Article

Commodities: Yum Brands only gainer during a tough week for pizza stocks

Aside from Pizza Hut parent, Yum Brands, last week was a pretty rough one for pizza stocks.

October 3, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Aside from Pizza Hut parent Yum Brands, last week was a pretty rough one for pizza stocks. Three of the four pizza stocks tumbled over the week while Yum's price increased. That is likely due to the news  of the brand's split from Yum China and a higher than anticipated dividend pay-out.

For other brands, trading was not so kind. In fact, the only silver lining on this particular pizza cloud is that other commodity prices, aside from auto fuel, were largely lower on the week.

Cheese:    
Cheese prices closed out the month of September lower than ever, continuing a decline that started in August. On Friday, the average price paid was $1.53, down from $1.56 a week earlier and $1.71 a month earlier. 

Wheat
Wheat was 10 cents lower to 40 cents higher on the grain markets, with the Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid 1¾  to 4¾  cents higher from 3.90¾  to 4.62¾ per bushel, according to the USDA Agricultural Marketing Service. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted. St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 6 to 9 cents lower, from 3.60-4.09 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14 to 14.5 percent protein rail, was 40.5 cents higher at 6.06¾ per bushel. Portland U.S. Soft White wheat rail was 6 to 9¾  cents lower from 4.69-4.75¾ per bushel.

Gasoline and diesel fuel
Though still lower than this time last year, gas prices are beginning to climb slightly, with the average price of a gallon of regular Monday going for $2.22, up about a cent from a week ago and 2 cents from last month, but still lower than the $2.29 this time last year. 
That same trend continued across all grades, with mid-grade at $2.49, premium at $2.72 and diesel at $2.36 a gallon — all 1 to 2 cents higher a gallon than the previous week and month. This time last year all mid-grade and premium fuels ran about 6 to 8 cents higher, while diesel was 13 cents higher a gallon last year. 

Natural gas: 
Spot prices decreased at most market locations last week, with temperatures moderating across most of the country with the transition to fall weather. Accordingly, the Henry Hub spot price fell 16 cents from $3.14/MMBtu last Wednesday to $2.98 yesterday. At the Chicago Citygate, prices decreased 22 cents, from $3.09/MMBtu last Wednesday to $2.87 yesterday.
West coast prices saw similar declines, with prices at PG&E Citygate in Northern California falling 15 cents over the report week to $3.41/MMBtu yesterday. The price at SoCal Citygate decreased 10 cents from last Wednesday to $2.99/MMBtu yesterday. 
And northeast prices also fell, hitting a record low in New York City. The northeast experienced cooler temperatures for the report week, reducing air conditioning load for the power sector but also prompting some homes to begin heating. At the Algonquin Citygate, which serves Boston-area consumers, prices went down 88 cents from $3.24/MMBtu last Wednesday to $2.36 yesterday. At the Transco Zone 6 trading point for New York City, prices decreased 64 cents from $1.50/MMBtu last Wednesday to 86 cents yesterday. Most notably, on Monday, the Transco Zone 6 New York price fell to 77 cents, the lowest average daily price ever recorded since price tracking started 18 years ago.

Pizza company stocks
It was truly a rough and tumble week for most pizza stocks last week, with all but Pizza Hut parent, Yum Brands falling in value. Domino's, for instance, slid from its Monday opening price of $153.70 to Friday's close at $151.85, during a week that saw the company's stock rise as high as $152.70.

Pizza Hut likely benefited from its parent company's split from its China holdings, as well as announcement of an increased dividend payout. That likely helped Yum Brands’ overall stock price rise from $90.15 to $90.82 over the course of the week. 

At the smaller players, like Papa John’s — which last week announced a substantial expansion in Egypt — prices tumbled from $81.60 to $78.82 on Friday. Take-and-bake chain Papa Murphy's also saw a reduction in value from $6.76 at Monday's open last week to $6.45 at the close Friday. 

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.