RRGB

2 Pieces of News You Never Expected on Cyber Monday

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Monday is shaping up to be a unique news day following excellent online retail sales over the holiday weekend. Amazon’s (AMZN) flying drones and Darden Restaurants’ (DRI) “Italian” burgers seem to have stolen the show today. Amazon’s Flying Drones During a 60 Minutes interview, Amazon CEO Jeff Bezos said that the firm is experimenting with fulfilling small orders using drone aircraft, a service dubbed Prime Air. In what sounds more like science fiction than a strategic endeavor, Bezos hopes the drones will allow Amazon to deliver products in as little as 30 minutes, giving its same-day efforts a boost. The “flying drone” service is scheduled to be in place within 4-5 years and will require approval from the Federal Aviation … Read more

The Big Burger Trade-up

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Casual dining chain Red Robin (click ticker for report: ) reported strong second quarter results last week. Revenue jumped 6.5% year-over-year to $238 million, just a touch shy of consensus estimates. Conversely, earnings per share surged 48% year-over-year to $0.77, easily exceeding consensus expectations. Image Source: RRGB 2Q FY2013 Slides The most positive news from Red Robin, in our view, was the robust same-store sales growth rate of 4.3%. While the firm was lapping just a 0.8% increase in the year prior period, the increase was a nice jump sequentially, underscoring the effectiveness of the company’s brand transformation. Traffic declined 0.7% year-over-year, but that was far better than the 3.1% decline experienced by the average industry competitor. The combination of … Read more

Cheesecake Factory and BJ’s Restaurants Buck the Earlier Trend

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We’ve received fairly consistent guidance from the casual dining space recently, with chains generally anticipating 1.5% to 3% same-store sales growth, countered with higher input costs. This is by no means incredibly bullish for the US economy, but we are happy to see firms looking for growth (even though the broader signals point to mediocre expansion). We aren’t fans of the space in particular, but if we see results accelerate (or slow) materially, it could be a sign of broader strength (or weakness). Earlier this week we examined the solid results and guidance from casual diners Texas Roadhouse (click ticker for report: ) and Red Robin (click ticker for report: ). The results from the Cheesecake Factory (click ticker for … Read more

Is a Casual Dining Recovery Underway?

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On Tuesday, casual dining firms Texas Roadhouse (click ticker for report: ) and Red Robin (click ticker for report: ) announced fourth-quarter results that were better than consensus expectations. This begs the question: could a prolonged slump in casual dining be nearing an end? Let’s take a look. Texas Roadhouse For the fourth quarter, Texas Roadhouse posted revenue growth of 12% year-over-year to $310 million, well above consensus estimates. The firm earned $0.19 per share, a 12% year-over-year increase and a penny better than consensus estimates. The chain also posted same-store sales growth of 4.4% at company restaurants and 4.5% at franchise owned restaurants. The firm was able to leverage this sales growth into operating-margin expansion of 70+ basis points … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more