Tag Archives: Domino's Pizza Inc

Business

Stock futures are up as investors await inflation data

Leave a comment

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.

Brendan McDermid | Reuters

Stock futures rose slightly early on Thursday as investors look ahead to inflation data and earnings in the coming days that may provide insight into the future health of the economy.

Futures for the Dow Jones Industrial Average were up 32 points, or 0.11%. S&P 500 futures added 0.13%, while futures tied to the Nasdaq increased 0.07%.

The action follows a day of small ups and downs for the market as investors digested minutes from the September Federal Reserve meeting. The minutes showed the central bank expected to keep hiking interest rates until it sees receding inflation. But one comment made some think the Fed might instead slow the rate hikes, if not roll them back, if financial markets tumult continued.

The S&P 500 fell 0.33% to close at 3,577.03. The Nasdaq Composite dropped 0.09% to 10,417.10. The Dow Jones slipped 0.10%, or 28.34 points, to close at 29,210.85.

“Fed speakers similarly have, since the last meeting, been wedded to the message that their commitment remains solid, even in the face of global financial fault lines showing signs of strain,” said Quincy Krosby, chief global strategist at LPL Financial.

Early in the day, the September producer price index, a gauge of inflation that looks at final-demand wholesale prices, beat expectations. It rose 0.4% in September, more than Dow Jones’ consensus estimate of 0.2%.

Investors have more data to weigh Thursday as the consumer price index comes in the morning. Dow Jones’ consensus estimates show the CPI rose 0.3% in September, up from 0.1% in August. That would bring inflation’s annual pace to 8.1% from 8.3%.

Despite what she called a lukewarm response to PPI data and the Fed’s meeting minutes, Krosby said markets could be tested if the CPI print is higher than expected, particularly in bond yields.

Household names including Delta Air Lines, Walgreens and Domino’s Pizza will report earnings before the bell Thursday, coming as part of a week considered the start to a new corporate earnings season.

Weekly jobless claims data will also be released Thursday morning.

Read original article here

Business

Dow futures fall 170 points to start week with key inflation data, earnings ahead

Leave a comment

Traders on the floor of the New York Stock Exchange.

Getty Images

Stock futures are lower Sunday night as the markets come out of a tumultuous week and traders look ahead to key reports coming in the next week that can offer insights into the health of the economy.

Futures connected to the Dow Jones Industrial Average slid 0.6% to 29,175 points. S&P 500 futures dropped 0.7% to 3,626.25 points, while Nasdaq 100 futures slipped 0.8% to 11,014.25 points.

Market observers generally consider the week ahead as the kickoff to earnings season, with four of the world’s largest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi – reporting Friday. PepsiCo, Delta and Domino’s are also among companies reporting next week.

Inflation will also take center stage as new monthly Consumer Price Index data comes Thursday morning.

It will follow a week of whiplash for market participants. The first half brought a relief rally that pushed the S&P 500 up more than 5% in its largest two-day gain since 2020.

But jobs data that economists say will keep the Federal Reserve on a path to continue raising interest rates and OPEC+’s decision to slash oil supply rattled investors, diluting wins later in the week. When day trading ended Friday, the S&P was up 1.5% compared to where it started the week. The Dow and Nasdaq were up 1.5% and 0.7%, respectively.

Still, the Dow, S&P 500 and Nasdaq had the first positive week in the last four. All remain down substantially so far in 2022, however, and the Nasdaq is less than 1% away from its 52-week low.

Meanwhile, the 2-year Treasury yield rose 6 basis points, closing at 4.316%. One basis point is equivalent to 0.01%.

“The direction of the stock market is likely to be lower because either the economy and corporate profits are going to slow meaningfully or the Fed is going to have to raise rates even higher and keep them higher for longer,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, on Friday.

“Given the conditions that we are operating under, we believe it’s prudent to begin preparing for a recession,” he added. “The talk of a shallow recession that is now the narrative-du-jour strikes us as eerily similar to the ‘inflation is transitory’ narrative of last year.”

Last week brought heightened concerns that corporate earnings will show the ugly side of a surging dollar as Levi Strauss became the latest to cut guidance due to sliding international sales.

Read original article here

Business

Don’t ‘be a hero’ while the Fed battles inflation

Leave a comment

CNBC’s Jim Cramer on Friday warned investors against adding to their portfolios until the stock market and economy become less volatile.

“This economy is a runaway train; it’s smashed through the Fed’s blockades today, so now they may just blow up the tracks to derail the whole darn thing. When they detonate, it’ll be safe to buy. Until then, I am urging you not to be a hero,” he said.

Cramer warned that he expects central bank officials to stick to their hawkish stance on inflation, adding that the producer price index and consumer price index due next week could shed more light on the state of inflation and the Fed’s next moves.

Stocks tumbled on Friday after the September jobs report signaled that the job market is strengthening despite the central bank’s aggressive interest rate increases.

“There’s always the possibility that this is the last red-hot employment number, in which case the Fed’s tightening into an abyss and the damage could be catastrophic,” he said.

Cramer also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

Wednesday: PepsiCo

  • Q3 2022 earnings release at 6 a.m. ET; conference call at 8:15 a.m. ET
  • Projected EPS: $1.84
  • Projected revenue: $20.81 billion

Cramer said he’s hoping the company will report that its raw costs are coming down.

Thursday: Delta Airlines, Walgreens Boots Alliance, Domino’s Pizza, BlackRock

Delta Air Lines

  • Q3 2022 earnings release at 6:30 a.m. ET; conference call at 10 a.m. ET
  • Projected EPS: $1.55
  • Projected revenue: $12.90 billion

The company is likely concerned about rising oil prices, Cramer predicted.

Walgreens Boots Alliance

  • Q4 2022 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
  • Projected EPS: 77 cents
  • Projected revenue: $32.09 billion

Domino’s Pizza

  • Q3 2022 earnings release at 7:30 a.m. ET; conference call at 10 a.m. ET
  • Projected EPS: $2.98
  • Projected revenue: $1.07 billion

He said that he believes both Walgreens and Domino’s are dealing with worker shortages.

BlackRock

  • Q3 2022 earnings release at 6:15 a.m. ET; conference call at 8:30 a.m ET
  • Projected EPS: $7.64
  • Projected revenue: $4.3 billion

Cramer said he’s betting the company will report great results and that he’d be a buyer of the stock.

Friday: JPMorgan Chase, Wells Fargo, Morgan Stanley, UnitedHealth Group

JPMorgan Chase 

  • Q3 2022 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
  • Projected EPS: $2.92
  • Projected revenue: $32.13 billion

Wells Fargo 

  • Q3 2022 earnings release at 7 a.m. ET; conference call at 10 a.m. ET
  • Projected EPS: $1.10
  • Projected revenue: $18.76 billion

Morgan Stanley 

  • Q3 2022 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
  • Projected EPS: $1.52
  • Projected revenue: $13.24 billion

“With employment still red-hot, it’s entirely possible the banks can make a killing here without much risk of bad loans,” Cramer said.

UnitedHealth Group

  • Q3 2022 earnings release at 5:55 a.m. ET; conference call at 8:45 a.m. ET
  • Projected EPS: $5.43
  • Projected revenue: $80.52 billion

While he has faith the quarter will be solid, he expects the stock to decline if the company’s results are short of being perfect.

Disclaimer: Cramer’s Charitable Trust owns shares of Morgan Stanley and Wells Fargo.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

Read original article here

Business

Burger King $400 million plan to revive U.S. sales with remodels, advertising

Leave a comment

CASCAIS, PORTUGAL – Burger King signs are seen at the local fast food restaurant.

Horacio Villalobos | Corbis News | Getty Images

Burger King on Friday said it plans to spend $400 million over the next two years on advertising and renovating its restaurants as part of a broader strategy to revive lagging U.S. sales.

The Restaurant Brands International chain unveiled a turnaround plan for its U.S. business in Las Vegas at its annual franchisee convention. The investments are expected to weigh on its adjusted earnings per share for 2022 and 2023 by 10 to 12 cents annually. The company expects the investments to start paying off by 2025.

Wall Street analysts surveyed by Refinitiv expect earnings per share of $3.24 in 2023.

In the second quarter, Burger King reported flat U.S. same-store sales growth, trailing behind rivals McDonald’s and Wendy’s. The burger chain has been reporting lackluster U.S. sales over the last year, causing concern for Restaurant Brands CEO Jose Cil. In his tenure as chief executive, Cil has also spearheaded efforts to revive Canadian demand for Tim Hortons, Burger King’s sister chain.

A year ago, Cil also tapped former Domino’s Pizza executive Tom Curtis as the new president for Burger King’s U.S. and Canadian restaurants. Early changes to Burger King included slimming its menu to speed up drive-thru times and cutting down its paper coupons to push customers to use its mobile app.

Freshening up

Now Burger King is preparing to make even bolder changes. It’s planning to spend $200 million to fund remodels of roughly 800 locations. Another $50 million will go toward upgrading about 3,000 restaurants with technology, kitchen equipment and building enhancements. The company has more than 7,000 Burger King locations in the U.S.

Historically, remodeled restaurants see an average sales increase of 12% in their first year and outperform older locations over time, according to Burger King. The company is hoping that being more selective and strategic with its projects will produce even stronger sales growth, although it could take longer to see results.

“We might see remodels start to hit the market mid-2023 and going forward. It should really be a gradual ramp of the business over the course of the couple of years,” Cil told CNBC.

Burger King will also increase its U.S. advertising fund’s budget by 30% by investing $120 million over the next two years. Those investments will start in the fourth quarter.

“We expect that to start having an impact on sales over the next quarter,” Cil said.

An additional $30 million will be spent through 2024 on improving its mobile app, exceeding the digital fees that franchisees pay to the company for the technology.

Burger King’s menu will also get a facelift. The company said it’s built a multi-year blueprint for menu improvements, which include developing new Whopper flavors, betting on its Royal Chicken Crispy sandwich and investing in more employee training.

Franchisee impact

The strategy has received support from franchisees operating 93% of its U.S. restaurants, according to Burger King. Operators will be chipping in their own money alongside the company for remodels and advertising.

Curtis and his team put together a group of franchisees, representing a range of regions and experience, to come up with the strategy over the last three to six months.

“There were many long nights and plane rides,” Curtis said.

In addition to the money they get from Burger King, franchisees making upgrades to their restaurants are expected to make comparable investments to fund the projects.

The company is also changing its incentive structure to encourage operators to make more extensive remodels, which can be costly and typically require a location to be temporarily shuttered. In the past, Burger King operators who remodeled their restaurants received discounts on their advertising and royalty fees for up to seven years.

The new program will give franchisees cash once the project is completed, and let them choose how much of a discount they get on the royalties they pay to the company.

If profitability targets are met, however, Burger King franchisees will have to pay higher fees toward the advertising fund.

Read original article here

Business

Top stock picks for the second half of 2022

Leave a comment

Read original article here

Business

JPMorgan, Wynn Resorts and more

Leave a comment

Spencer Platt | Getty Images

Check out the companies making headlines in midday trading.

Casino stocks — Las Vegas Sands and Wynn Resorts saw their shares jump more than 11% and 7%, respectively, after the Macau government said the number of casinos allowed to operate there would remain limited at six. Licenses of the current operators – which include Wynn Macau, Sands China and MGM China – are set to expire this year. Shares of MGM Resorts slipped slightly.

JPMorgan Chase — Shares of the major bank fell more than 5%, dragging down the major equity averages. The sell-off came after the firm posted its smallest quarterly earnings beat in nearly two years and the lender’s chief financial officer lowered guidance on companywide returns. CFO Jeremy Barnum said on a conference call that management expected “headwinds” of higher expenses and moderating Wall Street revenue.

Wells Fargo — The bank stock jumped more than 3% after the company posted quarterly revenue that exceeded analysts’ expectations and a significant jump in profit. Results were helped by a $875 million reserve release that the bank had set aside during the pandemic to safeguard against widespread loan losses.

Citigroup — Citi shares lost 2.5% despite the company reporting a beat on quarterly earnings and revenue. However, the bank also reported net income for the latest quarter dropped 26% to $3.2 billion, citing an increase in expenses.

BlackRock — Shares of the asset manager fell 2.6% after the company reported a quarterly revenue miss of $5.11 billion, versus expectations of $5.16 billion, according to FactSet’s StreetAccount. The company beat earnings estimates, however, and grew its assets under management to above $10 trillion.

Monster Beverage — Shares of Monster Beverage fell 4.5% a day after the company revealed plans to acquire CANarchy Craft Brewery Collective, a craft beer and hard seltzer company, for $330 million in cash. The deal would bring brands such as Jai Alai IPA, Florida Man IPA, Wild Basin Hard Seltzer and others to the Monster beverage portfolio.

Boston Beer Company — The alcoholic beverage company’s shares slid more than 9% a day after the brewer cut its annual earnings outlook, citing high costs related to supply chain issues and waning growth of its hard seltzer brand Truly.

Walt Disney Co — Disney shares dropped 3.8% after Guggenheim downgraded the stock to neutral from buy, citing slowing profit growth in streaming and parks. The firm also cut its price target on Disney to $165 from $205.

Sherwin-Williams — The paint company saw its shares fall nearly 3% after it cut its full-year forecast, citing supply chain issues it expects will persist through the current quarter. Sherwin-Williams also said demand is still strong in most of its end markets.

Domino’s Pizza — Shares of Domino’s Pizza slid 2.8% after Morgan Stanley downgraded the restaurant chain stock to an equal weight rating. “DPZ still embodies many of the characteristics of a great long term growth compounder, we see limited justification for further multiple expansion, especially as DPZ’s sales growth will likely being to normalize after experiencing substantial Covid (and stimulus) benefits in 20/21,” Morgan Stanley said.

 — CNBC’s Yun Li and Hannah Miao contributed reporting

Read original article here

Business

Rapidly rising food prices may give restaurants an edge—here’s why

Leave a comment

Erick Williams, chef/owner of Virtue restaurant in Chicago’s Hyde Park, preps a beet salad on Feb. 4, 2021.

Jose M. Osorio | Chicago Tribune | Tribune News Service | Getty Images

Food prices are soaring, putting pressure on restaurants and grocery store shoppers alike.

But the cost of eating at home is climbing faster than bills for dining away from home, which could help restaurants regain the “share of stomach” that they lost during the coronavirus pandemic.

As the restaurant industry tries to bounce back from the crisis, eateries are competing not just against each other, but also against grocery stores and meal kit services for consumers’ money. In 2020, 51.9% of consumer spending on food was for at-home occasions, marking the first time since 2008 that consumers opted to allocate less than half of their food budget to away-from-home eating.

Restaurants have seen their businesses rebound since then, but the industry still hasn’t fully recovered. The latest surge of new Covid-19 cases stemming from the omicron variant could present another obstacle for eateries. Black Box Intelligence data shows that restaurant sales growth in the week ended Jan. 2 was down compared with the first half of December, suggesting that some cautious consumers may be avoiding eating at restaurants.

However, Bank of America Securities analyst Sara Senatore wrote in a note Tuesday that the gap between inflation for food at home and food away from home strengthens the value proposition of restaurants, making eating out more appealing to consumers. That could give restaurants a lift during the first half of 2022, although she expects those tail winds to peter out in the second half of the year.

According to the Department of Labor report released Wednesday, food-at-home prices climbed a whopping 6.5% over the last 12 months. Meats, poultry, fish and eggs saw the highest price increases. The cost of eating away from home rose 6% over the last year, the highest jump since January 1982.

Like grocery store shoppers, restaurants are also battling higher food costs, but they have more levers to pull to keep prices low for diners. For example, Domino’s Pizza CEO Ritch Allison said Tuesday at the virtual ICR Conference that the pizza chain is predicting its food basket costs will soar 8% to 10% in 2022, three to four times the pace for a typical year. The company plans to tailor its promotions to avoid sticker shock for consumers and maintain profit margins.

Most restaurant chains haven’t been able to avoid raising menu prices. Checkers & Rally’s CEO Frances Allen said in an interview that the drive-thru chains raised prices by 6% this summer and hiked them an additional 6% at the start of the new year. Checkers & Rally’s plans to appeal to consumers with higher-quality ingredients.

“We’re going to charge people more money, but they’re getting a better-quality product,” she said.

Read original article here

Business

Higher restaurant wages whack profits—some warn more pain is still ahead

Leave a comment

Employees prepare orders for customers at a Chipotle Mexican Grill restaurant in Hollywood, California.

Patrick T. Fallon | Bloomberg | Getty Images

Customers are returning to restaurants in droves, but workers haven’t, putting even more pressure on fast-food chains to retain market share and protect profits while navigating a tight labor market.

Restaurant executives have painted a bleak picture of staffing challenges to investors on their earnings calls in the last two weeks. CEOs like Domino’s Pizza’s Ritch Allison, Chipotle Mexican Grill’s Brian Niccol and McDonald’s Chris Kempczinski shared details on how eateries have shortened hours, restricted ordering methods and lost out on sales because they can’t find enough workers. Some chains have been hit harder by the labor crunch, like Restaurant Brands International’s Popeyes, which saw about 40% of its dining rooms closed due to understaffing.

“This is kind of where we’re separating the wheat from the chaff,” said Neuberger Berman analyst Kevin McCarthy.

Raising wages is one popular approach to staffing problems, although it isn’t a perfect solution. McDonald’s wages at its franchised restaurants have risen roughly 10% so far this year as part of an effort to attract workers. Higher labor costs have led to increased menu prices, which are up about 6% from a year ago, according to McDonald’s executives.

Starbucks plans to spend roughly $1 billion in fiscal 2021 and 2022 on improving benefits for its baristas, including two planned wage hikes. The decision reduced its earnings forecast for fiscal 2022, disappointing investors and shaving off $8 billion in market cap. But McCarthy thinks more companies should take a page from the company’s playbook and invest in their employees.

“The stock is down, but I think they’re a winner out of this. Great move on their part, long-term definitely the right decision,” he said.

McCarthy said he’s been assuming that restaurant companies are losing roughly 5 points of traffic due to understaffing.

Looking ahead to the rest of 2021 and into 2022, most publicly traded restaurants said they expect the problem to persist for at least several more quarters. Texas Roadhouse CEO Gerald Morgan told analysts on Thursday that there are “a little bit” more people in the applicant pool, but he still thinks there’s a long way to go before the company has enough employees to meet demand.

Mark Kalinowski, founder of Kalinowski Equity Research, said executives for privately held restaurant companies are more pessimistic about the timeline for the labor market’s recovery.

“Typically when you have high-level people at private companies saying this is going to get worse, it usually is,” Kalinowski said.

He has lowered estimates for Starbucks’ fiscal 2022 results and Domino’s U.S. same-store sales growth next quarter after the companies’ latest earnings reports.

“Not every company is going to necessarily see a change in the sales forecast, but the margin side of things, you got to pay closer attention to, particularly for concepts that have 100% company-owned locations in the U.S. or are significantly company stores,” Kalinowski said.

Kalinowski said he’s favoring stocks with a higher concentration of franchised restaurants. McDonald’s, for example, only operates 5% of its U.S. locations, while the rest are run by franchisees.

More restaurant earnings are still ahead. Outback Steakhouse owner Bloomin’ Brands, Wingstop and Applebee’s owner Dine Brands and IHOP parent Dine Brands are among the companies expected to report their latest results next week. Some analysts, like Wedbush Securities’ Nick Setyan, have tweaked their estimates, given the earnings reports from peer companies.

Read original article here