Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Fast-Food Earnings Preview

Details

  • Description

    Miller Tabak & Co. Stephen Anderson gives his outlook for fast- food earnings.

  • Duration 4:41
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Very nice little -- right now.

We'll get -- national employment this year have -- of majority of restaurants to report positive same store sales the question now though.

Will that help.

First quarter earnings a lot of names still to report this week Yum! Brands after the bell today.

To -- latest tomorrow McDonald's can't finish out the week before the market opens on Friday you're the previous above -- could expect.

Stephen Anderson restaurant analyst with Miller -- that it's nice to have you on the show you have not it's a fastening sector at one of the most fascinating is the fact that group the group over here in the year over year has seemed -- -- rise about 23%.

Let's -- that to any other group of it in the retail sector that's a nice number.

It's an enviable place to be certainly mild weather in the first quarter of the year we have temperatures where you can -- 6% to six degrees above average certainly -- the sector.

But beyond that whether we think there's some fundamental improvement going on to -- in GDP and and payroll gains that are feeding into restaurants else.

Yeah I mean look at a lot of these names may have to raise prices we're gonna get to that but let's focus in particular -- Paula because that is the stock you cover.

A heavily year over -- revenues of 23%.

At chipotle it has been one of the stars if you well.

Of the sector but do you think if they can continue to deliver on revenues with commodity costs the way they are with gasoline prices going higher particular for the summer months are you concerned at all.

Well that's an excellent question what's happened in the last few quarters -- -- action has raise prices near three to 4%.

Even with that there's been some traffic gains with -- -- and that's why -- performed so well over the past twelve months.

Our concerns that is not with the fundamentals which remains strong but -- -- with valuation.

At 39 times our forty PS estimate.

I think you'd have to see double digit comp gains in every quarter -- quarter of 2012 and that's going to next year from its who's saying that valuation.

Do you say is to probably is main competitor right now could should they be worried about half there well I think -- -- directly I think there's a number of our regional competitors is also some smaller chains like -- was on my Jack in the Box.

Most southwest well Baja Fresh -- those are private and disease.

Okay not even -- not a McDonald's -- not that.

Different category you're not really I do know that you asked the fast service in exactly young actually has has put horizon menu items that are designed to compete with Dutch fully but I don't think anyone eleven confused talk well -- -- -- They don't -- -- number of McDonald's but I wanted to show our viewers the stock performance again plane back to the fact that the restaurant sector overall -- had a heck of a year if you look at the share prices these names.

What a job I mean young that we're looking at that stock is up 43% over the last year to -- away.

-- 52%.

Over the last year McDonnell 125%.

You think the group that they can keep this run up.

Well let me take a look at out what's on with the young much China actually.

Had 21% same restaurant sales -- back and fourth quarter.

And I think this is where analysts will be looking at as they report earnings tonight.

And touchy about overall these companies are hiring.

Do -- hiring segment on the other network and I usually look at companies that are growing and I've seen a lot of hiring in this particular -- these are lower paying jobs.

Which is unfortunate for many Americans but at the same time this group is hiring what do you attribute that to.

Well I think it goes back to the supply and demand and people didn't are demanding the brands that.

You know really address at people's needs -- -- has been -- we thing's been we're in this area McDonald's fairly they have high profile 50000.

Employee.

I've been MB recently cell was its us certainly it's -- change that they're doing was it and of rising tide is not lifting all boats cover his case of -- -- -- breaking group by the way is planning to IPO right Republican who went off the markets and other public again it's always fun to watch is names.

Political -- before I let you go beloved went to analysts right now have a hold on the Stuckey yourself have a hold on the -- is that I didn't that they can say.

During the earnings call when the report comes out the will change your mind me to put a virus almost.

Well I think the key to sustained valuation is again is that we -- -- -- And I think it -- if they're going to announce any follow up menu price increases for the second half of the year.

I certainly it so far that the traffic has sustain itself but.

Those that things -- we looking at and think also there any.

Acceleration -- national expansion will indicate.

You didn't they can actually make that make this work exit and internationally well they have three stories hasn't had a right now and -- if you -- -- Europe.

You they had the greatest presents another offering brown rice.

Many thanks for three possible for the stock -- LC Stephen thank you very much for coming and Steven Anderson militant back restaurant analyst there.

Load More