Food & Beverage

Pizza Hut parent dips, Papa John's continues ascent

As Pizza Hut's parent company, Yum Brands, dipped, Papa John's remained in an upward climb.

Photo: iStock

August 10, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

In pizza company stock trading last week, Papa John's International Inc. continued its rise toward the $100 a share mark. Investors on the Nasdaq drove the Louisville, Kentucky-based company 's shares up $3.44 to close Friday at $98.11, another all-time high for the company since it began its listing on the Nasdaq in June 1993.

Meanwhile, Ann Arbor, Michigan-based competitor, Domino's Pizza Inc. also got a lift over last week's trading activity, rising $2.51 on the week to close Friday on the New York Stock Exchange at $389.12. In fact, even Dallas-based, Pizza Inn and Pie Five parent company, Rave Restaurant Group Inc., pushed up 3 cents per share in value, last week, to 60 cents at the close Friday on the Nasdaq. That's a welcome increase as the company nears the Aug. 14 deadline for revealing a plan to recover its minimum stock value to avoid delisting.

The only loser last week among the brands monitored by Pizza Marketplace weekly was Pizza Hut parent, Yum Brands Inc. It closed the week down 23 cents from the previous week's close and starts this week's trading at $90.82.

As for trading and values for major pizza restaurant commodities, last week brought good news for restaurant operators in cheese and fuel prices, while wheat prices were mostly higher.

Cheese

The weekly average paid for cheese barrels last week fell 7 cents to $1.73, while blocks averaged a nickel lower at $1.87. Barrels closed at $1.52 Friday, while 40-pound blocks ended the trading week at just under $1.71, according to the U.S. Department of Agriculture.

The department reported that overall foodservice pipelines for cheese have shown signs of being somewhat fulfilled, as demand has ebbed in that sector. Additionally, cheese stock reports in the coastal regions are growing, while Midwestern U.S.D.A. contacts reported mostly committed inventories.

Milk is widely available for production, and market participants do not expect that to change any time soon, with spot milk prices in the Midwest ranging from $2 to $5 under class. Cheese production is reportedly busy, resulting in market prices that were resolutely bearish last week. However, U.S.D.A. contacts reported that market tones are expected to be more competitive with international prices soon, at the current rate.

Wheat

Nationally, cash bids for wheat were mixed to mostly higher, beginning with Kansas City Rail Bids for hard red winter wheat ordinary protein up nearly 3 cents to $5.28 to $5.38. In St. Louis truck bids for U.S. No. 2 soft red winter wheat were down 6 cents to $5.10.

In Minneapolis, spring wheat, 12% to 15%, ranged from 20 cents lower to 10 cents higher. Finally, in Portland, Oregon, U.S. No. 1 soft white wheat ordinary protein was up, ranging 55 cents to 64 cents.

Auto fuel

Last week, the national average for a gallon of unleaded regular remained flat at $2.18 on average, a cent lower than the previous week at the same time and flat with the month-ago price, while still 52 cents under last year's price at this time, according to the American Automobile Association.

Ebbing demand is holding prices down, with the U.S. Energy Information Administration reporting that gas demand fell from 8.8 million barrels a day (b/d) to 8.6 million b/d. If the falling demand trend continues, prices could go even lower this week, AAA said.

Domestic crude prices decreased due to a weak U.S. dollar and despite the Energy Information Administration's weekly report showing total domestic inventories decreased by 7.4 million barrels (bbl) last week, lowering total stocks to 518.6 million bbl. The decrease in total supply, amid falling demand, could mean that the domestic crude market is rebalancing. However, if crude prices climb, pump prices could follow suit, depending on how local gasoline supply and demand market conditions take shape.

Last week, the biggest gas cost increases were in Utah (up 10 cents) and Michigan (up 6 cents), while in Kentucky prices fell 5 cents on the week, AAA said. This morning the average price of regular unleaded remained at $2.18, while mid-grade also remained flat at $2.53, but premium dropped a cent at $2.79.

The average paid for a gallon of diesel was also flat from last week at $2.43 and down just a cent from the previous month. E85 clocked in at $1.97, which was even with the price from a week ago.

Natural gas

Natural gas spot prices were mixed at most locations for the seven days ending on Aug. 5. The Henry Hub spot price rose from $1.75 per million British thermal units (MMBtu) to $2.18/MMBtu over the same period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange, the August 2020 contract expired at $1.85/MMBtu. The September 2020 contract price increased to $2.19/MMBtu, up 26 cents/MMBtu over the seven days. The price of the 12-month strip, averaging September 2020 through August 2021 futures contracts, climbed 9 cents/MMBtu to $2.714/MMBtu.

The net injections to working gas totaled 33 billion cubic feet (Bcf) for the week ending July 31. Working natural gas stocks totaled 3,274 Bcf, which is 22% more than the year-ago level and 15% more than the five-year (2015–19) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 11 cents/MMBtu, averaging $5/MMBtu for the seven days ending Aug. 5. The price of butane fell by 5%. The prices of ethane, natural gasoline, and isobutane rose by 1%, 8%, and 15%, respectively. The price of propane remained flat week over week.

About S.A. Whitehead

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.