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Domino's stock value dives, but so do cheese, wheat, natural gas prices

Pizza chain investors showed Domino's their disappointment with the brand's lackluster Q2 financials last week, reining in the brand's stock value to the tune of a more than $24 drop in Domino's stock value in trading last week on the New York Stock Exchange.

July 22, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

The world's first- and second-bestselling pizza brands acted as counterweights to each other in trading last week, with top-selling Domino's pushing downward in price after disappointing second-quarter financials, while No. 2 Pizza Hut and its parent, Yum Brands, rose in value  over the week's trading. All pizza restaurateurs, however, stand to benefit from lower prices paid for pizzeria staples, with everything from cheese to oven fuel trading lower last week.  

Pizza company stocks

Domino's woes continued after its lackluster second-quarter financial report, as the pizza chain watched the value of its stock plummeted $24.18 over the week's trading to close Friday at $257.93. Papa John's also watched its value falter, though nowhere near that amount. The stock closed Friday at $45.41, down 51 cents from the previous Friday's close of $45.92.
The winner among the large publicly traded pizza chain stocks last week though was Pizza Hut, which saw the value of its parent company, Yum Brands, grow $1.48 over the week's trading activity, closing Friday at $112.53.

Cheese trading

In cheese trading last week on the Chicago Mercantile Exchange, the average price of barrels fell 6 cents to $1.70, while blocks dropped 5 cents on average for the week to $1.78. Barrels closed Friday at $1.71, while 40-pound blocks closed at $1.78, according to the U.S.D.A. Agricultural Marketing Service. 

As you might expect, the nation's rising temperatures last week have started to noticeably affect farm milk output, which made Eastern and Midwestern milk availability for cheese production scarcer last week. But, demand for cheese is down slightly, according to the service, so cheese market prices have slipped some.

Wheat markets

Compared to last week, cash bids for wheat were mostly lower, though Dark Northern Spring Wheat held firm, according to the U.S.D.A. Hard Red and Sort Red Wheat was 26 cents to 35 1/2 cents lower, while Dark Northern Spring Wheat was 3/4 of a cent, to 5 3/4 cents lower. Soft White Wheat was unchanged to 7 cents higher.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 35 1/2 cents lower, from $5.17 3/4-$5.27 3/4 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 26 to 28 cents lower, from $4.93-$4.94 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5% protein rail, was 3/4 to 5 3/4 cent lower, from $6.15 1/2-$6.20 1/2 per bushel. Portland U.S. Soft White wheat rail was steady to 7 cents higher, from $5.75-$6.20 per bushel.

Vehicle fuel prices

U.S. gasoline prices have shot up an average of 8 cents in just over two weeks to an average of $2.79 today, as crude oil prices and demand have also increased, while gas stocks have dropped, according to the American Automobile Association. But the good news is that Hurricane Barry, which made landfall in Louisiana last week, had little impact on the national average gas price.

The highest prices paid last week were in the Midwest, with Indiana leading the pack with a 15-cent jump in price over two weeks. The South fared best, with Mississippi reporting the nation's lowest gas prices of $2.40 last week. 

Today's average price for a gallon of regular was $2.77, according to AAA, which is still below last year's average at this time of $2.84, but up 11 cents from a month ago. That trend held across mid-grade ($3.09) and premium ($3.34), though neither saw as steep a rise over last month and were not as far under last year's price. 

Diesel fuel, however, averaged $3 a gallon, a substantial 16 cents under last year price, and up just a penny over last month's cost. E85 was up 7 cents at $2.42 a gallon, and actually a couple of cents higher than last year's average at this time of $2.40. 

Natural gas prices

Natural gas spot prices fell at most locations for the report week ending on Wednesday, July 17. Henry Hub spot prices fell from $2.46 per million British thermal units (MMBtu) to $2.38/MMBtu over that period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange, the price of the August 2019 contract decreased 14 cents, from $2.44/MMBtu to $2.30/MMBtu over the seven days. The price of the 12-month strip averaging August 2019 through July 2020 futures contracts declined 11 cents/MMBtu to $2.463/MMBtu.

Net injections to working gas totaled 62 billion cubic feet (Bcf) for the week ending July 12. Working natural gas stocks are 2,533 Bcf, which is 13% more than the year-ago level and 5% lower than the five-year (2014-18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 19 cents/MMBtu, averaging $4.71/MMBtu for the week ending July 17. The price of ethane, propane, and isobutane rose by 14, 4 and 2%, respectively. The price of natural gasoline and butane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, July 9, the natural gas rig count decreased by two to 172. The number of oil-directed rigs fell by four to 784. The total rig count decreased by five, and it now stands at 958.

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.