The Zacks Analyst Blog Highlights: McDonald's, Burger King Worldwide, Jack in the Box, Cracker Barrel Old Country Store and Krispy Kreme Doughnuts
CHICAGO, July 29, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include McDonald's Corporation (NYSE:MCD-Free Report), Burger King Worldwide, Inc. (NYSE:BKW-Free Report), Jack in the Box Inc. (Nasdaq:JACK-Free Report), Cracker Barrel Old Country Store, Inc. (Nasdaq:CBRL-Free Report) and Krispy Kreme Doughnuts, Inc. (NYSE:KKD-Free Report).
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Here are highlights from Friday's Analyst Blog:
Mickey D's Slips: 4 Other Stock Picks
Mickey-D's was among those stocks which disappointed investors this earnings week. During the second quarter, McDonald's Corporation's (NYSE:MCD-Free Report) net income increased 3.7% to $1.4 billion. Worldwide sales at the company's restaurants operating for at least a year increased 1%, in keeping with analysts' expectations.
However, earnings per share came in at $1.38, lower than the Zacks Consensus Estimate by 1.4%. Additionally, same-restaurant sales in the U.S. for the second quarter increased 1%, lower than the average analysts' estimate of a gain of 1.5%. The company also said same-store restaurant sales worldwide would remain unchanged for the month of July.
Reasons for the Decline
Europe Europe FranceSame-restaurant sales for the Asia/Pacific, Middle East and Africa (AMPEA) region also slipped 0.3%. For the U.S., sales did increase by 1%, but this was lower than the year-ago figure of 3.7%.
Big Mac's Response
The increase in domestic sales was a result of several initiatives. The iconic brand's consumers now have a variety of options to choose from on a menu which has undergone several changes. Additionally, widely publicized lower priced meals and late night breakfasts have also led to a rise in footfalls.
But the company may be facing an even stiffer battle ahead. Smaller competitors with widely differentiated offerings as well as limited time deals are continuing to beat this iconic brand at its own game.
4 Other Choices
Burger KingFirst up we have one of McDonald's direct competitors Burger King Worldwide, Inc. (NYSE:BKW-Free Report). Currently, the company is in the process of converting its business model into once in which is completely franchisee based. It's innovative 'BKDelivers' program will also boost business. This initiative is designed to deliver directly to homes, schools and offices. It will definitely improve the company's presence and increase same-store sales going forward.
Burger King holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of 15.70%. The forward price-to-earnings Ratios (P/E) for the current financial year (F1) is 23.57.
Jack in the Box
Jack in the Box Inc. JACK Free ReportHowever, such a measure is expected to improve cash flow. Besides, the company is also opening 70 to 75 new restaurants and it seems such measures will result in a turnaround. Currently JACK holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of 17.12%. It has a P/E (F1) of 23.84.
Cracker Barrel
Cracker Barrel Old Country Store, Inc. CBRL Free ReportCBRL delivered strong third quarter earnings for 2013 in June. Revenues grew 5.2%, primarily due to higher traffic and growth in comparable same store sales.
Besides a Zacks Rank #1 (Strong Buy), the company has expected earnings growth of 10.83%. It has a P/E (F1) of 19.78.
Krispy Kreme Doughnuts
With a dedicated fan base for its iconic product, the Original Glazed donut, Krispy Kreme Doughnuts, Inc. (NYSE:KKD-Free Report) is our fourth choice. The company was one of the great turnaround stories in recent times. Widely expected to post double-digit earnings in 2014, the company recently revealed that it has refinanced its secured credit facilities.
KKD also said it had retired all of the outstanding balance of its term loan. It has also started a new share repurchase program. At $50 million, this is much higher than the $20 million program which ended in 2012. The company also has a Zacks Rank #1 (Strong Buy), with expected earnings growth of 29.30% and a P/E (F1) of 31.60.
On the whole, food and beverage stocks seem to be good bets at this point. You could do worse than adding these four to your portfolio.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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