McDonald’s super-sizes its faith in the Windy City 13 Jun 2016 The Golden Arches’ move from the suburbs to Chicago proper shows tech and finance aren’t alone in seeking big-city talent. It’s not just another sign of urbanization. It’s a vote of confidence in the junk-rated city, though Mayor Rahm Emanuel still has his work cut out for him.
Turnaround whizzes 3G could shake up diversity too 13 Jun 2016 The Brazilian investors aim to revitalize stodgy brands like Burger King. There’s work to do on their boards, though. The restaurant holding company’s all-male lineup looks very 20th century. A shareholder failed to force action, but 3G risks distraction if it doesn’t catch up.
Digesting Krispy Kreme may require more sweetener 9 May 2016 JAB has baked a 25 pct premium into its $1.4 bln offer to take the donut maker private. The billionaire-backed owner of coffee sellers Keurig and Peet’s should be able to boost sales and margins. But Krispy Kreme may prove too appetizing for others to pass up without a fight.
Too many cooks spoil UK restaurants’ broth 29 Apr 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 Mar 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 Mar 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 Feb 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 Dec 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 Oct 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 Jun 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 Apr 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 Oct 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 Sep 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 Apr 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 Feb 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 Feb 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 Jul 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.