Notable news items over the past few days and price action from Friday.
- MCD may raise prices at its China outlets in the second half of the year, according to Tim Fenton, President for Asia, the Middle East and Africa.
- MCD is being sued in the U.S. by a woman claiming that she was injured after chewing on a “large shard of glass” inside her spicy McChicken sandwich.
- SBUX said on Sunday that it plans to announce a new product for the single serve market “in the near future. I posted a note last night detailing my take on Starbucks’ direction. My “coffee” strategy remains to be long SBUX and PEET and short GMCR.
- I also posted a note last night titled, “THEY SEE INFLATION” on the news that SYY has raised prices as inflation takes hold. The company's announcement cited produce shortages as being a major headwind. This is acutely relevant for restaurant companies with high levels of exposure such as CMG.
- PNRA outperformed the restaurant space, albeit on slowing volume, following the company’s 4Q earnings call during which they outlined guidance in excess of Street expectations.
- COSI gained on accelerating volume, its share prices closed up 6.2%.
- CMG also saw its shares rise following 4Q earnings. Despite management’s cautious outlook and the company’s vulnerable position from a commodity exposure perspective, the stock’s initial reaction was positive.
- KONA and CPKI gained on strong earnings results. Casual dining stocks generally gained on Friday, with the exception of MRT and CAKE.
- CAKE reported a low-quality earnings beat on Thursday after market close.