CBRL

Turnaround Plan at McDonald’s Does Not Fly With Franchisees

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Image Source: Mike Mozart Things haven’t been going well at McDonald’s (MCD), and they might not get better anytime soon. McDonald’s initial turnaround plan, released May 4, left a great deal to be desired. Though the major points of the plan seem to be improvements, there was a lack of detail about how to fix the restaurant’s menu issues while improving service speeds, two major areas of concern we have with the fast-food giant. Nevertheless, management is confident that its efforts will return the company to an industry leader, as it works toward its goals as a modern, progressive burger company. We’re not so sure. Starting on July 1, the firm’s organizational structure will be revamped. It will group the … Read more

10 Bucks per Hour; What It Really Means

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Source: US Department of Labor, Walmart Walmart (WMT) is quite savvy. The big box retailer announced February 19 it would raise the minimum wage for all of its US workers to $9 per hour in April of this year and at least $10 per hour by next February. The move comes amid ongoing public scrutiny of its labor practices, elevated worker turnover, and general malaise among the ranks on social media platforms. At face value, the news headlines show Walmart caving to public pressure, and a win for big labor, but in reality, the retailing giant is merely doing what good businesses do – pleasing customers (which are its workers, too) and widening its economic moat. Hiking wages accomplishes both. … Read more

Yum! Brands’ KFC in a Lot of Trouble

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There was a time when Yum! Brands’ (YUM) KFC dominated the US chicken market, but those days are over.  Privately-held Chik-fil-A’s roots date back to the 1960s in Atlanta, but the company has gradually become the largest (yes, the largest) quick-service chicken restaurant chain in the US, based on domestic annual sales over $5 billion (with over 1,850 locations in 41 states and Washington D.C.). Chik-fil-A’s sales levels are better than Popeyes’ (PLKI) comparatively-modest ~$200 million in revenue and Yum! Brands’ ~$3 billion in revenue at its entire US division. Very few investors know about privately-held Chik-fil-A’s continued success in the states, and the firm’s growth is not slowing. From Chik-fil-A’s adorable cow campaign, ‘Eat Mor Chikin,’ where self-interested cows … Read more

Holy Guacamole! McDonald’s Wishing It Had Kept Chipotle

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Very few investors probably remember that Chipotle (CMG) used to be owned in part by McDonald’s (MCD). McDonald’s had originally taken a stake in Chipotle in February 1998, when Chipotle had but 14 restaurants in Denver. The maker of the Big Mac would go on to own 90% of the subsidiary and eventually spin it off in an initial public offering in January 2006. McDonald’s would receive ~$1.5 billion from the sale, but with Chipotle’s market capitalization now at over $20 billion, it’s clear the burger-and-fries behemoth exited way too early. The most recently-reported results by both restaurants tell the diverging story quite well. McDonald’s reported relatively disappointing second-quarter results Tuesday. The performance can best be described as flat. Global … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Restaurant Industry Update

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The fast-food (quick-service) breakfast wars have intensified. It has become a high-stakes game for all participants, and most have gone all-in to capture market share, to use poker parlance. The NPD Group, a leading global information firm, noted that the pace of expansion for fast-food breakfast across the restaurant industry has been a key bright spot, and executives across the industry are taking note: Quick service, which accounts for about 80 percent of total restaurant morning meals, showed the strongest increase in breakfast visits of all restaurant segments with a 4 percent increase in the year ending December 2013 period compared to year ago, reports NPD CREST, which every day tracks how consumers use restaurants and other foodservice outlets. Morning … Read more

Biglari Wants to Create More Value at Cracker Barrel

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Country-style restaurant and retailer Cracker Barrel (click ticker for report: ) posted decent fourth-quarter results Wednesday morning that were overshadowed by a wide guidance range and a letter from its largest shareholder, Sardar Biglari. With the firm lapping a 53-week fiscal year, total revenue declined 4% year-over-year to $674 million, modestly exceeding consensus expectations. Earnings per share, adjusted to reflect comparable time periods, increased 19% year-over-year to $1.43. For the full-year, the firm earned $4.90 per share, an increase of 11%. Cracker Barrel generated roughly $135 million in free cash flow, equal to 5% of total revenue. Comps are Modest Source: Company Filings, Valuentum Biglari Wants a Big Dividend Sardar Biglari, CEO of Biglari Holdings (BH), which is Cracker Barrel’s … Read more

Dividend Increases for the Week Ending June 7

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Below we provide a list of firms that upped their dividends for the week ending June 7. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week Acme United Corporation (ACU): now $0.08 per share quarterly dividend, was $0.07. Altera Corporation (ALTR): now $0.15 per share quarterly dividend, was $0.10. Concurrent (CCUR): now $0.12 per share quarterly dividend, was $0.06. Cracker Barrel (CBRL): now $0.75 per share quarterly dividend, was $0.50. DuPont Fabros Technology (DFT): now $0.25 per share quarterly dividend, was $0.20. FEI Company (FEIC): now $0.12 per share quarterly dividend, was $0.08. Helmerich & Payne (HP): now $0.50 per … Read more