Posts by Chris Nichols
Chris Nichols at Yahoo Finance 4 days ago
This article has been updated from Nov. 19.
The Habit Restaurants (HABT) opened for trading Thursday with a big first-day gain -- doubling from the IPO pricing level -- making it the latest fast-casual chain to join the market along with recent offerings such as Zoe's Kitchen (ZOES) and El Pollo Loco (LOCO).
Lately, the stock was at $36.11, giving it a whopping 100% bump from the pricing, which occurred Wednesday at $18, and a 20% advance from the $30 opening trade. Habit, an Irvine, Calif.-based company effectively controlled by private equity firm KarpReilly, offered 5 million Class A shares to the public. The pricing was above the anticipated range of $14 to $16 a share, raising proceeds of $90 million before accounting for costs related to the offering.
Potential cost concerns
Chris Nichols at Yahoo Finance 6 days ago
The restaurant stocks, on the whole a losing proposition for most of the year, are very much back.
Although the first three-quarters of 2014 suggested the half-decade rally for the group was ending, a powerful reversal in the last few weeks has made that idea a distant memory. In early October, we wrote this: "Without an astonishing turnaround between now and Dec. 31, a five-year run of wins is about to be over for the restaurant stocks." That astonishing turnaround indeed has happened.
By doing so, it provides further evidence that: First, the business press, as often is already said, has a tremendous ability to state precisely the opposite of what is about to happen in the market. Two, it's futile to offer forward-looking projections based on securities whose prices change multiple times daily. Three, past performance is no guarantee of future results, as so many mutual fund documents smartly declare.
Chris Nichols at Yahoo Finance 11 days ago
Popeyes Louisiana Kitchen (PLKI), which has set multiple all-time trading highs in 2014, did so again Thursday, this time after the chicken seller posted an astonishing quarterly increase in same-store sales and raised its forecast for the year.
The stock has now surpassed Wall Street's average pre-earnings price goal of $50.83, taking its year-to-date gain to 34.4%. Earlier in the session it traded as high as $52.76. Recently, it was adding 7.6% to $52.15.
The latest surge followed the Atlanta-based restaurant chain's announcement that it earned 42 cents a share in the third quarter, 1 cent ahead of estimates, on revenue of $54.9 million, up around 11% from the same period a year earlier. The top line was $400,000 under the consensus forecast, but that was largely irrelevant to traders who focused on same-store sales growth of 7.3%, far beyond the 2.4% analysts' view, as well as on the improved outlook.
Chris Nichols at Yahoo Finance 13 days ago
In the month since all the directors of Darden Restaurants (DRI) were replaced by Starboard Value's activist offensive, shareholders have gotten quite a gift -- a stock up 12.3% from the day the board results were announced through Monday's close.
The Orlando, Fla.-based owner of Olive Garden and The Capital Grille was up again Tuesday, this time by 2.1% to $55.47 after an upgrade from KeyBanc that took the stock to buy from hold. As reported in Barron's, the firm's analysts "do not believe a national restaurant chain that serves 5,000 guests/store-week is 'broken,' but was poorly managed by the previous CEO and COO." They also say the remake of Olive Garden that has already begun "can be aligned with the activist's vision and deliver improving sales."
Chris Nichols at Yahoo Finance 14 days ago
Pizza Hut, the largest U.S. pizza chain, is setting out on a major makeover that will add a host of new specialty pizzas, sauces and crust flavors to its menu, while at the same time updating its logos, uniforms and website functionality, in a bid to reboot its growth and capitalize on a burgeoning trend toward artisan, fast-casual pizza in America.
The menu at 6,300-plus domestic stores will expand to offer 10 optional crust flavor toppings, half a dozen sauces, five new ingredients, including Peruvian cherry peppers, salami and fresh spinach, and a variety of "drizzle" sauces, such as balsamic and barbecue.
Crust flavorings will include salted pretzel, toasted cheddar and a curry variety. Crushed tomato, garlic parmesan and buffalo-flavored will be among the available sauces. In terms of specialty pizza recipes, there are 11 of those, with names like Old-Fashioned Meatbrawl, Sweet Sriracha Dynamite, Garden Party and Barbeque Bacon Cheeseburger, along with five lower-calorie "Skinny Slice" pizzas that are said to have no more than 250 calories per piece. The new menu items will be available nationwide starting Nov. 19.
Chris Nichols at Yahoo Finance 18 days ago
For Whole Foods (WFM), a better-than-estimated quarterly profit, a not-bad outlook, and traders were all in.
Shares were soaring 11% Thursday to $44.34 as Wall Street cheered the fact that the natural-foods grocer, in fact, does remain well-placed with a dedicated core customer, that it's a company that, after more than three decades in business, isn't completely ignoring competitive pressure -- even as analysts in recent months essentially had taken to asking co-CEOs John Mackey and Walter Robb if they'd ever even heard of Kroger (KR) and Sprouts (SFM).
Indeed, Whole Foods looks like a winner. Today's celebration followed a fiscal fourth quarter in which the company earned 35 cents a share, topping estimates, on sales of $3.26 billion. That meant that after four consecutive quarters in which it lowered its 2014 sales growth forecast, and five straight post-earnings declines for the stock, shares that were down 30% since Dec. 31 had received new hope.
Chris Nichols at Yahoo Finance 19 days ago
Restaurant operator Chuy's Holdings (CHUY) was losing almost 30% of its market value Wednesday after missing Wall Street's profit estimates for the third quarter in a row, lowering its earnings guidance for the year once again and detailing higher food costs than it had been planning on.
In recent trading, the Austin, Texas-based full-service, Tex-Mex-style chain was plunging 29% to $21.45 on volume that was more than 10 times the average. It was the second-worst stock on the Nasdaq, and in Chuy's history back to mid-2012, it's never had a decline of this magnitude -- its prior largest decline in a single day was a 7.7% loss in July.
The 59-store company earned 19 cents a share for the third quarter on revenue of $64.1 million, both of which were below estimates. According to FactSet, analysts were anticipating a profit of 20 cents and revenue of $64.3 million. Same-store sales, up 3%, did surpass the estimate of 1.9% on a combination of higher traffic and an increase in the average check, but the bad news was where investors were focused.
Chris Nichols at Yahoo Finance 20 days ago
That's not to say the Internet era is being ignored -- quite the opposite. With an online option that's been rolled out in recent years, participants can still play on the web for several more days, until Nov. 10 this year, even though the in-store game ended Oct. 27 (the game started on Sept. 30). For 2014, the 22nd edition saw about 1 billion game pieces distributed in U.S. stores that were peeled off soda cups, fries and other items sold in McDonald's restaurants.
From its start in 1987 until the present day, Monopoly has been a regular presence at the Golden Arches, now serving as an annual event for its 14,000 domestic stores and standing as its oldest ongoing promotion. The prizes of course have changed. This year, for instance, is the first time the game includes chances to meet pro athletes LeBron James, Patrick Kane, Alex Morgan and Jamie McMurray.
Chris Nichols at Yahoo Finance 21 days ago
Updated Nov. 3 Last week, McDonald's (MCD) denied a report, and the extensive, not-exactly-supportive Internet commentary that followed, that it was planning a new advertising campaign based around the phrase "Lovin' Beats Hatin'." But there appears to be some truth to it. While the company seemingly isn't planning on that specific phrase, it might roll out very similar language for marketing or potentially some other use in the future. The site BurgerBusiness noted over the weekend that McDonald's has filed for trademarks on both "Lovin' > Hatin'" and "Lovin' Is Greater Than Hatin'." These can indeed be found on the website of the U.S. Patent and Trademark Office, with McDonald's listed as the filing company. The Wall Street Journal, citing unnamed sources who had knowledge of the situation, had written that McDonald's was only months away from launching ads with the Lovin' Beats Hatin' slogan, joining the familiar "I'm Lovin' It" line that the company has employed for the past few years. The report said the world's largest restaurant chain measured by annual system revenue, at almost $90 billion, would be attempting to "spread happiness in the face of Internet hate" starting Jan. 1 and would also feature a Super Bowl ad. The Journal's reporting work led to ample follow-ups -- satire site The Onion got in on the action. However, a McDonald's spokeswoman said there were no such plans to use this particular message. "Lovin' Beats Hatin' (is) incorrect and not a new slogan," Lisa McComb, director of McDonald's media relations, said in an email. Additionally, there were no proposals to use the phrase even informally, such as on social media platforms. McComb said the phrase was never contemplated internally and that the company wouldn't be inclined to "make decisions based on speculative commentary on creative that hasn't been seen." Again though, the questions had been about "Lovin' Beats Hatin'," specifically, rather than language similar to that.
Chris Nichols at Yahoo Finance 25 days 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.