PowerShares Dynamic Food & Beverage ETF
Opportunities and risks that Dunkin’ Brands investors must know
It’s no big secret that Dunkin’ Donuts has the highest relative leverage in the industry. Leverage comes with a number of risks— a substantial risk is the interest paid on debt.
Understanding Starbucks’ cost structure and operating expenses
Starbucks’ main cost driver is its price per pound of coffee beans. The two most consumed coffee beans are Arabica and Robusta blends.
Analyzing the Expectations for Cal-Maine Foods in Fiscal 3Q16
Cal-Maine Foods will report its fiscal 3Q16 results on March 28. Cal-Maine’s stock has gained 2% since its last quarter earnings release on December 23, 2015.
What Diamond Foods’ Segments Contributed in Fiscal 1Q16
Diamond Foods operates in two segments that are the Snack segment and the Nut segment. The latter consists of the Emerald and Diamond of California brands.
Cal-Maine Foods: Revenue and Income Rose in Fiscal 2Q16
On December 23, 2015, Cal-Maine Foods (CALM) reported its fiscal 2Q16 earnings for the quarter ended November 28, 2015. After the report, CALM stock rose by 1.7% to close at $49.59 per share on December 23.
Must-know: Investors’ reactions to Wendy’s earnings
Share volume was ~14.4 million shares, compared to the 50-day average daily volume of ~4.7 million, according to NASDAQ. Wendy’s closed 2.2%, up at $8.16. Wall Street analyst consensus estimated an adjusted earnings per share (or EPS) of $0.09.
Why high valuation and coffee prices drove Starbucks down ~13%
As store count grew over the past few years, Starbucks’ forward P/E valuation metric also expanded. What used to be just 17x gradually grew to roughly 27x, a 58% based solely on expansion in the valuations.
Analyzing the Ratings and Recommendations for Hain Celestial
After Hain Celestial’s announcement on August 15 regarding the delay in its results, many firms updated their ratings and recommendations for the stock.
McDonald’s Global Presence and the Three-Legged Stool
McDonald’s, the world’s largest fast food chain, has over 38,000 restaurants across 120 countries. In 2018, it had approximately $21.0 billion in sales.
Why Dunkin’ Brands is a unique player in a maturing industry
Dunkin’ Donuts’ main competitor on the coffee sales front is Starbucks, which sells coffee from its company-owned fleet of retail locations.
Must-Know: McDonald’s Has Got Tough Competition
McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.
Investing in Restaurant Stocks: Tailwinds and Challenges
You could consider investing in restaurant stocks, given the solid fundamentals in the sector and the macroeconomic tailwinds favoring the industry.
Starbucks revenues: Why customers are willing to pay a premium
Starbucks’ revenue mix is weighted in favor of beverages. This should come as no shock, considering the firm’s roots trace back to a single coffee shop at Pike’s Place Market in Seattle.
Must-know: Chipotle Mexican Grill’s 3 key risks
Chipotle Mexican Grill (CMG) is exposed to three primary risks: price risk, interest rate risk, and currency risk.
Key restaurant industry formats: The casual dining business
Contrary to fast food restaurants, casual dining restaurants have a relaxed and casual ambiance with a lot of seating. They offer full table service and may also have a wine menu or full bar service.
Mondelēz’s Stock: Why Do Most Analysts Rate It a ‘Buy’?
Current recommendations As of January 30, 15 of 20 analysts covering Mondelēz International’s stock had a “buy” rating. Five analysts had a “hold” recommendation, and there were no “sell” recommendations. On January 5, 2017, Berenberg Bank initiated coverage on Mondelēz International’s stock with a “buy” rating and a price target of $51. Consensus “buy” rating […]
How McDonald’s Wages and Major Costs Stack Up
McDonald’s performance is sensitive to any changes in price levels—be it food, labor, or rent. So how much does it cost for McDonald’s to generate revenue?
What Caused Bunge’s Legal Action against Egypt’s Grain Buyer?
Bunge (BG) has a market capitalization of $8.1 billion. BG fell by 2.8% to close at $56.75 per share as of February 9, 2016.
A Close Look at B&G Foods’ Operating Margins in Fiscal 4Q15
B&G Foods (BGS) reported that operating margin for fiscal 4Q15 rose to 14.2% compared to 12.7% in 4Q14. Operating margin for fiscal 2015 was 17.8% compared to 13.6% in 2014.
Must-know: Wendy’s forward-looking guidance
Management expects to reduce ~$8 million in general and administrative costs (or G&A) in the first quarter of 2015. The adjusted earnings before interest, taxes, depreciation, and amortization (or EBITDA) is expected to be further reduced by $5 million in 2015.
Why Boston Beer Company is playing the Japanese car strategy card
Investors shouldn’t only expect Boston Beer Company’s sales growth of approximately 17% to translate into equal growth in earnings.
McDonald’s Supply Chain: A Must-Know for Investors
With over 38,000 restaurants, McDonald’s doesn’t make any of its products. Instead, it contracts with suppliers to meet its massive requirements.
Why it’s important to understand Noodles and Co.
Noodles & Company (or NDLS) was founded in 1995. It’s a fast-casual restaurant chain that serves classic noodle and pasta dishes.
What is the outlook for the restaurant industry?
In August, the Restaurant Performance Index stood at 101.9, an increase of 1% from July, which was its first gain in three months.
McDonald’s Menu Struggles to Shed Its Junk Food Rep
Despite health-related controversies, fast food companies such as McDonald’s maintain that they provide consumers with choice and convenience.
Must-know: Chipotle Mexican Grill’s testing the catering business
Chipotle Mexican Grill (CMG) launched its catering service, which is intended to increase the overall sales and improve operating leverage. Restaurants have been looking to increase the operating leverage by boosting sales during nonpeak hours.
Why Chipotle Mexican Grill’s quarterly same-store sales spiked
Chipotle Mexican Grill’s (CMG) same-store sales increased by 17.3% year-over-year in the second quarter. The increase in same-store sales also resulted in average sales per restaurant of $2.3 million.
Boston Beer Company: An introduction to better beer business
Boston Beer Company Inc. (SAM) is the largest craft brewer in the United States, having sold ~2.7 million barrels of proprietary core brand products.
What Analysts Think of Sprouts Farmers Market
There were no recommendation changes from Wall Street analysts on Sprouts Farmers Market (SFM) after its 4Q17 results.
SFM’s Management Looks for More than a 20% Earnings Jump in 2018
After delivering a 15% year-over-year rise in 2017, Sprouts’ management now expects an 11.5%–12.5% YoY rise in its 2018 net sales.
Sprouts Farmers Market Largely in Line with Expectations in 4Q17
Phoenix, Arizona-based Sprouts Farmers Market (SFM) reported its 4Q17 results February 22, 2018.
Sprouts Farmers Market: 4Q17 Earnings Preview
Sprouts Farmers Market is scheduled to release its 4Q17 results on February 22, 2018, for the three months ending on December 31, 2017.
What Rising Consumer Goods and Material Orders Signal
Manufacturers’ new orders for consumer goods and materials New orders for consumer goods and materials give investors an insight into the demand for goods and form an important constituent of the Conference Board LEI (Leading Economic Index). Changes to demand in the consumer goods sector impact the performance of FMCG (fast moving consumer goods) companies, which include large retailers such […]
How Many Americans Quit Their Jobs in August?
As per the latest JOLTS report, about 2.1 million Americans quit their jobs voluntarily in August, which was a decrease of 70,000 from the previous reading.
Sprouts Farmers Market’s 2Q17 Earnings Rose 16%
SFM’s top line is expected to grow 13%–14% based on its sales comp growth of 1.5%–2.0% and 32 new store openings.
Sprouts Farmers Market’s 2Q17 Earnings Beat: Top, Bottom Lines Up
Phoenix, Arizona–based Sprouts Farmers Market (SFM) reported its 2Q17 results on August 3. Total sales for SFM increased 15% year-over-year to $1.2 billion, $17.0 million more than consensus estimates.
What’s Eating Kroger’s Sales Comps?
Kroger (KR) has done reasonably well lately, having survived an intensely competitive retailing environment over the past few years.
What Impacted Constellation Brands’ 4Q Wine and Spirits Sales?
In the full-year fiscal 2017, Constellation Brands’ Wine and Spirits segment’s sales rose 6.0% to $3.1 billion.
Why Has Mondelēz International Been Rising for Two Months?
Mondelēz International’s (MDLZ) stock rose 3.6% to $44.32 per share on October 26, 2016, after the announcement of the company’s 3Q16 results.
With Phenomenex, Danaher Has an Attractive Consumables Asset
On October 12, Danaher announced its an agreement to acquire Phenomenex, a privately held manufacturer of separation and purification consumables.
Pall Acquisition Gave Birth to Danaher’s Filtration Business
Danaher’s filtration business came into existence through the acquisition of Pall in 2015.
What Benefited Tyson Foods’ Performance in 2Q16?
Tyson reported its financial results for fiscal 2Q16 on May 9. Earnings continued the positive growth trend in the second quarter.
Archer Daniels Midland’s Valuation before Its 2Q16 Earnings
Archer Daniels Midland is trading at a higher PE multiple of 15.3x over its forward 12-month EPS—compared to Bunge as of July 25, 2016.
What Challenged Archer Daniels Midland’s Results in 1Q16?
Archer Daniels Midland didn’t have a great start to 2016. Earnings fell 45% YoY in the first quarter. The adjusted EPS came in around $0.42 for the first quarter.
How Did Cal-Maine’s Specialty Egg Business Perform in 4Q16?
Cal-Maine Foods (CALM) is strategizing to pursue additional opportunities to market and sell specialty eggs due to changing consumer demand trends.
Ingredion’s Valuation Multiple ahead of 2Q16 Earnings
A forward PE valuation multiple indicates how much an investor is willing to pay over the company’s EPS for the next four quarters. Ingredion’s valuation rose 13% since fiscal 1Q16.
What Will Hurt Mead Johnson’s 2Q16 Revenue?
Analysts are expecting Mead Johnson’s revenue to be $964 million for 2Q16. That’s a fall of 7% compared to 2Q15 revenues of $1.0 billion.
Did Oreo Cookies, Trident Gum Sales Boost Mondelez’s 2Q Earnings?
Mondelez International (MDLZ), maker of Cadbury chocolates and Oreo cookies, is all set to report its fiscal 2Q16 earnings results on July 27 before the market opens.
Why Are So Many Analysts Rating B&G Foods a ‘Hold’?
Approximately 78% of analysts rate B&G Foods a “hold,” and 22% rate it a “buy.” None of the analysts rate it a “sell.”
What Are Wall Street Analysts’ Recommendations for ConAgra?
The average broker target price for ConAgra has risen slightly to $50.60 from $50.27. This 5% higher than ConAgra’s closing price of $47.91 on June 23.
Will Divestiture Help ConAgra Foods Drive Its Growth?
ConAgra Foods (CAG) will report its fiscal 4Q16 and fiscal 2016 earnings before markets open on June 30, 2016. It has recent divestiture and expansion news.
How Is Bunge’s Environmental, Social, and Governance Score?
Bunge (BG) has had the highest ESG score among its peers for the last five years.
Tyson Foods’ Updated Guidance for Fiscal 2016
Tyson Foods expects to increase share repurchases under its share repurchase program. The company has repurchased ~3.0 million shares for $200 million so far in fiscal 3Q16.
Did WhiteWave Foods’ Revenue Meet Expectations in 4Q15?
WhiteWave Foods (WWAV) was expected to report revenue of $1,034 million for 4Q15, a rise of 13.5% YoY (year-over-year). The company reported $1,027 million, an increase of ~13% compared to 4Q14.
Sizing up Papa John’s Management and Board of Directors
John H. Schnatter is the founder of Papa John’s and currently serves as the company’s chair and CEO. Steve M. Ritchie is the company’s President and COO.
Why Papa John’s Leads the Pack in Technology Implementation
Papa John’s was first to introduce online ordering at all of its US delivery restaurants in 2001 as well as first to introduce SMS text ordering in 2007.
Assessing Papa John’s Key Revenue Ingredients: Same-Store Sales and Unit Growth
Papa John’s same-store sales at the company-owned restaurants increased by 8.2% in 2014, compared to 6.6% in 2013.
A Recipe for Growth: Reading Papa John’s Franchise-Heavy Model
Papa John’s was operating 4,663 restaurants at the end of 2014, only 735 of which are company-owned. The remaining 3,928 are franchise-operated restaurants.
Post Holdings’ Revenue and Income Rise in Fiscal 4Q15
After its fiscal 4Q15 earnings report, Post Holdings fell by 2.2% to close at $61.99 per share as of November 23, 2015.
Flowers Foods Reports Mixed Results for 3Q15
Flowers Foods has a market cap of $5.6 billion. Flowers Foods’ year-to-date price movement has been rising quarter-over-quarter in 2015.
Archer Daniels Midland’s Stock Reacts to Unimpressive Results
In November, Archer Daniels Midland reported its 3Q15 results. The company’s stock didn’t react well to the results, falling by 7% and closing at $43.15.
How Burger King is financing its Tim Hortons acquisition
The Tim Hortons (THI) acquisition’s value of about $12.5 billion is more than Burger King’s (BKW) market capitalization of $10.9 billion as of August 26.
Why Starbucks is a healthy dividend stock
Starbucks (SBUX) has a dividend yield of 1.34% as of 3Q14. Wall Street analysts estimate this dividend yield to be higher in 4Q14 at 1.5%. To understand the health of dividend pay-out, dividend coverage ratio comes in handy. It’s calculated as the earnings per share (or EPS) over dividend per share.
Why Starbucks is focusing on sales leverage
The cost of goods sold for cost of operations includes occupancy costs. Together, the costs accounted for 41.2% of sales in the quarter compared to 42.8% in the same quarter last year. Cost of sales decreased by 1.6% due to lower commodity costs of coffee. The cost of sales decreased another 0.5% due to sales leverage.
Must-know: Starbucks’ key value metrics—traffic and ticket
As the name suggests, an increase in traffic means more customers are visiting stores. An increase in ticket means the average check paid by the customer is higher. Starbucks (SBUX) reported overall customer traffic of 2% in the quarter compared to 7% in the same quarter last year.
Must-know: Starbucks’ key value metrics—same-store sales
Same-store sales are one of the important drivers in the restaurant industry. Same-store sales directly drives the revenues. It measures the percentage change in the revenues generated by existing restaurant locations over the same period last year.
Must-know: Why Wendy’s is selling its company-owned restaurants
Wendy’s announced that it intended to sell 425 company-owned restaurants by the first quarter of 2014. Since 2013, the company has sold 418 restaurants in the U.S. market. Wendy’s is on track to almost achieving the set goal.
Must-know: The costs of McDonalds’ key metrics
Franchise margins declined by 0.6% to 82.2% in 2Q14 due to an increase in rents and depreciation expense along with franchising—company operated margins also declined by 0.6% to 17.1% over the same period.
Must-know: Key metrics in McDonalds’ quarterly earnings
McDonald’s reported flat global comparable sales and negative comparable guest count for 2Q14, which is concerning from a long-term income growth perspective.
Important food cost issues facing the restaurant industry
Food cost is one of the most important factors contributing to the overall cost of a restaurant business. Some of the major ingredients restaurants use are beef, chicken, cheese, and pork products.
Why marketing and advertising are so important for restaurants
Mainstream channels of marketing—like radio, TV, and print ads—are still common. But many restaurant chains have also used social media to increase their brand presence.
Important pros and cons of the company-operated restaurant model
In the last part of this series, we looked at the franchise model. Let’s now take a look at the company-operated restaurant model.
Important pros and cons of the franchise restaurant model
The most common business models in the restaurant industry are for franchised and company-operated restaurants. Let’s look at the franchise model in closer detail.
Key restaurant industry formats: The fast food business
Fast food restaurants, as the name suggests, specialize in serving food they can prepare and serve quickly. Fast food restaurants have no table service, like at McDonald’s (MCD).
Overview: Assessing the restaurant industry business model
Restaurants are simple businesses. Because we have to eat every day, people often think the restaurant industry is a safe one to invest in.
Must-know: Why restaurants are so important to investors
According to the USDA, Economic Research Service, the food-away-from-home (or FAFH) category amounted to 42% of household expenditure in 2012.
Must know: How coffee price affected Dunkin’ Brands
The performance of the coffee industry as a whole is less affected by coffee commodity price movements than the typical investor might expect.
Even with ~20,000 stores worldwide, Starbucks has room to grow
Perhaps one explanation for Starbucks Corp.’s (SBUX) lower store count growth is the company’s sheer size. This means the number of stores that Starbucks could open going forward could be limited.
Why food will become more important to Starbucks’ future growth
As a primary coffee retailer, food has been a relatively minor part of Starbucks Corp.’s (SBUX) focus in the past. But lately, Starbucks has been expanding its product offerings for food.
International presence: Dunkin’ brands’ positive global outlook
Dunkin’ Brands have had an international presence since 1961’s introduction into the Canadian market. Currently, their key markets for both brands are in Asia and the Middle East.
An industry advantage: Dunkin’ Brands’ operating costs are dieting
Dunkin’ Brands has a very low capital requirement relative to the rest of the coffee retail industry. This is due to its business model, centered around establishing franchises across the world.
Must-know: Dunkin’ Brands is innovating the supply chain
Dunkin’ Brands Group doesn’t typically supply products to its franchises. Revenues derive from royalty fees as opposed to product distribution.
Why does “the Starbucks Experience” influence consumers?
In addition to international expansion, Starbucks executives push the importance of the consumer experience. Essentially, the firm is dynamically changing its impressions by always offering something new.
Must-know risks: Why Starbucks should hedge its shrubs
Starbucks indicates that it uses derivative contracts to hedge commodity price risks. These contracts typically don’t have a lifespan longer than five years.
A Starbucks on every corner: A guide to the SBUX business model
This business model has allowed Starbucks to be the first coffee firm to put retail locations in each of the BRIC nations and many more.
Business overview: Why Starbucks deserves your attention
Starbucks began in 1971 as a single coffee shop in Seattle. Today, it’s the world largest coffee retailer, with over 19,000 locations in more than 60 countries (as of FY2013 end).
Investor cheat sheet: Boston Beer Co. and peers’ ups and downs
Even compared to a smaller craft beer company, Craft Brew Alliance Inc., Boston Beer Company has thrown out an impressive 20.6% over the last 12 months.
Is craft better? Boston Beer Company’s high-quality ingredients
The four main ingredients that Boston Beer Company uses are malt, hops, yeast, and apples. Malts, hops, and yeast are part of most beer-making processes.
Why Boston Beer Company’s diverse board drives its innovation
The composition of a company’s board is often overlooked, but people and talent are two important factors that drive value.
Why craft beer attracts Millennials and consumers with momentum
As the image of drinking premium beer is one of the key product offerings of the “better beer” category, advertising is crucial.
Why Boston Beer Company and peers’ beer distribution is important
Like other brewers in the United States, Boston Beer Company (SAM) sells its products to distributors and wholesalers, which in turn sell to retailers.
The rise of craft beer: Boston Beer Company and Samuel Adams
Craft beer consumption is on the rise, as drinkers are going for more premium products these days. Boston Beer Company (SAM) stands to benefit.