Domino's Poised For Comp Upside
The firm noted that tougher comparisons partly weighed on Domino's unique visitor growth. However, Goldman believes traffic momentum was supported by strong traffic coming from mobile devices and the benefits of Domino Rewards and "piece of the pie" rewards.
Although wary of an inflection point if the trend continues in September, the firm raised its third-quarter comparable store sales estimate to 9.9 percent from 9.3 percent. With positive comp expectations and favorable forex marking, Goldman raised its 2016–2018 earnings per share estimates by about 1 percent to $4.18, $5.12 and $5.94. The price target on the firm's shares stand raised to $157 from $151.
Slowing 'Chipotle Benefits' Slows Chipotle
Goldman sees a sharp drop off in web/app traffic trends in August, quite expected given the substantial increase in frequency required to earn rewards. The traffic, according to the firm, though it remains elevated, is likely to be impacted by a limited app presence for ordering, payments, etc.
Consequently, Goldman trimmed its fiscal year fourth-quarter comp estimate to -21.4 percent from -18.4 percent. Citing reduced top-line and associated flow-through to store level, offset by stronger corporate cost controls, the firm reduced its 2016, 2017 and 2018 earnings per share estimate for the company by 20–38 percent to $2.26, $7.65 and $12.08, respectively. The firm also lowered its price target to $395 from $445.
Starbucks Sees Normalizing Consumer Behavior
Goldman noted that unique visitor trends at Starbucks inflected positively in August, lending credence to the company's view of normalizing consumer behavior after the loyalty shift.
Panera Up And Running
Panera, according to Goldman, has seen unique visitors spike in August, with the move speculated to have been due to a specific promotion/advertising focus. The firm also surmises that a broader 2.0 rollout has created some back to school seasonality in this metric.
At Time Of Writing ...
- Chipotle was up 0.19 percent at $401.17.
- Domino's was up 0.58 percent at $152.82.
- Panera was up 0.07 percent at $197.71.
- Starbucks was up 0.53 percent at $53.58.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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