McDonald's Corp

The US has witnessed the emergence of a number of regional carriers such as OnTrac and Eastern Connection, which are providing cheaper, faster delivery options.

According to Starbucks (SBUX) management, the company’s My Starbucks Reward program helps increase customer loyalty.

Agricultural and livestock commodities such as corn, coffee, beef, pork, chicken, and cheese play an important role in the restaurant business, as demand and supply factors impact prices.

A tight labor market with low unemployment and participation rates puts pressure on restaurant companies to raise wages to retain their employees.

There’s strong acceptance of the Starbucks loyalty program in China, with 40% of transactions completed using the Starbucks card.

The Americas and the CAP (China, Asia-Pacific) segments have been the biggest contributors toward Starbucks global comps growth.

Over the past 12 months, the restaurant industry has experienced significant sales growth. In this series, we’ll look at certain indicators that investors in this sector should track.

According to a study by researchers at John Hopkins University, the arsenic in served chicken isn’t healthy. It could increase consumers’ cancer risk.

Magnetar Capital added new stake in Restaurant Brands International (QSR) in 4Q14. The position represented 0.73% of its holdings at the end of the year.

While the absolute minimum wage has increased, when adjusted for inflation in 2015, its purchasing power has declined.

Magnetar Capital was established in 2005 by Alec Litowitz and Ross Laser. Currently, the hedge fund manages assets in excess of $12 billion.

Dunkin’ Brands is now expanding into the afternoon daypart in order to win customers in a different daypart and improve sales leverage.

The master franchise agreement gives the master franchisee operating rights to a supply chain in a given international region.

Dunikin’ is embracing technology with a phone app that allows you to search Dunkin’ Donuts locations, see nutritional information, and gift Dunkin’ treats.

Dunkin’ Brands’ (DNKN) sources of revenue include franchise revenue, sale of ice cream products, company-owned sales, rental income, and other income.

Brinker incurs key costs of operations to run its company-owned restaurants, including cost of sales, labor and related costs, and rent and other costs.

As of December 2013, Dunkin’ Brands had 5,736 points of distribution (or POD). In its International Development Plan, it plans to expand that to 9,500.

Dunkin’ Donuts is Dunkin’ Brands’ most important brand, with 77% of the revenue or $568 million in 2014. Of this, $548 million was from the US market.

Domino’s plans to have all its stores remodelled according to the Pizza Theater design by the end of fiscal 2017.

Dunkin’ Donuts’ combined revenue from national as well as international units was $569 million in 2014. Of that, $548 million came from the US market alone.

From 2011 to 2012, Wendy’s (WEN) started its Image Activation program. It’s a program to remodel restaurants. It plans to remodel almost 1,331 restaurants.

Wendy’s franchise agreements are only renewable after ten years. Wendy’s rental income from franchisees grew from $27 million in 2013 to $68 million in 2014.

Wendy’s performance has been based on the economy, consumers’ preferences, and spending patterns in the US. International expansion will have its own complexities.

QSCC (Quality Supply Chain Co-op, Inc.) is an independent non-profit organization that’s responsible for the Wendy’s (WEN) supply chain management.

Because Domino’s Pizza sells dough and ingredients to its own franchises, the company derives dual benefits from the supply chain segment.

Supply chain segment In terms of revenue, the supply chain is Domino’s Pizza’s (DPZ) most important segment. In fiscal 2014, it contributed 63%, or $1.26 billion, toward the company’s total revenue. Domino’s international master franchises have the right to operate a supply chain in their respective regions. The facilities The supply chain segment consists of the […]

Of its three main business segments, Domino’s Pizza earns least revenue from its company-owned stores.

Domino’s Pizza had a 13% market share of the quick service restaurant industry in the US as of December 2014.

Activist investor Starboard Value opposed Red Lobster’s sale, stating that Darden management could do more to turn the undervalued brand around.

Chili’s is the most important restaurant under the Brinker (EAT) umbrella. Chili’s contributed 86%, or $2,443 million, to the company’s sales in 2014.

LongHorn Steakhouse’s same-store sales increased to 2.7% in 2014 year-over-year from 1.2% in 2013. This is lower compared to fiscal 2012 and fiscal 2011.

As of fiscal 2014, revenue from Specialty Restaurant Group was $1,230 million, or 19.5% of the total revenue for Darden Restaurants.

The restaurant industry is part of the consumer discretionary sector. This sector does well when the economy is expanding.

Traffic is the increase in the number of customers that visit the stores and make a transaction or purchase. Panera Bread’s traffic grew 1.3%.

The unemployment rate for December 2014 was 5.6%, showing a month-over-month decrease from 5.8% in November.

The Starbucks China and Asia-Pacific segment grew 85% to $495 million, up from $266 million year-over-year.

Domestic means all of the restaurants in Shake Shack’s domestic market—the US. Revenue from this segment was $78.5 million in 2013.

Shake Shack (SHAK) calculates its AUV (average unit volume) by dividing the total company-operated sales by the total company-operated units.

We’ve looked at Shake Shack’s (SHAK) revenues and drivers. It’s also important to understand how the company has been managing its key costs.

We’ll look at Shake Shack’s profitability in terms of its operating and net profit margins. In 2013, it had an operating profit of $5.9 million.

By opening Teavana Fine Teas and Tea Bars, Starbucks has shown how it’s focused on generating revenues from relevant products.

Starbucks’s EBITDA is lowest in second quarters, which shows the seasonality of the business. Adverse weather conditions can also affect EBITDA.

The following are Starbucks’s geographic segments: Americas; China and Asia Pacific; and Europe, the Middle East, and Africa.

Consumer confidence in the United States is at an all-time high in seven years, and people are spending more on food prepared outside the home.

Now, we’ll discuss SBUX’s stock performance over the past few years. SBUX returned $9,037 on $1,000 invested on January 1, 2009. The fourth quarter earnings announcement is approaching.

SBUX’s net income and net profit margins have been on an uptrend since 2010. At the end of fiscal year 2014, SBUX’s adjusted net income was $2.05 billion.

At the end of fiscal year 2014, SBUX’s operating income was $3.1 billion. Its operating profit margins increased to 19% in 2014—compared to 17% in 2013.

SBUX wants to grow sales. It’s also important to manage the operating costs. In this part of the series, we’ll take a look at four key operating costs.

SBUX is also expanding its offerings in different dayparts. The expanded offerings cater to a wider customer base. They increase the wallet share.

Once the card is registered on the Starbucks (SBUX) website, the data is available on other ecosystems—for example, a mobile app. It helps a customer keep track of rewards.