A humorous look at the companies that caught our eye, for better or worse, this week
Restaurant Brands International (STAR)
First, the bad news for Restaurant Brands: Same-store sales at Tim Hortons tumbled 4.3 per cent in the fourth quarter, as Tims continued to bore customers with Belgian Waffle Breakfast Sandwiches and sappy hockey-themed commercials. Now the good news: Even as Tims struggled, same-store sales rose 2.8 per cent at Burger King and soared 34.4 per cent at Popeyes Louisiana Kitchen, which brought back the massively popular fried chicken sandwich to its U.S. stores. Here’s an idea: Convert every Tim Hortons location to a Popeyes and bring the chicken sandwich to Canada. Problem solved.
Under Armour (DOG)
Under Armour’s moisture-wicking clothes are designed for athletes. But right now, investors are the ones who are sweating. Shares of the apparel maker collapsed after it warned that revenue in North America – its biggest market – will fall by mid- to high single digits on a percentage basis in 2020, signalling that the brand is losing traction with consumers amid competition from Nike, Adidas and Lululemon. With Under Armour also facing a first-quarter sales hit of US$50-million to US$60-million from the coronavirus in China and possibly cancelling plans to open a flagship store in Manhattan, shareholders are hitting the showers.
Boston Pizza Royalties Income Fund (DOG)
Who’s hungry for pizza? Nobody, apparently. Boston Pizza Royalties investors lost their appetites after the casual dining and sports bar chain reported that same-store sales fell 2.1 per cent for the fourth quarter and 2.2 per cent for the year, hurt by increased competition, regional economic weakness, high levels of household debt and rising menu prices tied to increased minimum wages. But what really turned investors’ stomachs was Boston Pizza’s 11.3-per-cent distribution cut. Thanks. It’s been a slice.
When Shopify was at $200 a few years ago, you took a pass. Too expensive! When it topped $300, $400, $500 and then $600 you figured it was only a matter of time before the hype faded and the stock crashed. Well, don’t look now but Shopify just blew past $700 after the e-commerce software company reported a 47-per-cent jump in revenue to US$505.2-million and posted its first quarterly net profit – albeit a modest US$771,000. Now that Shopify’s market value has soared to about US$65-billion – more than twice as much as eBay’s – you’re convinced people have completely lost their minds. But, hey, maybe you’ll buy a few shares anyway.
Canopy Growth (STAR)
A marijuana stock that’s actually rising? No, you’re not high. The beaten-down shares of Canopy Growth staged a rare rally after the cannabis producer delivered a 49-per-cent increase in net revenue to $123.8-million for its fiscal third quarter and posted a net loss of 35 cents a share, smaller than the loss of 49 cents that analysts had expected, owing to aggressive cost-cutting. But let’s not get too excited: The shares would have to more than double to get back to where they were before recreational pot was legalized in October, 2018.