Restaurants/Pubs

Too many cooks spoil UK restaurants’ broth

29 April 2016

Shares of the Restaurant Group, owner of the Chiquito chain, dropped a fifth after it warned of slower sales, hit by lower footfall in shopping malls. The sector is also gorging on overexpansion. New stores are opening at twice the speed of consumer spending on eating out. 

Chipotle pay a few ingredients short of a burrito

17 March 2016

The U.S. fast-food chain is tying 2016 equity bonuses exclusively to its share price after a food poisoning fiasco consumed $9 bln of market value. It’s too simplistic, encourages bosses to think short term and fails to address all-important qualitative food safety concerns.

An activist loss marks a win for all shareholders

16 March 2016

The board at U.S. restaurant chain Bob Evans, a third of which was installed by pushy investor Thomas Sandell, nixed his call for a breakup. The law demands fealty to the company first. Seeing representatives of aggressive owners take that duty seriously is a reassuring sign.

Refreshing candor springs from Jack in the Box

18 February 2016

The fast-food chain isn’t blaming currency, the weather or other such issues for an earnings miss that sent its stock slumping 18 pct. It’s being much more forthright: the new all-day breakfast from rival McDonald’s whacked prices. Such honesty is rare – and is to be applauded.

Cox: Two signs of M&A bacchanal’s last hurrah

1 December 2015

The boom just topped $4 trln, helped along by one telltale massive deal and another much smaller one. Pfizer’s takeover of Allergan is clearly predicated on exploiting tax loopholes while a U.S. retailer is getting into the pizza racket. Both indicate a cycle well past its peak.

Yum split offers value with chance of aftertaste

20 October 2015

The KFC parent will hive off its troubled China business into a separate traded company - as suggested by activist Corvex. It’s logical: the two parts are effectively separate already. The catch is that the U.S. unit will still share Chinese growth risks, but without the control.

Fat Americans inflate peculiar stock market bubble

17 June 2015

Restaurant IPOs are hot, with chicken-wing outlets soaring to dizzying valuations. So are attempts to deal with obesity. Fitbit’s launching a $3.7 bln float. A loss-making double-chin reduction specialist got a $2.1 bln bid. It all gives new meaning to “overweighting” stocks.

Shake Shack unveils a cluckin’ $250 mln sandwich

21 May 2015

The value of Danny Meyer’s upscale burger chain shot up 8.5 pct, seemingly on news that it may start outlets serving up chicken-based fare. Investors seeking signs of exuberance in wearables might do better looking at edibles. Shake Shack is now worth 550 times earnings.

McDonald’s wage hike portends shareholder diet

2 April 2015

S&P 500 buybacks and dividends set a new record at $900 bln in 2014. But as U.S. unemployment falls, firms like the fast food chain are beginning to invest in workers. Higher pay costs, along with higher interest rates, could thin the wads of cash companies hand investors.

Starbucks Venti cup is half full

30 October 2014

Sales at the $60 bln coffee chain’s established locations increased less than expected. Even so, 10 pct revenue growth is a problem the likes of McDonald’s would love to have. Savvy marketing and smart acquisitions should help Starbucks keep pace with changing consumer tastes.

McDonald’s needs some time on Burger King’s grill

3 September 2014

The $91 bln giant isn’t growing. And the stock lags its rival’s. Winning burger lovers alienated by BK’s planned move to Canada would add little special sauce to McDonald’s sales. But a serving from the smaller company’s fat-trimming menu would please shareholders more.

Red Lobster sale leaves fishy smell at Darden

16 May 2014

The restaurant conglomerate is selling its floundering seafood chain for $2.1 bln, pre-empting a non-binding vote on the separation forced by activists. Engaging with agitators doesn’t always bring harmony – ask Sotheby’s – but Darden’s siege mentality exposes its board and CEO.

From Ally to Zoe’s, IPOs hint at back to basics

15 April 2014

Investors had an appetite for most any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of sellers, including Moelis and Weibo, may encounter a more rational market than expected.

All-you-can-eat democracy may sicken shareholders

24 February 2014

An activist wants investors in $7 bln U.S. restaurant group Darden to be allowed a vote on a spinoff of Red Lobster. It’s a big step from giving all owners a say on governance matters to second-guessing strategic ones. Too much direct intervention could do more harm than good.

April Fool’s comes early to comical M&A market

6 February 2012

It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.

Dunkin’ IPO extends bubble thinking beyond tech

27 July 2011

The doughnut chain's shares surged in their debut even after pricing over the range. Its valuation of 17 times EBITDA isn't as silly as the sales multiples fetched by LinkedIn or Pandora. But a premium to Starbucks is undeserved. Investors are overexcited about perceived growth.

Food inflation favors corporate strongmen

27 May 2011

Fickle weather, decreasing farmland and more mouths are pushing up prices of wheat and other soft commodities. Companies are now being forced to pass along these costs to consumers. Big brands and proactive market leaders, like McDonald's and Pepsi, stand to brave the storm best.

Nelson Peltz flubbed his $2.3 bln fast-food order

20 January 2011

The activist investor wants to unload the Arby's sandwich chain, which he used two years ago to buy rival burgerflipper Wendy's with the promise of extracting juicy synergies. That didn't happen and may have cost shareholders. But he may still wind up with the better business.

Dunkin’s financial story still has holes

16 November 2010

Nearly five years after devouring the U.S. doughnut maker in one of the era s most highly leveraged buyouts, private equity owners are refinancing $2 bln of debt and collecting a dividend. Yet strong growth can t glaze over ongoing concerns. Dunkin is still geared to the brim.

Burger King swaps buyout barons for private equity

2 September 2010

The capitalists behind Anheuser InBev are relieving TPG, Bain and Goldman of command of the fastfood chain for $4 bln. While the sponsors relied on typical financial engineering, BK's new Brazilian owners have a grander plan: to do for burgers what they did for beer.