PBPB

Domino’s Pizza Breaks Through Downtrend on Uber Eats and Postmates Deal

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Image Source: Domino’s Pizza is up nearly 14% on a year-to-date basis during 2023, but the company’s shares haven’t done much over the past 52 weeks. By Brian Nelson, CFA On July 12, Domino’s Pizza (DPZ) announced that it had inked a new deal with Uber (UBER) that would allow customers in the U.S. to order Domino’s food through the Uber Eats and Postmates apps with delivery provided by drivers of Domino’s and its franchisees. Domino’s Pizza continues to be a standout leader in digital initiatives across the restaurant arena, and the firm noted that the new agreement will open up Domino’s and its franchisees “to a new segment of customers and what (it) believes will be a meaningful amount of … Read more

Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports

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Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports — In alphabetical order by ticker symbol: ATRO, DIS, ETSY, GDOT, NYT, PBPB, ROKU, STMP, SVMK, TPR, TVTY — Astronics (ATRO): We are strongly considering one of our favorite small-cap aerospace suppliers after a solid showing during its first quarter, results released May 8. If you may recall, Astronics was a winner in the Best Ideas Newsletter portfolio in the past, and even with Boeing on the skids given 737 MAX crashes, we’re not shying away from considering aerospace supply-chain exposure, given the massive backlogs at the airframe makers. Astronics’ sales advanced more than 16% in the quarter, and it registered its fifth consecutive quarter of record aerospace revenue. … Read more

Comps Accelerate and Margins Expand in Chipotle’s Third Quarter

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Image Source: Mike Mozart The once beaten down fast casual restaurant chain Chipotle is back to delivering solid comparable restaurant sales growth thanks to menu price increases, and restaurant level operating margin expanded significantly as lower marketing and promotional spending was required to appease cautious consumers. By Kris Rosemann Simulated Best Ideas Newsletter portfolio idea Chipotle (CMG) reported 8.6% year-over-year revenue growth in the third quarter of 2018, results released October 25, driven by new store openings and a 4.4% increase in comparable restaurant sales. Average check moved higher from the year-ago period due in part to a 3.8% effective menu price increase but was partially offset by a 1.1% decline in comparable restaurant transactions. This weakness in traffic was … Read more

Restaurant Traffic Down, Chipotle Still a Favorite Idea

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Image Source: Chipotle (page 89 of 160) In late April of this year, we added Chipotle to the simulated Best Ideas Newsletter portfolio. By Brian Nelson, CFA We like Chipotle (CMG) for three primary reasons: 1) in CEO Brian Niccol, the company has a new bold visionary at the helm and he is hiring top talent to fill gaps, 2) buyouts in the restaurant space will only offer support for shares as the fast-casual segment remains a key focus area for private equity (here and here), and 3) Chipotle has been plagued with so many health issues (“foodborne illnesses”) in the past that, even with the recent bounce in shares, the market’s expectations are still rather low. Though our fair value … Read more

Starbucks’ Investors Are Forgetting That Coffee Costs Can Go Back Up; Shares Lack Valuation Support

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Starbucks (SBUX) has one of the strongest and most-recognized brands in the world. We think its brand name is largely responsible for it being able to charge lofty prices on its coffees and drinks, despite significant competition in each of its markets. Starbucks’ fiscal first-quarter results (ending December 29, 2013) reminded us of this solid position, which appears to be nearing impregnability given the strong pace of traffic trends and profit improvements. The coffee giant announced Thursday that it experienced 12% revenue growth during its fiscal first quarter thanks to strong holiday sales and solid store traffic, which drove quarterly revenue to a record $4.2 billion. Even though prices for its beverages are set at premium levels, the firm is … Read more

An IPO That Doesn’t Look Delicious: Potbelly

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After the extremely positive post-IPO fortune of fast food concept Noodles & Co (NDLS), the surging IPO of Potbelly (PBPB) caught our attention. Let’s take a look at the prospects of this Chicago-based sandwich chain. Background Potbelly is a Chicago-based sandwich chain famous for its toasted sub sandwiches, fresh milkshakes, and in-store musical entertainment. The concept began in Chicago’s Lincoln Park neighborhood as a toasted sub shop with eclectic decorations from the original owner’s antique shop. Current chairman and largest individual shareholder Bryant Keil purchased the original restaurant in 1996 and has since worked to turn it into a chain with 286 restaurants throughout the United States—280 owned by the company, and 6 owned by franchisees. The firm also has … Read more