Consumers Still Love Pizza and Doughnuts

Steve Kanaval  |

If you break down the Restaurant Sector for Q1 2015, you’ll find a clear message: the consumer still adores pizza and doughnuts. Earnings and profitability are also telling you that cold weather helped domestic sales for three companies who specialize in the comfort foods – shares of Domino’s Pizza Inc. (DPZ) , Papa John’s Int’l Inc. (PZZA) and Dunkin’ Donuts (DNKN) led restaurant stocks higher today as the group all reported strong earnings.

There were a variety of drivers for the group ranging from currency effects to food costs, but the consumer seems intent on buying coffee, doughnuts and pizza as staples. It was little surprise that the breakfast wars diluted pedigree fast food companies like McDonald’s Corporation (MCD) and owner of Taco Bell and KFC Yum! Brands, Inc. (YUM) , both of which are vying for breakfast market share. Below are some stocks in the sector:

Dunkin Brands Group rose $3.82, or 8.0%, to $51.54.

Chipotle Mexican Grill Inc. (CMG) fell $0.23%, to $641.00.

Darden Restaurants, Inc. (DRI) rose $0.39 or 0.6%, to $65.59.

Domino's Pizza Inc. rose $9.01 or 9.0%, to $108.81.

McDonald's Corp. fell $0.76 or 0.8%, to $97.08.

Panera Bread Co (PNRA) rose $1.66 or 0.9%, to $183.25.

Papa John's International Inc. rose $2.64 or 4.3%, to $63.99.

Starbucks Corporation (SBUX) rose $0.81 or 1.7%, to $49.14.

Wendy's Co. (WEN) rose $0.14 or 1.3%, to $10.58.

Yum Brands Inc. fell $0.07 or 0.1%, to $83.98.

Chipotle Mexican Grill has been trading is lower today at $640 down slightly. More importantly, though, it has been the darling of many portfolio managers since 2012, rallying from $240 p/s to over $700, and until recently has been a core long position for anyone trading the sector.

Today, however, it has shown signs of topping in 2015, as it tests its recent lows with today’s trading activity, as all eyes stay on the $600 level, looking for any close below this important floor. Today’s action from the pizza and doughnut makers is further sign that the sector may have a changing of the guard, and is a sector to watch as the bull market stumbles forward.  

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CMG Chipotle Mexican Grill Inc. 465.87 -6.89 -1.46 674,776 Trade
DPZ Domino's Pizza Inc 252.07 -12.55 -4.74 791,503 Trade
DNKN Dunkin' Brands Group Inc. 71.26 -1.96 -2.68 964,364 Trade
YUM Yum! Brands Inc. 88.13 -0.76 -0.85 2,565,297 Trade
MCD McDonald's Corporation 186.72 -0.87 -0.46 3,745,905 Trade
SBUX Starbucks Corporation 67.91 -0.25 -0.37 10,855,387 Trade
WEN Wendy's Company (The) 17.94 0.15 0.84 8,391,034 Trade
DRI Darden Restaurants Inc. 113.46 1.60 1.43 1,460,704 Trade
PZZA Papa John's International Inc. 57.41 -1.51 -2.56 881,143 Trade

Comments

Emerging Growth

Goldrea Resources Corp.

Goldrea Resources Corp is engaged in the acquisition, exploration and development of mineral properties located in North America.