Tag Archives: Yum Brands

China's Bird Flu A Problem For Yum! Brands, Co Says

April 12, 2013 Bartle Doo Leave a comment

China‘s latest bout with a new strain of avian influenza does not bode well for Yum! Brands, the company said in its 8-K filing with the Securities and Exchange Commission on Wednesday. March same-store sales declined an estimated 13% for their China operations. This included an estimated decline of 16% at KFC and a 4% growth at Pizza Hut. Within the past week, publicity associated with bird flu in Shanghai and surrounding areas has had a negative impact on KFC sales, the company said. “Historically in these situations, we have educated consumers that properly cooked chicken is perfectly safe to eat, and we will continue to do so,” the company said in its filing. Further updates regarding Yum! Brands’ China sales will be released with first quarter earnings on April 23, 2013. April same-store sales for China will be released on May 10 after market hours. So far, the share price of Kentucky-based Yum! Brands has held up okay from the scare. The stock is up around 0.8% over the last five days but down 1.82% over the last month. China is Yum’s most lucrative market. According to its third quarter report, China accounted for more than half of its overall revenue of $3.57 billion, and the country also generated around 40% of Yum’s profit. Since opening its first KFC branch on the Chinese mainland in 1987, Yum has nearly 5,000 restaurants in more than 800 Chinese cities. Over the last month, 43 people from Anhui, Jiangsu and Zhejiang provinces and Shanghai have been diagnosed with the new H7N9 strain of bird flu. Eleven people have died, most of them in Shanghai, the World Health Organization said Friday. New cases are popping up daily. On Friday, Beijing News reported that people carrying the H7N9 virus may have entered Beijing in recent days from East China due to an increased flow of tourists, but no cases of bird flu have been reported there as of Friday. While this is a new strain of bird flu, WHO said there has been no evidence of human to human transmission. And even though the disease does not survive in cooked meats, many restaurants in Shanghai have outright banned selling poultry dishes in an attempt to curb fears by the public.

From: http://www.forbes.com/sites/kenrapoza/2013/04/12/chinas-bird-flu-a-problem-for-yum-brands-co-says/

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Yum! Brands Feeling Fluish in China: Is It Time to Sell?

April 11, 2013 Bartle Doo Leave a comment

By Steve Symington, The Motley Fool

Filed under: Investing

Shares of Yum! Brands tumbled nearly 3% in pre-market trading this morning after an SEC filing showed same-store sales fell around 13 percent for its China division, including a 16% drop in comparable sales for its KFC locations.

So what’s the culprit this time?

In the filing, the company stated:

Within the past week, publicity associated with Avian flu in China has had a significant, negative impact on KFC sales. Historically in these situations, we have educated consumers that properly cooked chicken is perfectly safe to eat, and we will continue to do so. We do not anticipate providing any further updates regarding China Division same-store sales until our scheduled first-quarter earnings release on April 23, 2013.

Image source: Wikimedia Commons

This isn’t the first time …
To be sure, Yum! Brands is no stranger to doing damage control; just last month, the company issued an apology after pulling a variety of ground “beef” products from its three British outlets when they were found to contain horse meat. While the product posed no particular health risks, and Yum! stressed that no other locations were affected, many folks weren’t too keen on the idea of eating their beloved equine friends.

The food industry in China, however, has proven an even more difficult beast to tackle, and KFC sales are still reeling from the aftermath of buying tainted chicken from Chinese supplier New Hope Liuhe, which was dosing the birds with dangerously high levels of antibiotics and hormones.

Curiously enough, global fast-food giant McDonald’s was also using New Hope Liuhe as a chicken supplier at the time, and both Yum and Mickey D’s wasted no time stopping orders from the company when the investigation came to light. However, consumers remained queasy, even after Chinese municipal governments promised to introduce strict food safety laws to prevent any similar situation from recurring.

As a result, Yum’s massive presence in China caused it to take a much more significant hit than McDonald’s, when Chinese consumer confidence hit the fan. Remember, while Yum boasted nearly 6,000 locations in China by the end of 2012, McDonald’s was still hoping to grow its number of units to just 2,000 by the end of 2013.

This, too, shall pass
Even so, I tend to agree with Yum! Brands’ management when they insist the weakness in China will prove temporary. Perhaps that’s why its shares are trading up slightly this morning in spite of the pre-market weakness.

In the end, dealing with sketchy suppliers is, unfortunately, par for the course for any company in the food business; so remember, these concerns aren’t necessarily Yum! Brands’ fault. What’s more, the company knows a thing or two about weathering these sorts of storms, and is intelligently doing everything in its power to show its food is worth consumers’ money.

When this inevitably blows over, and considering Yum! Brands will almost triple its number of locations in China to around 14,000 eventually, it’s a safe bet that patient

From: http://www.dailyfinance.com/2013/04/11/yum-brands-is-feeling-fluish-in-china-buy-on-the-w/

Articles of Interest

Bird Flu Sickening KFC Sales

April 11, 2013 Bartle Doo Leave a comment

By Matt Cantor Study finds sighted babies of blind mothers find other ways to bond Colonel Sanders has a bird flu problem. The H7N9 virus, which has killed nine people, has had a “significant, negative impact on KFC sales” in China, Yum Brands revealed in a regulatory filing yesterday. That’s no small problem for the company: China is responsible for more than half of Yum’s…

From: http://www.newser.com/story/166044/bird-flu-sickening-kfc-sales.html

Business, Finance, Occupation & Industry

Yum! Brands Posts Decline in March China Comps

April 10, 2013 Bartle Doo Leave a comment

By Eric Volkman, The Motley Fool

Filed under: Investing

Yum! Brands is continuing to be affected by health scares in Asia‘s largest nation. In an SEC filing, the company said its March same-store sales in its China division fell by roughly 13% in March. The decline was more pronounced at the company’s KFC chicken restaurants, which saw a drop of approximately 16%. The figure for Pizza Hut was 4%.

Yum! Brands attributed the declines to the latest outbreak of bird flu in the country. In the filing, the company said: “[P]ublicity associated with avian flu in China has had a significant, negative impact on KFC sales. Historically in these situations, we have educated consumers that properly cooked chicken is perfectly safe to eat, and we will continue to do so.”

The article Yum! Brands Posts Decline in March China Comps originally appeared on Fool.com.

Fool contributor Eric Volkman and The Motley Fool have no position in Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools don’t 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.

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Brazil Fast Food Announces Fourth Quarter and Fiscal Year 2012 Results

April 2, 2013 Bartle Doo Leave a comment

By Business Wirevia The Motley Fool

Filed under: Investing

Brazil Fast Food Announces Fourth Quarter and Fiscal Year 2012 Results

RIO DE JANEIRO–(BUSINESS WIRE)– Brazil Fast Food Corp. (OTC Markets: BOBS) (“Brazil Fast Food,” or the “the Company”), the second largest fast-food restaurant chain in Brazil with 1,031 points of sale, operating under (i) the Bob’s brand, (ii) the Yoggi brand, (iii) KFC and Pizza Hut São Paulo as franchisee of Yum! Brands, and (iv) Doggis as master franchisee of Gastronomia & Negocios S.A. (former Grupo de Empresas Doggis S.A.), today announced financial results for the fourth quarter and fiscal year ended December 31, 2012.

Fiscal Year 2012 Highlights

System-wide sales totaled R$ 1,104.4 million, up 16.7% from 2011
Revenue totaled R$ 247.9 million, up 9.3% from 2011
Points of sale totaled 1,031 at the end of 2012, up from 880 at the end of 2011
EBITDA was R$ 35.1 million, up 60.5% from R$ 21.9 million in 2011
Operating income was R$ 28.9 million, up 75.8% from R$ 16.4 million in 2011
Net income was R$ 20.7 million, or R$ 2.55 per basic and diluted share

Fourth Quarter 2012 Highlights

System-wide sales totaled R$ 329.5 million, up 18.6% from the fourth quarter of 2011
Revenue totaled R$ 71.9 million, up 18.8% from the fourth quarter of 2011
EBITDA was R$ 12.4 million compared to R$ 2.8 million in the fourth quarter of 2011
Operating income was R$ 10.8 million compared to R$ 2.0 million in the fourth quarter of 2011
Net income was R$ 7.7 million, or R$ 0.95 per basic and diluted share

“In 2012, we continue to see strong growth in our top line and a significant increase in profitability. This was primarily due to the expansion of our franchise base in key markets throughout Brazil, in line …read more
Source: FULL ARTICLE at DailyFinance

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A Cash Monster: Basketball & March Madness

March 29, 2013 Bartle Doo Leave a comment

By Steve Symington, The Motley Fool

Filed under: Investing

With each passing year, the growing popularity of the March Madness continues to astound me.

In fact, according research from Challenger, Gray & Christmas, an estimated 3 million employees recently said they would spend between one and three hours per day watching this year’s tournament during work hours, potentially costing American companies more than $134 million in “lost wages” over the first two days of March Madness alone. Of course, that assumes each of those workers would have been productive otherwise, which is certainly a debatable topic in its own right.

Now don’t get me wrong. I love college basketball and recognize the many reasons the NCAA tournament is so alluring, from its rowdy fans to the inevitable stunning upsets and the obvious irony that unpaid players can consistently bring such passion to the game.

Watching the games
Of course, this unique mix helped drive nearly 21 million people to watch last year’s championship game and helps explain why CBS and Time Warner‘s Turner Broadcasting were willing to pay $10.8 billion three years ago to secure broadcast rights for the tournament through 2024, outbidding rival offers at the time from such competitors as Fox and Disney‘s ABC and ESPN.

Courtesy: Wikimedia Commons.

Of course, that easily eclipsed CBS‘s previous $6 billion, 11-year deal that began in 2003 and absolutely dwarfs the old seven-year, $1.725 billion agreement that ran from 1995 through the end of 2002.

Watching the ads
So why, exactly, did CBS and Turner have to pay so much this time around? According to research firm Kantar Media, NCAA men’s basketball last year became the first-ever postseason sport for which national TV ad spending exceeded the $1 billion mark.

You read that right: March Madness ad spending in 2012 managed to outpace even the NFL‘s postseason take, which came in at a respectable $976.3 million. What’s more, advertisers spent more dough on the NCAA tournament in 2012 alone than on the NBA, MLB, and the NHL postseasons combined.

In addition, those companies were willing to spend more than $1.3 million for each 30-second spot in last year’s NCAA championship game, or more than triple the cost of an ad to appear in the NBA championship series games. Even still, and perhaps unsurprisingly, Super Bowl commercials still took the cake in 2012 at an average cost of $3.5 million.

So who’s willing to spend those big bucks to get their names out to the masses? General Motors was last year’s whale, dropping a grand total of $80.3 million and leaving AT&T a distant second at $54.2 million. Naturally, Anheuser-Busch InBev and Coca-Cola were both eager to quench viewers’ thirst, throwing down $31.9 million and $31.7 million, respectively.

There was also no shortage of restaurant advertisements from the likes of Dominos Pizza and Yum! Brands-owned Pizza Hut, but the well-suited and comparatively small Buffalo Wild Wings — which incidentally remains a prominent NCAA sponsor this year — seemed to have gotten the best bang for its buck in 2012. Despite not even showing up in …read more
Source: FULL ARTICLE at DailyFinance

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Yum! Brands Keeps Dividend Steady

March 22, 2013 Bartle Doo Leave a comment

By Eric Volkman, The Motley Fool

Filed under: Investing

Yum! Brands is to hand out a new quarterly dividend. The company declared a payout of $0.335 per share of its common stock. This will be paid on May 3 to shareholders of record as of April 12. This amount matches that of the company’s two previous disbursements, the most recent of which was paid in January. Prior to that, the company had distributed $0.285 per share.

In recent times, Yum! Brands has tended to lift its dividend once per year.

The current dividend annualizes to $1.34 per share. That yields 1.9% at Yum!Brands’ current stock price of $69.69.

The article Yum! Brands Keeps Dividend Steady originally appeared on Fool.com.

Fool contributor Eric Volkman has no position in Yum! Brands. The Motley Fool has no position in Yum! Brands. 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.

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Will McDonald's Egg White Delight Leave Investors Hungry?

March 19, 2013 Bartle Doo Leave a comment

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

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Levi & Korsinsky Notifies Investors with Losses on Their Investment in Yum! Brands, Inc. of Class Ac

March 18, 2013 Bartle Doo Leave a comment

By Business Wirevia The Motley Fool

Filed under: Investing

Levi & Korsinsky Notifies Investors with Losses on Their Investment in Yum! Brands, Inc. of Class Action Lawsuit and the Deadline of March 25, 2013 to Seek a Lead Plaintiff Position

NEW YORK–(BUSINESS WIRE)– Levi & Korsinsky announces that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of investors who acquired Yum! Brands, Inc. (“Yum!” or “the Company”) (NYS: YUM) stock between October 9, 2012 and January 7, 2013.

For more information, click here: http://zlk.9nl.com/yum-brands/.

On November 29, 2012, the Company disclosed that its China Division same-store sales growth forecasts would not be met. Then on December 20, 2012 and December 21, 2012 news reports stated the Company knew, but concealed, that it was purchasing chickens containing excessive antibiotics and other illegal chemicals. In a January 7, 2013 disclosure the Company announced that it was lowering its full year 2012 guidance for same-stores sales for its China Division as a result of publicity surrounding a governmental review of the Company’s poultry supply.

If you suffered a loss in Yum! you have until March 25, 2013to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff. To obtain additional information, contact Joseph E. Levi, Esq. either via email at jlevi@zlk.com or by telephone at (877) 363-5972, or visit http://zlk.9nl.com/yum-brands/.

Levi & Korsinsky is a national firm with offices in New York and Washington D.C. The firm has extensive expertise in prosecuting securities litigation involving financial fraud, representing investors throughout the nation in securities and shareholder lawsuits. Attorney advertising. Prior results do not guarantee similar outcomes.

Levi & Korsinsky, LLP
Joseph Levi, Esq.
30 Broad Street – 24th Floor
New York, NY 10004
Tel: 212-363-7500
Toll Free: 877-363-5972
Fax: 866-367-6510
www.zlk.com

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS:

The article Levi & Korsinsky Notifies Investors with Losses on Their Investment in Yum! Brands, Inc. of Class Action Lawsuit and the Deadline of March 25, 2013 to Seek a Lead Plaintiff Position originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, …read more
Source: FULL ARTICLE at DailyFinance

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3 Great Stocks for the Next Decade

March 15, 2013 Bartle Doo Leave a comment

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

Articles of Interest

The 10 Top Global Fast Food Chains

March 12, 2013 Bartle Doo Leave a comment

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:

Wall St. Magically Thinks Yum! Brands' China Woes Are History

March 12, 2013 Bartle Doo Leave a comment

By 24/7 Wall St.

Filed under: Retail, Global Economy, Industry News, Consumer Goods

Yum! Brands Inc. (NYSE: YUM) may have saved its slide of bad news out of China with the release of its same-store sales data. On the surface it looks awful, but Wall St. works off of a relative basis, and it seems that the horrific slide may have abated from the company’s troubles in China.

A Securities and Exchange Commission filing from Monday evening said that first-quarter same-store sales declined an estimated 20% for the China Division, which includes an estimated decline of 24% at KFC and an estimated 2% at Pizza Hut Casual Dining. Yum! Brands went on to say, “Consistent with prior years, the first quarter of the China Division is two months and includes January and February results.”

That 24% sounds awful, and frankly it is. What saved the day is that the February same-store sales growth was approximately 2% for the China Division. That includes flat same-store sales at KFC and 13% growth at Pizza Hut Casual Dining. There is a caveat here around the calendar, but Wall St. is taking it to heart that maybe Yum! Brands is escaping its food quality issues in China.

As far as the caveat, Yum! Brands said, “We estimate the timing of Chinese New Year had a positive mid-teen impact on February same-store sales growth for both KFC and Pizza Hut Casual Dining, offsetting a similar negative mid-teen impact in January. For the full quarter, the Chinese New Year impact to same-store sales growth was neutral.” Yum! Brands plans to release March same-store sales for its China Division on April 10, 2013, after market hours.

Yum! Brands shares closed at $67.84 on Monday, against a 52-week range of $59.68 to $74.75, and the fast-food company’s cycle-low was just in February at the peak of the woes in China after the company admitted to misjudging the situation there. Now shares are up 5% at $71.27 as Wall St. is hoping that it also misjudged the selling pressure so far in 2013.

We have not seen any real spillover into shares of McDonald’s Corp. (NYSE: MCD) on Tuesday. It closed at $98.89 Monday and shares are down only about $0.15 after the open.

Filed under: 24/7 Wall St. Wire, Consumer Product, Corporate Governance, Food, International Markets, Retail Tagged: MCD, YUM

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Articles of Interest

Yum! Brands’ International Product Strategy: How The Double Down Went Global

March 11, 2013 Bartle Doo Leave a comment

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.

Yum's Q1 China Sales Drop 20% On KFC Chicken Probe; Shares Surge

March 11, 2013 Bartle Doo Leave a comment

By Agustino Fontevecchia Shares in Yum Brands surged in post-market trading on Monday after the company released first quarter sales data in China. The parent of KFC and Pizza Hut saw same store sales fall 20% in the two-month quarter, an improvement over their 25% estimate, fueling a rally that saw shares rise nearly 7% by 4:44 PM in New York. …read more
Source: FULL ARTICLE at Forbes Markets

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McDonald's Gives Investors a Reason to Smile

March 9, 2013 Bartle Doo Leave a comment

By Tamara Rutter, The Motley Fool

Filed under: Investing

McDonald’s served up better-than-expected same-store sales figures for February. The company released its sales report this week, which showed that global sales at existing restaurants fell 1.5%, compared with the 1.6% decline analysts had initially forecasted. The fast food chain’s same-store sales in the U.S. were down 3.3% for the month, better than the 3.5% expected drop.

At first glance, these numbers may seem trivial. However, the results provide insight into important business trends that can help investors better assess the company’s performance in markets outside the United States. This is a small step in the right direction for the world’s biggest hamburger joint. It was enough to push the stock up nearly 2% on Friday.

A recipe for profits
Menu innovation is important for Mickey D’s going forward if it hopes to keep an edge over competitors, such as Burger King Worldwide and Wendy’s . Burger King‘s re-entrance to the public market last year came complete with a menu revamp. In fact, the debut marked the biggest menu expansion since Burger King was born in 1954, according to Bloomberg.

The company’s new menu options included frappe coffees, specialty salads, and fruit smoothies. If this sounds familiar, it’s because McDonald’s pioneered these offerings in the fast-food category. As a result of increased competition in the space, Mickey D’s continues to roll out new menu options, such as the Grilled Onion Cheddar Burger and the Hot ‘n Spicy McChicken. Moreover, management said its limited-time Fish McBites offering supported February’s results.

Make no mistake: McDonald’s is still the leader in fast food. “For the first time in the history of the burger wars, the Golden Arches control more than half the category,” according to Roben Farzad at Bloomberg. Shares of McDonald’s are up more than 9% in 2013. Take a look at its price performance year-to-date compared with industry peers.

MCD data by YCharts.

The company’s international exposure could take a bite out of profits as consumer confidence wavers in major markets, such as China and Japan. Not to mention that McDonald’s and rival Yum! Brands have been under pressure in China after news broke that the restaurants served chicken with heightened levels of harmful hormones.

But the Fool’s top analyst on the company says you shouldn’t be worried by these trends.

He’ll also shed light on whether McDonald’s is a buy at today’s prices. Click here now to read our premium research report on the fast-food giant.

var FoolAnalyticsData = FoolAnalyticsData || []; …read more
Source: FULL ARTICLE at DailyFinance

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This Week's 5 Smartest Stock Moves

March 8, 2013 Bartle Doo Leave a comment

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

Business, Finance, Occupation & Industry

Taco Bell's Smearing Chipotle With Cool Ranch

March 6, 2013 Bartle Doo Leave a comment

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

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