trend there is going in the right direction. Five of the last seven months are up, including the last three. What that indicates is that the diners who do visit Olive Garden aren't only paying up because the restaurant has raised prices, but that they are choosing items that cost more.
When Brad Lamensdorf talks about Chipotle (CMG), the company, he'll discuss how management has gotten much right. When he talks about Chipotle, the stock, that's another matter.
On the stock, he's not at all positive, not at its current levels. As a result, an ETF he manages, the AdvisorShares Ranger Equity Bear, (HDGE) has a short position in the Denver-based burrito maker. Doing so worked out previously for the fund back in the spring of 2012, when the stock was around $365. Shares of Chipotle stumbled on earnings worries, and Lamensdorf covered with the stock at about $300.
Since then, betting against Chipotle has been a money-loser for the most part. The shares did fall 11.9% that year, but in 2013 rose 79.1% and in 2014 another 28.5%, according to FactSet. Lately, Lamensdorf grew interested again, shorting the stock at $672.
"The more they expand, the more they create kind of a problem for themselves," Lamensdorf says.
It's been a rough week for newly public burger chains, as players from the East and West Coasts have seen their shares pummeled on the heels of earnings reports.
This time around, it was Shake Shack (SHAK), one of the buzziest names in restaurants and a stock that has only traded far, far past its initial public offering price. Still, for the second day in a row, the results were met with selling. Shake Shack had risen 2.5% to $46.90 in regular trading, but it fell 6.2% to $44 after the numbers were released.
Shake Shack said revenue for the fourth quarter rose 51.5% to $34.8 million, while same-store sales were up 7.2%. The company lost 5 cents a share, although that included 4 cents of IPO costs -- without which the adjusted loss would be 1 cent a share. Generally, those results didn't seem concerning, as analysts were forecasting a loss of 2 cents a share and sales of $33.1 million, according to FactSet. Same-store sales were seen climbing 4%, Consensus Metrix estimates said.
It's quite a week for the better burger. Two new stocks in the premium hamburger group are reporting their first earnings results as public companies, and the first of those, Habit Restaurants (HABT), did so Tuesday.
When it did, the fourth-quarter numbers surpassed Wall Street's outlook -- although the view for 2015 appeared to be not enough for traders, as shares fell in the late session. Habit's stock rose in regular trading to close at $35.55, but after the report, it fell 6.2% to $33.34.
The California-based burger seller, which began trading last November, said revenue for the quarter was $48.4 million, up from $35.5 million in the prior year (which included an additional week), while same-store sales climbed 13.2%. Habit earned 2 cents a share. According to FactSet, analysts were planning on Habit to break even on a per-share basis, with sales of $44.4 million. Same-store sales were estimated at a 7.8% increase. For the year, revenue increased 45.1% to $174.6 million.
McDonald's (MCD) reported a horrific sales month for February, especially in the U.S., where same-store sales slumped 4%, a far-worse result than analysts had estimated.
Overall, global comparable sales fell 1.7%. The Asia-Pacific, Middle East and Africa again was weak, with sales down 4.4%, as recent news in Japan about foreign items in food continued to keep customers away. Europe was brighter, standing as the only major region with a positive number. There, same-store sales were up 0.7%.
The report was the first of its type under new CEO Steve Easterbrook. However, he started his new position only on March 1, and it will be some time before he's viewed as truly owning the monthly reports. His first week did include attending a gathering with franchisees and major news on a planned change around the chicken McDonald's sells, but the latest data make clear the challenges in front of the world's largest publicly traded restaurant operator.
Drive-in hamburger restaurant Sonic (SONC) was trading at its latest record price Monday, bringing its gain for 2015 to 23% and its increase in the past 52 weeks to 65%, after it reported a jump in sales at company-owned and franchised locations in the most recent quarter.
Recently, shares of Oklahoma City-based Sonic were up 5.3% to $33.47. The session high -- and now best ever -- was $33.93. The latest step up followed news that system-wide same-store sales for the second quarter ended Feb. 28 rose about 11.5%. Same-store sales were higher by 11.3% at company drive-ins and 11.5% at franchises, the latter of which are about 89% of the 3,500-store system.
Though the majority of Sonic's main valuation measures are above their five-year averages, according to FactSet, any concerns about its trading levels haven't prevented the stock from climbing to a series of all-time highs in a rally that's now in its fourth year. The compound annual growth rate was 59.4% from the close of 2011 through the end of 2014.
McDonald's (MCD) takes plenty of criticism, and there's certainly no shortage of advice on how to return the Golden Arches to its days of glory.
All it has to get the detractors and pundits to move along is the following: Serve better-for-you food that won't lead to obesity; do so cheaply and very quickly at 36,000 sparkling and modern global restaurants; offer plenty of menu choices, but not too many choices; pay workers a sound wage; buy goods at a fair price from suppliers who don't use hormones or antibiotics or rely on genetic modification; keep profit margins climbing for franchises and company-owned stores; ensure the dividend continues to get raised every year; and grow the stock price and profits annually for investors.
If only every company had it that good, right?
7. Make sure stores are clean and modern. Some are old, while others are brand new. The updates are ongoing, though theoretically the pace can be picked up.
McDonald's (MCD) stock had an unusually strong session Wednesday -- but it wasn't immediately clear what sparked the run.
The shares closed up 3.9% at $98.66, and at its high for the day of $99.31, the stock had risen 4.6% from Tuesday. Volume was considerably higher than normal as well, with almost 16 million shares traded. On an average day, 7.2 million McDonald's shares trade hands, according to Yahoo Finance data. At the same time, CNBC's Dominic Chu, commenting on Twitter, noted heavy volume in McDonald's call options, a bet the stock will advance.
The only obvious news in fact wasn't particularly positive -- that activists want European regulators to investigate the manner in which Oak Brook, Ill.-based McDonald's pays its taxes.
McDonald's hasn't yet responded to a request for comment. However, companies often have a policy or preference not to discuss stock-price movements.
Better ingredients, better pizza -- great. Now maybe better earnings?
With its stock trading at a record high, at a valuation matching its peak of at least the last five years, Papa John's (PZZA) wasn't in any position for a misstep before its fourth-quarter earnings release. And a misstep arrived.
Granted, it wasn't a tremendous one at all, but the fact that management offered a somewhat slower-than-anticipated profit growth outlook for 2015 was enough to edge the shares downward Wednesday. Again, this really is a matter of good or very good projections, so it's entirely possible the "shortfall" will be forgotten soon enough. If the market keeps rallying, consumer discretionary stocks keep jumping and restaurants keep rising, Papa John's may well keep climbing.
Now we have to see if that's enough to convince investors, after today, to resume elevating the shares.