Food & Beverage

Pizza stocks riding the roller coaster

With half of 2020 in the books, Pizza Marketplace looked at stock values for four publicly traded pizza restaurant companies. On paper, the ups and downs probably look like a pizza executive's heart monitor over the last six months.

Photo: iStock

June 29, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza stock values since the beginning of the year are indicative of the crazy ride that restaurateurs have been on in 2020. Over the past six months, leaders at three of the four brands monitored by Pizza Marketplace watched as their brands' values fell by half of each company's high marks over the same period, though Domino's trading value remained relatively high throughout.

Domino's — which claims that it is the world's largest pizza restaurant brand by volume globally — closed Friday at $365.81. Although that was down $12.60 from the closing value a week earlier, it was substantially higher than the brand's six-month trading low-point on Feb. 3 when it fell to $270.75. In fact, Friday's closing value is not that far below Domino's six-month high-point, hit at the beginning of this month when on June 10 the stock reached $392.32. That's just over $100 more than its value six months ago of $292.31 on Dec. 27, last year.

The ride has been more precipitous over the last half-year for the remaining three pizza companies monitored by Pizza Marketplace, with Papa John's, as well as Pizza Hut parent, Yum Brands, and Pie Five and Pizza Inn parent, Rave Restaurant Group, all dropping to around half of their high values over the six months, as follows.

Papa John's International, Inc.

Close on June 26: $79.02.
Close six months earlier, on Dec. 27: $64.46.
Low over six-month period: $35.55 (March 18).
High over six-month period: $83.95 (June 22).

Yum Brands, Inc.

Close on June 26: $84.79.
Close six months earlier, on Dec. 27: $101.90.
Low over six-month period: $56.52 (March 23).
High over six-month period: $106.78 (Feb. 5).

Rave Restaurant Group, Inc.

Close on June 26: 90 cents.
Close six months earlier, on Dec. 27: $1.71.
Low over six-month period: 59 cents (April 3).
High over six-month period: $1.82 (Jan. 3).

Cheese

In cheese trading, barrels closed Friday at $2.40, while 40-pound blocks came in at $2.58, on the Chicago Mercantile Exchange. The weekly average for both barrels and blocks was up over the previous week's trading, with barrels averaging 7 cents higher at $2.38, while blocks ticked up 12 cents in value to average $2.65 for the week.

Overall, cheese market tones are in unprecedented territory, according to the U.S. Department of Agriculture. Following the March/April onslaught of closures and disruptions, restaurants have begun reopening and refilling their pipelines, with retail never losing a step. As a result, cheese availability tightened up nationwide.

All that said, cheesemakers are concerned about a potential market falloff. There was, for instance, a big drop midweek on the Chicago Mercantile Exchange block price, though it steadied the following day. Barrel prices steadily rose all week, with West and Midwest cheese production remaining very active with growing milk availability. Eastern contacts, however, still say lighter milk has limited production schedules there.

Wheat

Wheat prices last week continued on a downward trend, with July Kansas City hard red winter futures losing 10 cents and falling to $4.20, while July Minneapolis Grain Exchange spring wheat futures fell 11 cents to $5, the U.S.D.A. said.

Auto fuel

The national average for a gallon of regular unleaded last week grew 6 cents over the seven days to $2.17, which is also 21 cents more than this time last month, though 50 cents cheaper than it was last year at this time. Part of the reason for that is accelerating demand.

According to new data from the U.S. Energy Information Administration, gas demand increased significantly from 7.87 million barrels a day (b/d) to 8.61 million b/d over the course of last week. That increased demand, in turn, drove pump prices higher. The American Automobile Association said that if demand continues to trend higher, motorists will probably see more increases in gas prices through next week.

Although crude prices increased last Friday in reaction to increasing economic stimulus measures by governments around the world, prices pushed cheaper earlier in the week due to an increase in new coronavirus infections worldwide, which could suppress crude demand.

Additionally, the Energy Information Administration's report for last week showed that total domestic crude inventories grew again by 1.4 million barrels last week, bringing the total to 540.7 million barrels. The increase in crude supplies could push prices lower, since it signals that domestic crude production may need to reduce further in order to meet current demand.

States with the biggest gas price increases last week include West Virginia (+13 cents), followed by Kentucky (+12 cents) and then Ohio, Wisconsin and Colorado, all up 10 cents over the week. The average price for a gallon of unleaded regular this morning was $2.18, a nickel higher than the previous week. Mid-grade $2.51) and premium ($2.78) followed in kind. The price for a gallon of diesel this morning was unchanged from last week at $2.44, while E85 rang in at $2 this morning, 4 cents higher than last week at this time.

Natural gas

Natural gas spot prices rose at most locations for the seven days that ended on June 24 following a hike in the Henry Hub spot price from $1.48 per million British thermal units (MMBtu) to $1.58/MMBtu over the same period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange, the price of the July 2020 contract fell 4 cents to $1.60/MMBtu over that period. The price of the 12-month strip averaging July 2020 through June 2021 futures contracts declined 8 cents/MMBtu to $2.29/MMBtu.

The net injections to working gas totaled 120 billion cubic feet (Bcf) for the week ending June 19. Working natural gas stocks totaled 3,012 Bcf, which is 33% more than the year-ago level and 18% more than the five-year (2015–19) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 1 cent/MMBtu, averaging $4.43/MMBtu for the week ending June 24. The prices of ethane, butane, and isobutane fell by 4%, 3% and 1%, respectively. The prices of natural gasoline and propane rose by 5% and 4%, respectively. The continuing drop in the natural gasoline price reflects stock overbuild, the administration said.

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.