US: Retail results, economy in focus Retailers including Home Depot (HD) and Target (TGT) will report results and key economic data will include retail sales and industrial output. Meanwhile, nine speakers from the Federal Reserve will offer their views on the economy.

F3Q10 Earnings Call

November 13, 2009 8:30 am ET

Lowe's Companies

Guidance

Analysts are looking for a profit of 24c on revenue of $11.28B. The consensus range is 22c-27c for EPS, and revenue of $11.11B-$11.6B, according to First Call.

• While they didn't want to get trapped into a number going forward, MCD had helped fund franchisees strategic leasehold improvement CAPEX--the McCafe expansion-- and might do so again for future initiatives. McDonald's owns a significant amount of the buildings and real estate, and credit is tight, even for McDonald's franchisees.

• Most every financial metric displayed--restaurant margin, franchising margin, ROIC and ROIIC--were up versus 2004 in every Division.

• The average US McDonald's franchisee unit had operational cash flow of $314K/unit last year (likely pre-debt service), and average equity of $4.7M per owner/operator. WOW !

• The MCD marketing machine is well developed,with national and local-co-ops all plugging away on multiple, supportive and complimentary brand and product themes, and a great R&D pipeline. One result is that McDonald's value menu mix percentage was only 10-11% (13-14% if you count the doublecheeseburger). Ergo, MCD doesn't run the same risk that Burger King (BKC) does by rolling the dice and putting its more limited TV behind a low end item,like the $.99 doublecheeseburger.

• MCD's early research estimated that of McCafe sales, 44% was incremental and 56% was tradeup. Either way, they win, if those numbers hold. That is one of the highest incremental gains seen in a long time.

• MCD's European average annual unit sales (AUVs) are great--$3.4M US average in Europe, $2.4M in the US and $1.8M in Asia/Pacific/Middle East/Africa. Russia was at $5.5M...wow ! No wonder the MCD company ownership ratio was highest in Russia (as it should be, because the ROI works). MCD does not refranchise to chase percentage margins--like some did (SONC)-- but does so on a disciplined basis.

• MCD's current media spending mix included 72% broadcast (down), and 12% digital (up). It is increasing its value oriented messaging next year.

MCD will be pressed to keep US same store sales positive--October was down .1%, and it's an emotionally sensitive metric. But these results overall show alot of size, scale and focus advantages.

Mr. Buehler was the Chief Executive Officer of LS Management, Inc., the owner and operator of the Lone Star Steakhouse & Saloon/Texas Land and Cattle Steak House restaurant concepts, as well as Lone Star Business Solutions, an external accounting, IT and HR provider, where he served from July 2007 to May 2009. Lone Star Steakhouse & Saloon consists of 141 company restaurants, 5 domestic franchise restaurants, and 10 international franchise restaurants, while Texas Land and Cattle Steak House consists of 28 company restaurants.

As to be expected, the Wal-Mart (WMT) operating machine was in full swing in the October quarter (full conference call transcript here). A continued focus on driving productivity throughout the organization, such as reducing the height of inventory in the stores to more efficiently operating the Wal-Mart private truck fleet helped to expand gross margin nicely year over year despite the impact of consumables deflation, resumption of higher energy prices, and aggressive pricing maneuvers.

The drama associated with Kraft’s (KFT) hostile takeover bid for Cadbury (CBY) has been widely reported in recent weeks. With Kraft’s decision earlier this week to make a formal bid that did not sweeten the terms of the original offer, it appears that we are in for several months of high-stakes wrangling before Cadbury shareholders make a final decision.

This post examines Walmart's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates. Our target for Net Income in the latest quarter was $0.83 per share, $0.01 less than the reported amount. Fewer shares outstanding caused the difference.

For the quarter, Green Mountain reported earnings per share of $0.34 which beat the 33 cent consensus estimate and represented an increase of 89% above last year’s level. Revenue was $222.2 million which also beat estimates and represents a 65% increase over last year. The third quarter was certainly a victory for the company, but looking forward the picture is a bit less optimistic.

Q3 2009 Earnings Call

November 12, 2009 4:30 pm ET

F3Q09 Earnings Call

November 12, 2009 4:45 pm ET

Q3 2009 Earnings Call

November 12, 2009 11:00 am ET

F3Q10 Earnings Call

November 12, 2009 11:00 am ET

Potential dangers: The market seems to be putting its head in the sand regarding potential AMZN landmines. The threat of an impending internet sales tax, Walmart’s pledge to start an all out price war and the slew of competitors getting into the EBook reader business has swayed most analysts not to show caution. Everybody seems to be bullish on this one, and when market sentiment is this one-sided, tops are usually imminent.

F3Q10 Earnings Call

November 12, 2009; 07:30 am ET

Q3 2009 Earnings Call

November 12, 2009 11:00 am ET