AN UBER Holiday
Uber Eats (UBER) announces the expansion of seasonal delivery offerings with the brand new Holiday Hub category. The offering will expand and rotate seasonally throughout 2022 and beyond to accommodate various holidays. This holiday season, the category features Uber's Holiday Shop, which offers customers on-demand delivery of 2-4 foot Christmas trees and wreaths in Los Angeles, San Diego, West Palm Beach, and New York City. The partnership with Proper Companies' holiday division will also give shoppers the option to order 5-10 foot trees for pick-up. Uber Eats offers customers $20 off orders of $60+ from gifting merchants and specialty food stores to promote the new feature.
Food Distribution (CHEF)
First, USFD put up good numbers, and now UNFI. Both are supportive of our long-on CHEF. UNFI reported 1Q22 Non-GAAP EPS of $0.97 beats by $0.37; GAAP EPS of $1.25 beats by $0.77. Revenue of $7B (+4.5% Y/Y) beats by $220M. Adjusted EBITDA for the first quarter of fiscal 2022 was $189 million compared to $159 million for 1Q21. The Company expects FY2022 sales in the range of $27.8B-$28.3B vs. consensus of $28.00B; Adjusted EBITDA of $760M-$790M and adjusted EPS of $3.90-$4.20 vs. consensus of $4.09.
Share repo when you at 7x leveraged?
PLAY is a SHORT
PLAY is trading higher following the Company's 3Q21 earnings beat and a share repo. Why is a company that is 7x leveraged and not generating significant FCF buying back stock? PLAY 3Q21 GAAP EPS of $0.21 beats by $0.08. Revenue of $317.98M (+191.6% Y/Y) misses by $1.76M. Compared to the same period in 2019, revenue grew 6.2%, and comparable-store sales decreased 0.4%. In seven stores located in markets with vaccine mandates during the quarter, comparable-store sales rose 1.1%. Operating income totaled 7.7% of revenue during the quarter versus 2.2% in Q3 2019 and (51.4)% in Q3 2020. The board approves a share repurchase program authorizing the Company to repurchase up to $100M, or 6.8% of its market cap as of Dec. 7.
The outlook is mediocre: comparable store sales to be slightly positive compared with Q4 2019 due to temporary headwinds related to Special Events comparable store sales, which historically account for more revenue during 4Q21. It's easy to manage costs when you have declining traffic. When reopening happens and people come back into the stores, costs go up. In that vein, (A)EBITDA is expected to increase by 200 bps from Q4 2019, but 2022 will be a different story. The Company expects four new stores to open, and capital expenditures are projected to be $100M.
