Please ensure Javascript is enabled for purposes of website accessibility

Yum! and Michael Kors Rise While Microsoft Names New CEO

By Jack Kramer and Nick Martell - Feb 5, 2014 at 6:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Good morning, good lookin'. Here are the three things you need to know on Feb. 5.

Still emotionally recovering from Monday's worst stock market drop in half a year? Pick yourself up, bud, toss some barrel-aged sriracha on your egg sandwich breakfast, and check out how the Dow Jones Industrial Average (^DJI 0.09%) rebounded 72 points Tuesday ahead of this week's big labor report.

1. Yum! Brands reports KFC/Pizza Hut sales drop
Chew on these earnings. The legendary proprietor of your late-night favorites KFC, Pizza Hut, and Taco Bell, Yum! Brands (YUM 0.07%) reported $4.18 billion in revenues last quarter, topping analysts' expectations -- but investors felt a bit sick about the 4% same-store sales drop in China and 2% drop here in the United States. 

The big news that you've been hungry to hear about is the cheesy change coming to Pizza Hut. Yum! took the earnings report opportunity to announce that to better compete with your greasy neighborhood pizza chain (we're fans of Rhode Island's famous Nice Slice), Pizza Hut will start experimenting with "by-the-slice" sales this year.

The takeaway. is that the Yum! earnings report wasn't stellar, but it was a big improvement from the international PR disaster of the past two years. Since 2012, news of the avian flu virus and of chicken suppliers using unapproved antibiotics left investors wishing they had a happy meal. The outlook for 2014, though, showed no signs of any such Asian freaky avian fears, so the stock traded up 9% Tuesday.

2. Microsoft names new CEO
Microsoft
(MSFT -0.92%) is passing the torch to the third CEO in the company's history. The search to replace 14-year CEO Steve Ballmer, who five months ago announced he would step down, is finally over. The Indian-born Satya Nadella is the new top dog of old tech. 

Cloud computing is Nadella's specialty, which hints at what the future focus may be for the founder of Windows and the Microsoft Office paperclip helper thing. The company even giftwrapped a specially sleek welcome page on the company website. Nadella is a longtime company insider and a solid pick to quarterback this team. Analysts, however, referred to it as a "safe move," and the stock barely moved Tuesday.

You can't talk about Microsoft without mentioning Bill Gates. The co-founder of Microsoft and CEO for more than 20 years is actually getting more involved again, as the new "Technical Advisor." (Hasn't he been advising Microsoft on technology virtually his entire career?) This new official title may seem like a demotion from his past two jobs at Microsoft -- CEO and, most recently, chairman of the board -- but he's still going to be a regular board member, and this new role will let him get involved in product development again, like the good ol' days.

3. Michael Kors earnings lookin' fresh
Now that's a fancy earnings report. Shares of logo-lovin' fashion designer Michael Kors (CPRI 2.80%) surged more than 17% Tuesday after the company's revenues rose nearly 60% from the same time last year on $1 billion in sales last quarter. (Instead of buying your girlfriend an MK handbag, you probably should have bought her the stock.)

The takeaway is that the American holiday shopping season wasn't too kind to American retailers such as Macy's and Coach. But with Michael Kors' nearly 98 new stores over the past year and growing "brand awareness" in Europe for the gold "MK," the company predicts sales of $3.2 billion for all of 2014. Your move, Tory Burch.

Wednesday:

  • The January ADP employment report
  • Fourth-quarter earnings: Merck, Walt Disney, Yelp

MarketSnacks Fact of the Day: Australians gamble (and lose) more than anyone else worldwide on a per-person basis.

As originally published on MarketSnacks.com

Nick Martell and Jack Kramer have no position in any stocks mentioned. The Motley Fool recommends ADP, Coach, Michael Kors Holdings, Walt Disney, and Yelp and owns shares of Coach, Microsoft, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,832.54 (0.09%) $29.07
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$280.32 (-0.92%) $-2.59
Capri Holdings Limited Stock Quote
Capri Holdings Limited
CPRI
$50.99 (2.80%) $1.39
Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
YUM
$118.50 (0.07%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.