The PLAY Hail Mary
PLAY is a SHORT
While many investors like the PLAY business models due to the high-margin games business, we have a different view. The gaming segment of the business model is highly capital intensive, cyclical and traffic trends are at the mercy of what is the current hot game. We continue to be bearish on PLAY and view the acquisition of Main Event as a distraction from the fact that the core Dave & Busters concept was in a secular decline. The deck next Friday will focus on the following themes:
CALL DETAILS:
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SBUX to sell UK stores?
SBUX UK's business has been challenged for years, and given the company is going thru a complete overhaul, why not re-franchise the balance of the stores.
SBUX has faced increased competition in the UK from thousands of new independent operators, Costa Coffee (KO) and Pret A Manger. It's not surprising that the company might be looking to franchise its 300 company-owned stores. The pandemic has altered the business model with significant inflation, and a slow return of workers to the office in metro centers has also hurt profitability. According to the Times Of London, the company has asked Houlihan Lokey to gauge interest for the UK stores, which include more than 300 stores of the 1,000 stores in the market. The latest development with Starbucks adds more intrigue to what should be an exciting earnings call and analyst meeting.
YUMC to pay a dividend?
Yum China (YUMC) announced, in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (HKEX), which require advance notice of board meetings at which a dividend is expected to be declared, that its board will consider the declaration and payment of a quarterly dividend. If the board decides to proceed, the declaration will be adopted by Board resolution on or around July 29, 2022, and will be disclosed immediately by the company. However, there is no resolution that the dividend will be declared.
