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Domino's, Papa John's land in the 'doghouse' with investors last week

Earnings reports can make a world of difference in any publicly traded pizza brand's value, which Domino's and Papa John's proved last week.

February 25, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza Hut parent, Yum Brands was the only real winner on the financial markets last week, as its strongest competitor, Domino's plummeted after its quarterly and fiscal year earnings report left some investors disappointed. And there was not a lot to boost the mood among the commodity pricing trends last week, which were mostly higher. 

Cheese

Barrels closed at $1.41 and averaged $1.42 for the week, which was off about a penny, according to the U.S.D.A. Agricultural Marketing Service. But 40-pound blocks gained about 2 cents on the week too close at $1.60, which was also the average price paid for blocks last week.  

Cheese production is going strong in most of the country. Some curd/barrel producers in the Midwest relay they have ebbed production recently in order to manage inventories, and they are awaiting spring- and summer-related demand upticks before they increase production. 

Demand is mixed intra-regionally in the Midwest and West. U.S.D.A. contacts in the West report that domestic demand is healthy, and some Middle Eastern buyers have increased ordering. 

Wheat
 

Compared to last week, cash bids for wheat were lower, with export inspections for week that ended on Feb. 14, totaling 13.1 million bushels of wheat, according to the U.S.D.A. and Missouri Department of Agriculture Market News. 

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 26 1/4 cents lower, from $5.65 1/4-$5.80 1/4 per bushel. 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 20 to 24 cents lower, from $5.17-$5.18 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 22 to 22 3/4 cents lower, from $7.02-$7.02 3/4 per bushel. Portland U.S. Soft White wheat rail was steady to 15 cents lower, from $6.20-$6.35 per bushel.

Vehicle fuel

The American Automobile Association reported that last week domestic crude production and exports both set records, as gas prices continued their upward climb that started about a month ago. The average price for a gallon of regular this morning was $2.40, up 8 cents from a week ago and 13 cents from a month ago. Mid-grade ($2.70) and premium gas $2.96) followed suit, though  all grades are still lower about 10 to 11 cents lower in price per gallon than they were last year at this time. 

That was not the case, however, for diesel ($2.97) and E85 ($2.14), both of which were above last year's prices at this time of $2.96 for diesel and $2.10 for E85.  
 

Natural gas

For the seven days ending last Wednesday, Feb. 20, natural gas spot price movements were mostly higher, with Henry Hub spot prices up from $2.61 per million British thermal units (MMBtu) to $2.71/MMBtu over that period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange, the price of the March 2019 contract increased 6 cents, from $2.575/MMBtu to $2.636/MMBtu. The price of the 12-month strip, averaging March 2019 through February 2020 futures contracts, climbed 3 cents/MMBtu to $2.826/MMBtu.

Net withdrawals from working gas totaled 177 billion cubic feet (Bcf) for the week that ended Feb. 15. Working natural gas stocks are 1,705 Bcf, which is 4 percent lower than the year-ago level and 18 percent lower than the five-year (2014-18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 38 cents/MMBtu, averaging $6.75/MMBtu for the week that ended Feb. 20. The price of ethane fell by 3 percent, while prices for natural gasoline, propane, butane, and isobutane rose by 8, 9, 9 and 13 percent, respectively.

According to Baker Hughes, for the seven days that ended on Feb. 12, the natural gas rig count fell by one to 194. The number of oil-directed rigs rose by three to 857. The total rig count increased by two and now stands at 1,051.

Pizza company stocks

It was likely not a happy week for Domino's leadership when the brand's stock market value dropped relatively precipitously after the chain's earnings report left some disappointed. On the week, the mega-brand fell $20.94 in value to close Friday at 260.71. 

And in advance of its earnings call this Tuesday afternoon, the trouble-ridden Papa John's chain also lost value last week, dropping to $41.92 at the close on the Nasdaq Friday from $45.26 the previous week's close. 

The winner for the week with investors in publicly traded pizza stocks had to be Pizza Hut parent, YUM Brands, which closed Friday at $95.39, up $1.27 from the previous Friday's close. In fact, smaller bake-at-home brand, Papa Murphy's also gained again slightly last week to end Friday at $5.33, up a cent from the previous week's close. 

Photo: iStock
 

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.