QSR

Darden: Can Full-Service Win?

Magic Markets2024-06-26T21:21:27+02:00

Darden Restaurants is a full-service restaurant group, which means they are scaling a business model that doesn’t like to scale. This gives them plenty of runway for growth in a fragmented market, but it means that nothing comes easily. Still, through a combination of organic growth and acquisitions, the business has pulled off decent returns. Does pressure in the restaurant industry offer an attractive entry point, or is this wise to avoid for now?

Darden: Can Full-Service Win?Magic Markets2024-06-26T21:21:27+02:00

Recap: Starbucks

Magic Markets2023-09-21T08:56:20+02:00

We’ve covered Starbucks before, the world’s most famous coffee shop chain despite strong focus on the US and China and a lesser footprint outside of those countries. Succession planning has been the Achilles' Heel of this story, with Howard Schultz having returned to the top job for the third time when we covered the stock back in March 2022. The stock was trading at $88 and we were pretty bearish. Now at nearly $97, that’s roughly a 10% return in 18 months. While it may be a timing issue, that’s actually beaten the S&P 500 index over that time period. What happened that beat our expectations? Welcome to Magic Markets Premium.

Recap: StarbucksMagic Markets2023-09-21T08:56:20+02:00

McDonald’s: Supersized

Magic Markets2023-08-23T23:14:56+02:00

There are 40,800 McDonald’s restaurants in the world - that’s a lot of Big Macs! Every quarter, there are more golden arches in the world helping people forget their problems with a strong dose of calories. At group level, McDonald’s is a marketing and product design company, rolling out ideas and learnings to a footprint that is heavily skewed towards franchise stores. With a long-term share price performance that beats the S&P500, it’s a strategy that works... but is it worth a buy at current levels?

McDonald’s: SupersizedMagic Markets2023-08-23T23:14:56+02:00

Yum! Brands: Finger Lickin’ Growth

Magic Markets2023-02-16T00:48:06+02:00

Use the podcast player below to listen to our discussion on Yum! Brands and its Q4'22 result, which accompanies the detailed write-up below: (Date of report: 16 February 2023) There’s an exclamation mark in Yum! and with good reason, as this is the world’s largest restaurant company with over 55,000 venues across various brands where you can get your calorie fix. With a footprint in 156 countries and 98% of the restaurants belonging to franchisees, this is fast food at scale. Clearly, a lot has happened in the 25 years since Yum! was spun-off by PepsiCo. At that time, Yum! was [...]

Yum! Brands: Finger Lickin’ GrowthMagic Markets2023-02-16T00:48:06+02:00

Starbucks: Triple Espresso

Magic Markets2022-06-21T19:22:30+02:00

Use the podcast player below to listen to our discussion on Starbucks and its Q1’22 result, which accompanies the detailed write-up below: (Date of report: 23 March 2022) Americans are really good at building global brands. There are coffee shops everywhere in the world, yet Starbucks is the only truly global coffee brand that is recognisable in all major countries. Thanks to deals with the likes of Nestle and PepsiCo, you'll also find the brand at your local grocery store. But it's not just the coffee that is brewing at Starbucks. There's a labour problem brewing as well, with the risk [...]

Starbucks: Triple EspressoMagic Markets2022-06-21T19:22:30+02:00

Magic Markets Ep68: Burgers and fairy tales

Magic Markets2022-03-27T14:03:30+02:00

Burgers and fairy tales. These are the things that people like to invest in. No, really. In this episode of Magic Markets, we take a step back and discuss two investment themes that we find interesting. The first is the quick-service restaurant (QSR) industry, which commands premium valuations in markets across the world. There are global giants and regional powerhouses, with examples on the JSE as well as in international markets. We discuss the different types of models followed, along with concepts like franchise vs. corporate-owned models and the benefits of each strategy. We then move on to the art of [...]

Magic Markets Ep68: Burgers and fairy talesMagic Markets2022-03-27T14:03:30+02:00

Magic Markets Ep36: Overweight Food

Magic Markets2021-10-03T13:38:30+02:00

The quick-service restaurant (QSR) sector has been a clear winner globally under lockdown conditions. When you're worried about catching a virus, a pizza served to your car window is more appealing than a sit-down restaurant. The Domino's and Chipotle share prices have increased sharply. However, the threat of food delivery apps cannot be ignored, as the value chain in this industry is far from settled. In episode 36 of Magic Markets, hosts The Finance Ghost and Mohammed Nalla (Moe-Knows) complain about their waistlines while commenting on the restaurant sector and the competitive realities in that space. It's a fun episode with plenty to learn about [...]

Magic Markets Ep36: Overweight FoodMagic Markets2021-10-03T13:38:30+02:00

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