There always seems to be restaurant news on the menu. Let's take a look at some of this week's more appetizing stories.
1. It's on the menu
There will be more numbers on the menu boards at Yum! Brands (NYSE: YUM) eateries than just the prices. The parent company behind Taco Bell, KFC, and Pizza Hut will be adding calorie counts to the boards throughout its company-owned locations.
The move will start immediately, but it will be a gradual migration. Yum expects to have the new menu boards up by the end of 2010.
It's an inevitable move for the industry. Fast food chains typically either bury the caloric tables in their websites or have pamphlets available. Visibility of the calories may shock some patrons. How many people think they're doing the right thing going for a salad, unaware of the whopping fat grams in the dressing? However, it's the best way for chains to pass on the burden of accountability to those placing the orders.
2. Kingdom comes
Fast food chain Burger King (NYSE: BKC) is also taking a step toward being more health conscious, becoming the latest player to hop on the trans-fat-free bandwagon. The world's second largest burger chain is now using only trans-fat-free cooking oils. The chain's entire menu is slated to have zero artificial trans fat come next month.
3. Will that be Obama onions or McCain mushrooms on your pie?
Pizza-delivery giant Domino's (NYSE: DPZ) wants some skin in the presidential game. The company is launching a "Pizza and Politics" poll to its online pizza tracker, hoping to get a pulse on any party-specific ordering trends.
It's a gotcha trap, of course. It encourages pro-Obama and pro-McCain pie-chewers to order through Domino's to have their votes -- and topping preferences -- heard. Domino's will also be able to generate a great deal of media buzz when it releases the results. What's next? The Palin Pizza with a side of Biden Breadsticks?
I'm not blaming Domino's. The company's marketing initiatives have been going for the cultural jugular lately with aplomb. It's been attacking Subway with its new oven-baked sandwiches, and on Monday even announced that it would give away sandwiches to the first 1,000 people named Jared to contact its PR department.
4. Chopping down the chophouses
Turning filet mignon into filleted minions, Wachovia analyst Jeff Omohundro downgraded shares of both Ruth's Hospitality Group (Nasdaq: RUTH) and Morton's Restaurant Group (NYSE: MRT). His knocks are valid on the parent companies behind Ruth's Chris and Morton's of Chicago. The high-end steakhouses are especially susceptible to an economic slowdown, as corporate travel and fine dining client wooing expenses get slashed.
The only problem I have with the double-shot downgrade is that this is old news. The stocks are already trading well below their earlier highs, each one now fetching less than $5 a share. If the assumption is that these companies will go under, the price is immaterial. However, if a recovery will eventually bring back the steak knife-wielding patrons, now would be the ideal time for patient investors to nibble on the shares.
5. Not the Applebee's of my eye
Shares of DineEquity (NYSE: DIN) took a 5% hit yesterday, after SunTrust Robinson Humphrey initiated coverage with a neutral rating. Troublesome debt levels and an unkind economic environment are the analyst concerns here.
DineEquity is still struggling to absorb the combination of IHOP and Applebee's. The saving grace, for now, is that the pancake-flipping IHOP has an impressive streak of positive quarterly comps. The plan to shift company-owned restaurants into the hands of franchisees is a good one, but it's a tricky handoff when the lending industry has stalled.
6. Earn baby earn
It's been a quiet week on the earnings front, but that won't last. Next week will treat fiscal foodies to quarterly reports out of Yum! Brands and Ruby Tuesday (NYSE: RT). The two bellwethers will shed some light on their respective categories.
Yum! Brands owns several fast food concepts. Ruby Tuesday offers a glimpse into the casual dining sector that has been struggling relative to its value-minded, quick-service cousins.
Check out this week's dessert specials:
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