Article

Something to smile about: Domino's, Pizza Hut, Papa John's, Rave shares all up

Pizza brand stock values are up and gas prices keep going down. So, how's that for something to take the gray right out of a locked-down, mid-pandemic day's skies?

A much-needed smile for pizza producers came in the form of higher share values and lower gas prices last week (photo: iStock).

April 13, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza investors were smiling last week as all four brands monitored by this site showed value gains last week. Pizza Hut parent, Yum Brands, made the biggest gains on the week, closing Friday at $80.37, up $17.07 from the previous week's value, reflecting that not just Pizza Hut, but also fellow QSR brands of Taco Bell and KFC are doing some steady pickup and delivery business in a locked-down world. 

But the world's largest pizza chain fared pretty well too, shooting up $15.41 over the previous week's closing value to settle in Friday at the close at a healthy $343.64. Meanwhile, another of the Big Three pizza brands, Papa John's International, Inc., experienced a nice bounce in value last week when it closed up $6.42, to end Friday at $59.  

Even the smaller and recently backsliding double pizza brand company, Rave Restaurant Group, pulled out a win last week, when its value rose 10 cents over the week, before the Pie Five and Pizza Inn parent company closed at week's end at 69 cents after news of the sales success of Pizza Inn's "Pizza Buffet To Go" offering. 

Cheese

Cheese producers are feeling the trickle-down effects of the restaurant industry's pain, in vastly reduced food service demand that's creating cheese stockpiles and pulling prices down substantially. According to the U.S. Department of Agriculture, Chicago Mercantile Exchange averages for cheese last week fell 14 cents for barrels, which averaged $1.06, while blocks tumbled 19 cents to an average of $1.11. Barrels closed last week at just $1, while 40-pound blocks ended the week at $1.06. 

The U.S.D.A. said cheese inventories are growing throughout the country, as contacts in all regions report concerns about cheese stocks. Invariably, more cheese is moving into cold storage as food service demand, most notably, has been slammed by the COVID-19 closures of many public and private food establishments. 

Some school districts are providing school lunches for students, but the overall effect is resolutely bearish regarding food service demand. The U.S.D.A. said some of its contacts nationally had previously expected some price declines, but now they are questioning how low the basement is.

Wheat

Contrary to those falling cheese prices, wheat prices are actually growing, with prices ranging from steady to 28 cents higher, the U.S.D.A. said.  
Kansas City U.S. No. 1 hard red winter, ordinary protein rail bid, was 28 cents higher, from $5.77-$5.87 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 15 cents higher at $5.72 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14 to 14.5 percent protein rail, was 3 1/2 to 8 1/2 cents higher, from $6.32 1/2-$6.47 ½ per bushel. Portland U.S. soft white wheat rail was steady to 5 cents higher, from $6.05-$6.10 per bushel.

Vehicle fuel

Gas prices continue to be a bright spot in COVID-19-darkened skies for delivery-centric pizza brands and last week's numbers added to that trend, with the national average for a gallon of regular gasoline falling 4 cents over the five-day work week, and now standing at $1.86. Lower crude prices, as well as lower demand amidst the pandemic, have both helped to push pump prices lower, according to the American Automobile Association, which tracks prices nationally. 

In its latest weekly report, the Energy Information Administration reported that gas demand plunged to 5.1 million barrels a day from the previous week's rate of 6.7 million b/d. With Americans expected to remain at home in the weeks ahead, demand for gas is likely to continue declining alongside pump prices. 

Additionally, domestic crude prices decreased by $2.33 and settled at $22.76 late last week. Likewise, crude prices were volatile all week after announcement of a tentative crude production reduction agreement between the Organization of the Petroleum Exporting Countries and other major crude oil producers, including Russia. 

Across gas grades and fuel variants, prices held in sync, with the average price for a gallon of mid-grade gas down 7 cents over the week to the current $2.25, while premium was going for $2.52 a gallon, down 6 cents over the week. Diesel ($2.53) fell just 3 cents on the week, while E85 dropped 8 cents over the seven days to its current average of $1.66. 

Over last week, AAA said the 10 states with the biggest declines in their averages include Alaska (-18 cents), Idaho (-17 cents), Wisconsin (-14 cents), Iowa (-12 cents), Wyoming (-12 cents), Arkansas (-10 cents), Minnesota (-10 cents), Michigan (-10 cents), Nevada (-9 cents) and Indiana (-9 cents).

Natural gas

Natural gas spot prices rose at most locations for the seven days that ended April 8, while the Henry Hub spot price rose from $1.60 per million British thermal units (MMBtu) to $1.80/MMBtu over the same period.

At the New York Mercantile Exchange, the price of the May 2020 contract increased 20 cents, from $1.59/MMBtu to $1.78/MMBtu yesterday. The price of the 12-month strip averaging May 2020 through April 2021 futures contracts climbed 13 cents/MMBtu to $2.35/MMBtu.

The prices of isobutane and ethane fell by 2% and 5%, respectively. The price of natural gasoline remained flat week over week, while the prices of propane and butane rose by 1% and 20%, respectively. Recently issued waivers allowing continued sales of winter-grade gasoline have enabled more butane blending, which increased butane prices.

Inset 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.