By Matt Cantor
By next year, Taco Bell won’t be serving kids’ meals any more, making it the first national fast-food chain to ditch the food-and-toy offerings. The impact on sales will be “insignificant,” says CEO Greg Creed. “Kid’s meals and toys simply no longer make sense for us to put resources behind…. …read more
Source: FULL ARTICLE at Newser – Home
Filed under: Earnings, Market News, Internet, Stocks, Investing
Netflix and Apple are the stocks you want to watch today. Those and more are what’s in the news Tuesday on Wall Street.
The Dow industrials (^DJI) edged just slightly higher Monday, the S&P 500 (^GPSC) added 3 points — to mark its 23rd record high of the year — and the Nasdaq (^IXIC) rose 12.
Netflix says its quarterly profit soared nearly fivefold from a year ago, even better than Wall Street had expected. But subscriber growth to the movie streaming service was a bit off target. Last week Netflix received 14 Emmy nominations for its original series, including best drama for “House of Cards.” Now investors want to see if it can turn those nominations into new subscribers. Netflix (NFLX) shares have more than tripled in price during the past year, but they’re set to slide Tuesday morning.
Dow components DuPont (DD), United Technologies (UTX) and Travelers Cos. (TRV) are also out with quarterly numbers this morning. In addition to its earnings, DuPont says it may sell its performance chemicals business, which is the company’s second largest revenue producer.
After the closing bell, we’ll hear from Apple (AAPL) and AT&T (T). Apple’s net is likely to drop from a year ago as it’s been quite a while since the company has introduced an important new product.
On the merger front, CapitalSource (CSE) has agreed to be acquired by Pacwest Bancorp (PACW) in a deal valued at $2.3 billion dollars.
Taco Bell is taking the toy out of the taco. The Yum Brands (YUM) unit says its will stop selling kids meals and toys, probably early next year. It wants to focus on attracting young adults. The company says kids meals account for less than 1 percent of its overall sales.
Finally, how much money do you need to have to be rich? A survey by UBS (UBS) found $5 million is the magic number for most people, with $1 million of that in cash. Half of the respondents also said being rich means having “no financial constraints.”
–Produced by Drew Trachtenberg.
%Gallery-193033%
Permalink | Email this | Linking Blogs | Comments
Source: FULL ARTICLE at DailyFinance
By Sean Williams, The Motley Fool
Filed under: Investing
It’s often been said that innovation is everything when it comes to operating a business. From technology to health care and even food service, fresh ideas and constantly adaptable product and service profiles are needed if a business has any hope of growing and staying profitable.
Constantly innovating, though, is always the tricky part, as it’s not as easy as it may sound. Trial and error can often weigh more heavily to the error side, and a business may be written off for dead if it fails to produce a new hit after a couple years. However, occasionally a dying or stagnant brand can be resurrected from the dead because of a hit product, or series of products. Here are three brands that have used innovation as a shot of adrenaline to get their business jump-started once again.
1. Taco Bell
It’s been a rough couple of years for Mexican fast-food retail chain Taco Bell, which is operated by Yum! Brands . In early 2011 a scandal erupted over the meat content in Taco Bell‘s seasoned beef. According to a lawsuit filed in Alabama, research of Taco Bell‘s seasoned beef indicated less than 35% beef content, which is well below the minimum requirements set by the U.S. Department of Agriculture to label a product as beef. Taco Bell fired back with a scathing assessment of its own, but the PR damage had been done.
But rather than sitting on its laurels, Taco Bell took to the taste buds of millions of Americans and innovated its way out of certain disaster. On March 8, 2012, Taco Bell combined its fast-service Mexican-food brand with PepsiCo‘s Doritos brand to create the Doritos Locos taco. Sales of Doritos Locos tacos have been phenomenal, with the company selling about 1 million of the delectable morsels every day and accounting for approximately one-quarter of all taco sales. The love for Doritos flavored chips even spawned a second collaboration, with the companies introducing the Cool Ranch Taco last month.
These tacos come with about a 40% pricing premium to standard tacos, providing the margin boost needed to help Taco Bell rise from the doldrums — not to mention another nice plug for the Frito Lay-branded Doritos owned by PepsiCo.
2. Volkswagen
After powering many people through the 1960s with the small but popular Volkswagen Beetle, the company found its demand waning in the 1980s and 1990s. According to The Wall Street Journal, by 1992, Volkswagen had sold just 49,000 cars in the U.S., total, and had been thinking about pulling out of the region altogether.
However, things changed in drastic fashion in 1998, when Volkswagen reintroduced the Beetle with new, sleek styling and a fresh look aimed at hitting a younger market. The design didn’t just fit the bill based on its relatively inexpensive price — it touched a nerve with consumers who loved the car’s style.
Source: IFCAR, commons.wikimedia.
So far in 2013, with the Beetle getting
From: http://www.dailyfinance.com/2013/04/14/3-big-brands-that-innovated-their-way-back-from-th/
By Kevin Spak 
From: http://www.newser.com/story/166099/taco-bell-to-make-menu-healthier-eventually.html
Filed under: Food & Beverage, Food
Taco Bell (YUM) has seen sales explode in the last couple of years, largely on the strength of zany junk food like the Doritos Locos Tacos. But now it’s making a pitch to customers who aren’t necessarily attracted by bizarre fast-food mashups.
The “Mexican-inspired” fast-food joint announced this week that it was going to start bringing healthier offerings to its menu. According to the AP, it’s aiming to make at least 20% of its menu items meet government guidelines for fat and calorie content by 2020. That means, for instance, that a single meal would only have 666 calories, based on the 2,000-calorie daily diet recommended by the USDA. CEO Greg Creed said that some of the healthier products may start launching as early as next year.
That’s not the only change coming to Taco Bell‘s menu. Earlier this month, Creed told a restaurant industry conference that the chain was aiming to double sales over the next decade, in part by adding breakfast to the menu.
The breakfast menu (dubbed “FirstMeal,” of course) has already rolled out in more than 800 Taco Bells on the West Coast, including locations in California, Arizona and Colorado. As you might expect, you aren’t getting pancakes — Taco Bell looks to be putting its own twist on the breakfast burrito with its first offering, the A.M. Crunchwrap. It features egg, cheese, a hashbrown and your choice of bacon or sausage, all stuffed inside a tortilla. And since this is Taco Bell, you’ll get it with a glass of Mtn Dew A.M., which is a mix of a Mountain Dew and orange juice.
“Everyone’s saying we’re crazy because McDonald’s owns this,” Creed told the conference. “That has to stop.”
And breakfast isn’t the only time of day that Taco Bell wants to conquer. The chain also recently started offering an afternoon menu called “Happier Hour,” which includes the snack-sized loaded grillers and a variety of frozen drinks. It will aim to increase traffic during the 2 p.m. to 5 p.m. time block, which tends to be a dead zone for restaurants.
We’re not sure we can get on board with the idea of eating Taco Bell for breakfast, but then, we’re sure people said the same of McDonald’s. Maybe we just need to think outside the bagel.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
%Gallery-179959%
Permalink | Email this | Linking Blogs | Comments
From: http://www.dailyfinance.com/on/taco-bell-breakfast-healthy-choices/
Filed under: McDonald’s, Market News
McDonald’s tries to make its service friendlier, and Taco Bell looks for healthier menu options.
The top complaint of McDonald’s (MCD) customers is that employees are rude or unprofessional. According to The Wall Street Journal, company officials recently told franchise operators that “service is broken” – that’s a quote – and they need to fix the problem.
The Journal reports that one in five customer complaints have to do with the friendliness of the people who work at McDonald’s, and the number of complaints about service has increased significantly over the past six months.
QSR Magazine does an annual study of service at fast-food chains, and McDonald’s has consistently ranked near the bottom. Of the seven major chains in last year’s report, only Burger King (BKW) scored lower than Mickey D’s for friendliness of its employees.
During its webcast with franchisees, McDonald’s said customers value good service almost as highly as price.
In addition, McDonald’s is one of the slowest fast-food chains. In an industry where every second counts, QSR found the wait time at McDonald’s drive-through windows was about 189 seconds. That compares to less than 130 seconds at Wendy’s (WEN), the industry leader.
Why does McDonald’s have these problems? There’s no one answer, but the Journal notes that employee turnover is very high, and that 90 percent of its restaurants are not owned by the company, but by individual operators.
Despite these problems, McDonald’s is doing plenty of things well. It continues to remodel its restaurants and roll out new menu items. Also, earnings in the fourth-quarter beat expectations. Its next earnings report is due out next week.
As for Taco Bell, owned by Yum Brands (YUM), the company says it wants to offer “more balanced” nutritional choices on its menu. It plans to launch some new products next year, and it may reformulate some current menu items. And eventually, by 2020, one out of five combo meals will meet federal guidelines for calories and fat content.
That’s part of a growing trend in the industry, even though some critics complain that the new “healthier” offerings are not really all that healthy.
-Produced by Drew Trachtenbeg
%Gallery-179103%
Permalink | Email this | Linking Blogs | Comments
From: http://www.dailyfinance.com/on/mcdonalds-service-taco-bell-menu/
By Travis Hoium, The Motley Fool
Filed under: Investing
Taco Bell has been struggling against Chipotle for years in the Mexican fast-food market. But it’s found a secret weapon, turning its tacos into giant Doritos chips. Doritos loves the exposure, and will launch a Locos Tacos chip early next month. Is this a fad, or a sustainable advantage that can save Taco Bell? Travis Hoium explores the latest moves by Taco Bell.
Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool’s free report “3 American Companies Set to Dominate the World” shows you how. Click here to get your free copy before it’s gone.
The article Is Doritos Turning Taco Bell Around? originally appeared on Fool.com.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide, Chipotle Mexican Grill, and McDonald’s. The Motley Fool owns shares of Chipotle Mexican Grill and McDonald’s. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");
function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}
addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})
var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);
(function () {
var ga = document.createElement('script');
ga.type = 'text/javascript';
ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js';
var s = document.getElementsByTagName('script')[0];
s.parentNode.insertBefore(ga, s);
})();
Read | Permalink | Email this | Linking Blogs | Comments
By Steve Symington, The Motley Fool
Filed under: Investing
Fast food giant McDonald’s recently announced it will release a new breakfast sandwich in April, aptly dubbed the Egg White Delight.
As you might expect, that’s the company’s fancy name for a whole grain Egg McMuffin, sans egg yolk. When all’s said and done, then, McDonald’s hopes hungry fast food fans can enjoy their morning knowing they’ve only consumed 260 calories, compared with the 300 calories they would have otherwise ingested going the classic route.
Source: McDonalds.com.
Even so, putting aside the fact that I’m firmly in the camp of folks who love egg yolks and champion their under-appreciated nutritional value, I also can’t help but wonder whether a measly 40-calorie difference can really sway the determined minds of hungry consumers with a hankering for Mickey D’s in the morning. As a basis for comparison, McDonald’s Big Breakfast Platter with Hotcakes — one of which I just so happened to gleefully snarf down last week in a bit of enjoyable due diligence — sports a whopping 1,090 calories. Heck, with that in mind, sometimes I’d be surprised if I didn’t burn 40 calories with a good resounding sneezing fit.
Of course, the Egg White Delight is just the latest in McDonald’s efforts to bolster its struggling comparable same-store sales, which declined a better-than-expected 1.5% in February, led by a 3.3% drop in the U.S. It’s important to note, however, that last February’s results were helped by an extra day in the month and, excluding those extra 24 hours, domestic same-store sales would have been flat while overall comparable results would have risen 1.7%. All in all, those encouraging numbers helped shares of McDonald’s rise more than 12% year to date, closing at a new 52-week high last Friday.
Healthy competition
Meanwhile, the fast food industry as a whole continues its attempts at winning more business of increasingly health-conscious consumers, including Taco Bell owner Yum! Brands with its mouth-watering Cantina Bell offerings — the flavor of which, incidentally, also pleasantly surprised me last week. For its part, Yum! Brands enlisted celebrity chef Lorena Garcia to create the Cantina Bell menu to help the chain to better compete with up-and-coming threats in comparatively healthy fast-casual restaurants like Panera Bread and Chipotle Mexican Grille , whose most recent quarterly same-store sales rose 3.8% and 5.1%, respectively.
In addition, Chipotle is also expanding rapidly and increased its number of locations by nearly 15% last year, including 60 new units built in the fourth quarter alone, bringing its total number of restaurants to 1,410. Even so, the power of McDonald’s brand becomes increasingly apparent when we consider that, in 2012, the company not only managed to “reimage” more than 2,400 of its existing locations, but also opened the doors to 1,439 new restaurants worldwide. What’s more, for those of you wondering whether the golden arches have saturated the global market, in 2013, McDonald’s plans to spend more than $1.6 …read more
Source: FULL ARTICLE at DailyFinance
By Steve Symington, The Motley Fool
Filed under: Investing
Here at The Motley Fool, it’s no secret we advocate a long-term approach to investing. In fact, we often unapologetically state that any money you need in the next five years simply does not belong in the stock market.
I suppose, then, the title of this article should come as little surprise. Even so, an entire decade may seem more like an eternity to some in today’s world of up-to-the-minute news, high-frequency trading, and incessantly short attention spans.
While month-to-month fluctuations in the stock market can be admittedly unsettling, however, there’s no denying that stocks over 10-year periods become much more predictable and — for those of us willing to stick it out — profitable.
With this in mind, here are three great stocks I think any long-term investor could be happy to hold for the next decade:
Gearing up for smarter homes
First up, consider shares of network hardware specialist Netgear , which got absolutely clobbered last month after earnings missed estimates, largely thanks to continued weakness in Europe and a shift in profits to the Americas, which unexpectedly raised the company’s tax bill.
Even so, Netgear remains solidly profitable, and its long-term prospects have never been stronger. As I noted last month, management remains confident it can increase the company’s annual revenue 57% to $2 billion by the end of next year, with much of the near-term growth expected to come from new products resulting from Netgear’s recent acquisition of Sierra Wireless‘ Aircard business last year.
What’s more, Netgear’s product portfolio puts it in the perfect position to benefit from the rapidly growing market for “smart home” products, including networked multimedia players, home camera systems, A/C Ethernet devices, and Wi-Fi hardware. In fact, Netgear CEO Patrick Lo recently stated that he believes the smart home product market is poised to maintain a 28% compound annual growth rate and should represent a $25 billion industry by 2017 — a claim that makes plenty of sense considering less than one-third of the world’s 7 billion people had access to the Internet by the end of 2011.
Next, maybe Yum! Brands can satisfy your hunger for long-term growth. After all, as the owner of three iconic brands in Pizza Hut, Taco Bell, and KFC, Yum! has managed to grow its earnings per share by at least 13% per year for each of the past 11 years, largely thanks to its continuing mind-boggling pace of location expansion both in the U.S. and abroad. To be sure, even in the seemingly saturated U.S. market, the company built 100 new Pizza Huts and 15 Taco Bells in the fourth quarter alone.
China, on the other hand, is an entirely different animal for the company. In 2012, Yum! Brands managed to open an eye-popping 889 new restaurants in the region, with 369 of those locations finished in the fourth quarter.
Unfortunately, following a food scare from two KFC suppliers in China, the brand took a hit toward the end of last …read more
Source: FULL ARTICLE at DailyFinance
By Mark Russell 
Source: FULL ARTICLE at Newser – Home
By The Huffington Post News Editors
When traveling outside the U.S., you’re likely to see some ancient sites, unfamiliar buildings, exciting cuisine, interesting museums and … McDonald’s. The global fast food chain can be found everywhere from Pretoria to Paris. And while McDonald’s has a clear lead in non-U.S. systemwide sales compared to other quick service chains, it isn’t the only one banking on a global presence.
QSR Magazine recently ranked the top 30 quick service restaurants around the world, not counting U.S. sales. McDonald’s, which came in first place, has more than three times the amount of sales as KFC, the restaurant with the second highest global sales command. But given how much Yum Brands, the parent company of KFC, Taco Bell and Pizza Hut, is trying to beef up its China expansion, we’re wondering if that gap will start to close slightly in the next several years.
Check out the top 10 global quick service restaurant chains:
By The Huffington Post News Editors
Back in April of 2010, the media was fast to descend on KFC‘s Double Down following the sandwich’s debut in U.S. stores. Gleeful attacks on the bunless offering, which features two deep-fried chicken patties, bacon, two types of melted cheese and a “secret” sauce, included a takedown from The New York Times’ Sam Sifton, who dismissed it as “stunt food” and a “new low” in the category at that. Despite the bad reviews, or perhaps buoyed by them, people bought the sandwich in droves. A month later, KFC had sold 10 million Double Downs and decided to extend the limited-time product’s run indefinitely.
But reports of its initial success were downplayed by analysts, and the Double Down slowly slipped from the domestic spotlight. (A KFC spokesman would not confirm if it is still available in U.S. stores.) Yet in the last two years, the sandwich has popped up in one foreign market after the next, transforming the one-time April Fool‘s gag into a runaway fast food success worldwide.
The unlikely hit is the direct result of parent company Yum! Brands’ successful strategy of transplanting concepts — often outrageous ones — across international markets. In addition to KFC, Yum! Brands’ global portfolio includes Pizza Hut and Taco Bell, which all offer some products with shock-based appeal.
Joe Satran / The Huffington Post
…read more
Source: FULL ARTICLE at AOL
By Rick Munarriz, Munarriz, The Motley Fool
Filed under: Investing
If you’re feeling good about the market, you’re not alone. Take my hand as we go over some of this week’s more uplifting headlines.
1. Face to Facebook
The eye candy on Facebook is about to get bigger.
Inspired by the success of Flipboard and its own Instagram, Facebook is making photographs and videos larger on its freshly redesigned news feed. This is the way that most people consume the site through desktop or mobile so it’s an important move.
The new design will make it easier for users to customize their news feeds, but let’s talk about this from a business perspective. What do you think it means that Facebook is cleaning up the clutter and making graphics larger? Clearly Facebook is paving the way to serve up bigger ads that will be easier to notice, and that will pay off through marketers willing to spend more to reach people through Facebook.
2. Boxing Pandora
Pandora‘s doing better than the cynical market was expecting.
The leading music discovery service came through with encouraging results and guidance last night. Revenue climbed 54% to $125.1 million, and for a change it was the more promising subscription-based revenue that outpaced ad revenue. Pandora’s adjusted net deficit of $0.04 a share may not seem all that exciting, but this marks the fourth straight quarter in which the fast-growing dot-com has beaten Wall Street‘s profit targets.
It’s not just the past that seems promising. Pandora’s revenue guidance for the current quarter and all of 2013 is ahead of where the pros are currently perched.
Pandora also revealed that the number of active listeners rose to a record 67.7 million during the month of February. There were some model concerns after listenership slipped from 67.1 million to 65.6 million between December and January.
3. Yo quiero Taco Bell
If the drive-thru line at Taco Bell is a little longer, blame it on the Cool Ranch.
Yum! Brands‘ popular chain of dirt-cheap Mexican food introduced Doritos Cool Ranch-flavored taco shells this week. The Cool Ranch Doritos Locos Tacos rollout follows last year’s success with the Doritos Nacho Cheese-flavored shells.
Last year’s incarnation was a wild success. Taco Bell wound up selling 100 million Doritos Locos Tacos in the first 10 weeks, boosting the chain’s comps along the way. It has gone on to sell more than 350 million in less than a year.
The novelty may not be as potent for the new Cool Ranch addition, but it’s a smart call for a company to build on last year’s sleeper hit of the fast food scene.
4. Set your blenders to whir
Jamba shares hit a fresh 52-week high today, but not before the stock initially opened 12% lower the day after posting mixed quarterly results.
Why were investors treated to the welcome reversal? Well, while revenue did coming a little light during the seasonally soft holiday quarter, Jamba did surprise analysts by posting …read more
Source: FULL ARTICLE at DailyFinance
Filed under: Dell, Facebook, Market News, Food & Beverage, Scandals and Lawsuits, Wall Street Watch
From a new Taco Bell menu item sure to soar, to a short-sighted activist taking aim at the Dell deal, here’s a rundown of this week’s best and worst moves in the business world.
Yum! Brands (YUM) — Winner
The new Cool Ranch Doritos Locos Tacos are here.
Yum! Brands’ Taco Bell officially introduced the Cool Ranch-flavored shells on Thursday, and it actually gave the company’s Twitter and Facebook followers a heads start by letting them know the new tacos were available in some stores on Wednesday for those willing to ask.
The first Doritos Locos Taco has been a smart menu addition for Taco Bell. After the fast-food chain introduced the original Nacho Cheese-flavored shells last year it sold 100 million tacos in 10 weeks.
Even if the Cool Ranch Doritos Locos Taco doesn’t generate the same level of buzz and blockbuster sales as last year’s rollout, the move should keep Taco Bell‘s store-level comps growing.
Dell (DELL) — Loser
The $24.2 billion deal to take Dell private may be falling apart. Billionaire activist investor Carl Icahn has taken a vocal stake in the struggling PC maker, and he’s got a doozy of Plan B.
Icahn feels that Dell should hold out for a better price, and if that doesn’t materialize that it should still reject the buyout offer. He thinks that Dell should reward investors with a $16 billion dividend. Dell doesn’t have that kind of money, so it would mean taking on new debt to make the beefy payout possible.
Dell is not in a good position to take on debt. PC sales have been slipping for two years, and Dell’s been unable to make a dent in the smartphone and tablet markets that have been cannibalizing desktops and laptops. A leveraged Dell will be a gutted Dell that will ultimately falter. Icahn’s had plenty of smart ideas before, but this isn’t one of them.
Facebook (FB) — Winner
The leading social networking website is going for another makeover.
Facebook introduced a redesigned news feed at a media event on Thursday that will roll out to the site’s 1 billion-plus active users in the coming days.
The new news feed is less cluttered, can be customized, and features larger photos and videos. There’s been a growing trend to supersize images at websites and apps, and Facebook obviously knows how much people like pictures. It does, after all, own Instagram.
However, the reason why the cleaner redesign gets the winning nod this week is that it’s a move that will probably be appreciated by users who typically get vocal in their displeasure whenever Facebook tweaks their time lines, walls, and news feeds. Facebook continues to grow in popularity, but it can never …read more
Source: FULL ARTICLE at DailyFinance
By Rick Aristotle, Munarriz, The Motley Fool
Filed under: Investing
Chipotle Mexican Grill is cool, but is Cool Ranch even cooler?
Yum! Brands is introducing new tacos today featuring shells with Doritos Cool Ranch seasoning.
The latest entry to Taco Bell‘s Doritos Locos Tacos are officially hitting the market tomorrow, but Yum! Brands surprised followers on Facebook and Twitter by alerting them that the new menu item is available today.
A year ago Chipotle investors would’ve laughed off any attack from Taco Bell. Isn’t that where young penny-pinchers go to load up in the wee hours? How dare anyone compare Chipotle’s “food with integrity” with the slop being spooned out at Taco Bell?
However, the success last year of the original Doritos Locos Tacos and the slightly more upscale Cantina Bell line appears to be having some kind of effect on Chipotle.
Comps at Taco Bell popped 7% during the third quarter, the first period that the Cantina Bell and Doritos Locos Tacos were available for the entire quarter. Chipotle clocked in with same-store sales growth of just 4.8%.
Most chains would love to see a typical store ringing up 4.8% more in sales than it did a year earlier, but Chipotle investors were used to more growth than that. Things only got worse when Chipotle’s comps only rose 3.8% during the fourth quarter.
Can Chipotle grow faster if Taco Bell has another hit on its hands?
In theory, it shouldn’t play out that way. Chipotle is fast casual. Taco Bell is fast food. Taco Bell competes with burger joints armed with similar value menus and drive-thru windows. Chipotle’s higher-caliber food makes it more likely to lose a customer to rival fast casual darling Panera Bread before it comes up short against Taco Bell.
However, the novelty of the new Cool Ranch Doritos Locos Tacos may wind up costing both Chipotle and Panera in the near term.
There may also be a more pronounced move on Chipotle’s bottom line. Revenue grew at a reasonable 17% clip in Chipotle’s latest quarter, but income only climbed 7% for the period. Chipotle argues that it didn’t raise prices quickly enough as commodity costs inched higher, but could it also be that Chipotle was afraid to tweak its menu with higher price points given Taco Bell‘s thriving at the low end?
We may never know. However, Chipotle better hope that it doesn’t post disappointing comps in the coming quarters. Given the stock‘s lofty valuation multiples, it better prove that it’s the one that’s cooler than Cool Ranch.
Chipotle has been on an absolute tear since the company went public in 2006. Unfortunately, 2012 hasn’t been kind to Chipotle’s stock, as investors question whether its growth has come to an end. Fool analyst Jason Moser‘s new premium research report analyzes the burrito maker’s situation and answers the question investors are asking: Can Chipotle still grow? If you own or are considering owning shares in Chipotle, you’ll want to click here now and …read more
Source: FULL ARTICLE at DailyFinance
By Richard Saintvilus, The Motley Fool
Filed under: Investing
It’s been a rough couple of weeks for Yum! Brands . Just ahead of the company’s earnings report, management warned that fourth-quarter comp (or same-store) sales would reverse the year-ago 21% gain to a 6% decline due to a slowdown in China.
On the news, the stock lost as much as $7, or roughly 10% of its value. But it didn’t end there. Shortly after, scandal followed, which involved two suppliers to the company’s KFC restaurants. Reports suggest that these suppliers used excessive amounts of antibiotics in their chickens. The company’s reputation took a hit and Chinese consumers were not happy, as calls for boycotts surfaced. On this news, the stock took another 5% tumble. Yum! was not so appealing.
Big trouble in little China, but was it that bad?The company did its best to mitigate the damage. To be fair, only two suppliers out of 30 were found to have violated health regulations. But as with everything else, it’s going to take some time for the focus to shift to what was an otherwise good quarter, which included a 1% revenue growth, with a 5% increase in worldwide systems sales (which is the aggregate total of every restaurant location, whether company-owned or franchised).
Despite the bad PR and the lowered comp guidance, adjusted system revenue in China advanced 20% for the year and 11% in the quarter. Likewise, comps grew 4% for the year, despite the 6% decline for the quarter. Meanwhile, system sales for the Yum! Restaurants International segment increased 7%. And both YRI and the U.S. saw a 3% growth in comps.
In other words, amid such bad press, Yum! still outperformed McDonald’s in some key areas. McDonald’s posted just 3.1% growth across the global system compared to 5% for Yum!. Likewise, McDonald’s underperformed in U.S consolidated revenue, which only advanced 2%, while posting comp growth of only 0.3% in the quarter. Granted, McDonald’s is much larger, but its performance is at best on par with Yum!’s performance, especially given the negativity in China. For that matter, McDonald’s China comps are still -0.9%.
Can the competition seize an opening?Yum!’s restaurant comp breakdown was also noteworthy. The company reported a 1% decline in Pizza Hut. But KFC, which was the subject of the chicken scandal, still managed to advance 4%. Granted, the full impact of that news won’t be known for at least another quarter. However, Taco Bell surged 5%, which means that Yum! is not ceding market share to Chipotle Mexican Grill as suspected.
However, despite Chipotle’s management insisting that the company is not losing share to rivals, Chipotle posted just a 4% growth in comps. It’s not a terrible number by any stretch, but it’s 1% less than at Taco Bell, which recently launched its Cantina Bell line of food as a direct attack on Chipotle. So far, Taco Bell‘s competitive tactics seem to be working pretty well as evidenced by the comp growth.
Will China ever forgive?The …read more
Source: FULL ARTICLE at DailyFinance
By Jonathan Salem Baskin, Contributor
Horse meat keeps turning up in European food products. Though the vast majority of brands tested most recently by the UK government came up clean, meat from Taco Bell and Bird’s Eye got flagged. This comes after major equine revelations about Burger King‘s cheeseburgers and Ikea’s meatballs. …read more
Source: FULL ARTICLE at Forbes Latest
LONDON (AP) — Taco Bell is the latest restaurant chain to acknowledge that its food has been adulterated with horse meat, yanking a variety of ground beef products from its three British outlets and issuing an apology to its patrons Friday. …read more
Source: FULL ARTICLE at Yahoo Business
By Kevin Spak 
Source: FULL ARTICLE at Newser – Home
