One in three of the small businesses that have shut down since the coronavirus pandemic hit don’t expect to ever reopen again. “Small businesses are the heartbeat of our communities — and they’re in real trouble,” Facebook COO Sheryl Sandberg wrote in a post on Monday.
Yahoo Finance speaks with Wingstop CEO Charlie Morrison following a bang up first quarter. Here's what drove some savory sales gains.
With its stock down 32% over the past three months, it is easy to disregard Shake Shack (NYSE:SHAK). However, stock...
(Bloomberg) -- The Trump administration said firms that took loans of more than $2 million that they didn’t need from a small business aid program would be allowed to repay the money without legal consequences, reversing an earlier threat that the government could pursue them criminally.New guidance issued Wednesday for the Paycheck Protection Program by the Small Business Administration and the Treasury Department also said that companies that accepted loans of less than $2 million will automatically be determined to have done so in good faith because they’re less likely to have access to other resources.The guidance comes before the Thursday deadline that the SBA and Treasury had set for firms that weren’t eligible for a PPP loan to return them without penalty and provides more assurance for firms with smaller loans who were uncertain about whether they should keep the money. Some companies have reported returning loans even though they think they’re eligible amid changing rules and guidance.Assuming that loans of less than $2 million were taken in good faith will allow the SBA to focus its resources on reviewing larger loans given the massive size of the program, the agencies said. More than 4.3 million loans worth almost $535 billion have been approved so far, including almost 33,900 loans of more than $2 million as of May 8, according to SBA data.The SBA has said it will review all loans above $2 million and potentially others as well to check whether firms properly certified they were necessary. If the SBA determines a company couldn’t justify the need, the loan won’t be forgiven -- and if the borrower repays it, no further action will be taken, according to the new guidance.Last month, following a backlash after large firms swooped in and collected millions from the program -- which was intended to cast a lifeline to small concerns that didn’t have access to capital markets -- Treasury Secretary Steven Mnuchin said borrowers had criminal liability for taking loans they didn’t need.Borrowers suspected of committing fraud in taking relief loans are being prosecuted. The Justice Department last week brought the first criminal case related to the program when it charged two New England businessmen with fraud and alleged that their applications falsely claimed employees they didn’t have. A reality television personality bought diamond jewelery and a Rolex watch after tapping $2 million from the program, U.S. prosecutors said Wednesday.President Donald Trump told reporters on Wednesday that companies that took PPP loans improperly will have “big problems” and “if there’s any companies that got loans they weren’t entitled to, we’ll go after them very seriously.”The program allows loans to small businesses of as much as $10 million that can be become grants if proceeds are spent mostly on payroll for two months after they are received. It’s meant to keep workers employed and firms ready to re-open when state stay-at-home orders are lifted.After Shake Shack Inc. and the Los Angeles Lakers got loans -- and later returned them -- at the expense of mom-and-pop operations, the SBA and Treasury issued guidance April 23 saying companies with “substantial market value and access to capital markets” would be unlikely to qualify. Borrowers had to certify on their applications that “current economic uncertainty makes this loan request necessary to support the ongoing operations” of the business.The new guidance doesn’t specify how the SBA would determine in its audits whether a borrower had “adequate sources of liquidity” and “lacked an adequate basis for the required certification concerning the necessity of the loan.”But groups representing both small businesses and lenders praised the new guidance, saying they were looking for answers and help in complying with the program. It will be a relief to many who were wary about accepting a loan or unsure about whether they should have taken the money, said Paul Merski of the Independent Community Bankers of America.“This is going to ease a lot of that anxiety,” Merski said.It would have been difficult for the government to make a case that a borrower certified the need for a loan in bad faith, said Alan Roth, a partner at Winston & Strawn LLP. The new guidance is pragmatic given the volume of loans, he added.“I think the government is trying to take a reasoned approach to this,” Roth said.The SBA and Treasury haven’t disclosed how many companies have returned or canceled loans and in what amounts. Public companies have reported returning 61 loans worth $411 million as of Wednesday evening, according to data compiled by FactSquared.(Updates with Trump comment, in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Q1 2020 Shake Shack Inc Earnings Call
Shake Shack (NYSE: SHAK) is preparing for a world after COVID-19 where social distancing remains a key consideration for consumers. The fast-casual burger chain will be introducing a new store design that incorporates the concept by modifying the restaurant's exterior to include drive-thru and walk-up windows to better enable contactless order pickup. Although carryout has always been part of Shake Shake's business model, the onset of the coronavirus pandemic forced the company to adopt a to-go-only model in mid-March.
The Treasury Department says Paycheck Protection Program loans are not meant for “a public company with substantial market value and access to capital markets” and given big borrowers a May 18 deadline. Here’s how the returns are going.
Small businesses weigh their future, as economies begin to reopen. The economic pressures are magnified for small businesses, which account for 50% of total employment in the U.S. A recent study by Deutsche Bank found that one quarter of small businesses only had enough cash on hand to operate for one to two more months, while 7% said they had no liquidity.
Some think of McDonald's (NYSE:MCD) as a recession play. That is, when money is tight and people need something to eat -- either for substance or for comfort -- the Golden Arches is there. However, McDonald's stock hasn't acted in that way.Source: Nixx Photography / Shutterstock.com While some stocks continue to surge to new all-time highs, McDonald's isn't one of them. The stock is still down more than 18% from its 2020 high.However, that doesn't make it one for investors to pass on. Instead, they should be looking at McDonald's stock as a buying opportunity. The question they need to ask themselves is, "at what price?"InvestorPlace - Stock Market News, Stock Advice & Trading Tips Sizing Up McDonald's StockRestaurants, fast-casual diners and fast-food operators are forecast to struggle this year. That ranges from Starbucks (NASDAQ:SBUX), Shake Shack (NYSE:SHAK), Wendy's (NYSE:WEN) and yes, McDonald's stock.Analysts forecast earnings to fall 27% this year to $5.69 per share. That's alongside a 14.4% decline in revenue. That's really not that bad, particularly when compared to some of its peers. * 10 Key Stocks to Watch Over the Next Few Months However, 2021 is forecast to be a rebound year. Consensus expectations call for earnings growth of roughly 40%, along with revenue growth of 15.5%. Like anything, there are positives and negatives with these estimates -- and unknowns. Click to Enlarge Source: Chart courtesy of Statista, Source from GeekWire; Gravity Payments For starters, we don't know if the novel coronavirus is done wreaking havoc on the economy. If it continues, 2021 estimates will likely need to come down.It's good to see earnings estimates for 2021 surpass that of 2019 ($7.92 per share vs. $7.84 per share). While it's always possible that McDonald's doesn't achieve this figure next year, it's a step in the right direction; it's a positive. The negative is revenue growth.Unlike something like 5G -- where investment spend will happen regardless of whether it's delayed -- when burger sales dip because restaurants are closed, those sales are gone. No one is buying two Big Macs at their first Mickey D's stop in May because they were deprived in April.McDonald's stock trades at about 30 times this year's earnings estimate, which is a bit pricey. But it trades at just 22 times 2019 earnings and 2021 estimates once we return to some normalcy. That's really not a bad price to pay for a high-quality company that yields about 2.8% -- particularly when 10-year Treasury yields are at just 0.63%. Buy the Dip Click to Enlarge Source: Chart courtesy of StockCharts.comMcDonald's stock will still be standing when Covid-19 blows over, but that doesn't mean investors should pay any price for it. It's not a bad price now, but it doesn't have the momentum that other stocks do.For instance, one of our favorites in PayPal (NASDAQ:PYPL) just hit new all-time highs. The same can be said for Shopify (NASDAQ:SHOP). But McDonald's is under pressure.Shares couldn't reclaim the $185 to $190 area. So far, it's being rejected by this zone, leaving investors to wonder if it can eventually power through or if a larger pullback could be brewing.Check out the $165 area on the chart above. Technically, this has been a significant level over the past few years. Plus, the rising 200-week moving average comes into play near $161.In this area, McDonald's stock will sport a dividend yield north of 3% and trade closer to 20 times 2021 earnings estimates (and 20 times 2019 earnings). It will also give investors a better risk/reward setup with a lower cost basis.Remember, the stock has not only paid, but raised its dividend for more than four decades. That has been the case since it first started paying its dividend in 1976.McDonald's stock isn't one of the most exciting names out there, let's be honest. But it's a high quality, consistent company with a great global business. Management has done a great job pivoting the business back toward growth and investors should consider it an excellent long-term anchor in their portfolio.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post McDonaldas Stock Will Always Be a Portfolio Cornerstone appeared first on InvestorPlace.
The Federal Reserve’s massive March stimulus program unfroze corporate financial markets, starting a chain reaction that has lured investors back into even the riskiest asset classes, like equities.
When I predicted things would get rough for Shake Shack (NYSE: SHAK) in the first quarter of 2020, a pandemic-fueled economic crisis is hardly what I had in mind. Shake Shack describes itself as a modern-day "roadside" burger stand.
Papa John's CEO Rob Lynch says business is on a major upswing during the COVID-19 pandemic.
Shake Shack (NYSE: SHAK) recently announced first-quarter earnings results that were about as bad as investors had feared. Management even sees the potential for better leasing terms and discounted real estate costs ahead, which would lay the groundwork for stronger earnings once the COVID-19 threat passes.
Fast food giant Taco Bell is ramping up hiring and announced today that it will be hiring 30,000 workers this summer.
American astrophysicist, Neil deGrasse Tyson, also known as the coolest smartest guy in Manhattan, has a cult following. Neil deGrasse Tyson doesn’t fit the image of one might have of a genius scientist. Not in the way he looks, the way he sounds, the way he walks. And then there’s the coolness factor. The guy’s […]
Wendy’s, McDonald’s and other quick-service restaurants are weathering the coronavirus pandemic better than many chains because they already conduct a large amount of sales for takeaway or drive thru, according to J.P. Morgan analyst John Ivankoe. They might have already appreciated too much for new investors now, however.
The burger chain has been relying on price increases to boost same-store sales, but that strategy is being tested in the current economic environment.
It's not just dining customers asking for the check these days. Many indie operators and a few established chains may buckle in this COVID-19 environment.
As it turns to takeout and delivery, along with meal kits, to maintain sales while people eat at home to avoid coronavirus exposure, Shake Shack (NYSE: SHAK) has decided to create its own social media cooking show. Dubbed Shake Shack at Your Shack, the online show is being produced in partnership with the creative agency Circus Maximus. The first 90-second episode, "Cheese Sauce," features Shake Shack's culinary director Mark Rosati demonstrating how people can make the company's cheese sauce recipe in their home kitchen.
J.P. Morgan Chase & Co. Chief Executive Jamie Dimon urged business and government to use the coronavirus pandemic as an opportunity to create a fairer economy.