Beef Bits

Cattle Market & Farm Reports, Editorials
May 2, 2005
by WLJ

McDonald’s reports a 42% profit
McDonald’s Corp., the world’s largest fast-food chain, reported that better sales in Europe and continued momentum in the U.S. lifted first-quarter profits 42 percent. Net income for the January-through-March quarter was $727.9 million, or 56 cents per share, compared with $511.5 million, 40 cents per share, a year earlier. Results included a gain of $179 million, or 13 cents per share, due to a decreased tax rate and a charge of three cents per share because of a shift from share-based compensation to mostly cash-based. Revenues at the Oak Brook, IL-based company were $4.8 billion, up nine percent from $4.4 billion in the first quarter of 2004.

Drop in Japan sales BSE related
Sales at restaurants and coffee shops in Japan in fiscal 2004 through March 31 fell 2.4 percent from the previous year on a same-store basis, the Japan Food Service Association told Kyodo. The association attributed the fall to a sharp drop in the number of customers at Japanese fast-food restaurants serving “gyudon” beef-on-rice bowls, and “yakiniku” grilled beef restaurants that have been affected by Japans import ban on U.S. beef after the discovery of BSE in the U.S. But on an all-store basis, sales increased 1.6 percent with a rise in the amount spent per customer, more than offsetting a dip in the number of customers.

Outback CFO quits; Q1 income up
Bob Merritt, who joined Outback Steakhouse Inc. as chief financial officer in 1990, announced his retirement, effective May 27, citing recent accounting regulations that unduly burden corporate accounting and finance departments. On a more positive note, Outback reported first-quarter net income of $51 million, up from $47.8 million in the same period last year. The restaurant chain's total revenue for the first quarter jumped 12.8 percent to $895.1 million in the first quarter.

Rancher’s Choice targets fall open
The president of producer cooperative Rancher's Choice Beef said last week he hopes to have a packing facility up and running in Dauphin, Manitoba, by late fall. About 300 producers turned out at a Rancher's Choice annual meeting last Monday to find out when the plant will start slaughtering cattle. The group has raised close to the $16 million needed to build the slaughter facility, and about 20,000 cows have been committed to the plant, according to Rancher’s Choice president David Reykdal. Despite lobbying efforts, the Canadian government has not contributed any cash to the slaughter plant. However, a representative for the federal government at the meeting hinted some money could be on the way.

Ruth’s Chris plans IPO
Ruth's Chris Steak House Inc., based out of Metairie, LA, plans an initial public offering according to a filing with the U.S. Securities and Exchange Commission. At the end of December there were 86 Ruth's Chris restaurants, including 10 outside the United States. Thirty-nine restaurants were company-owned while 47 were franchisee-owned. For fiscal 2004, the restaurant chain brought in $192.2 million in revenue and had operating income of $23.3 million, compared with revenue of $167.8 million and operating income of $15.5 million in the previous year. The company said it does not intend to pay dividends on its common stock.

Nebraska Beef to hold union elections
The National Labor Relations Board has ordered Nebraska Beef, Omaha, NE, to hold a new election to decide if its workers want union representation. The United Food and Commercial Workers Union had challenged an election held in 2001, charging that management intimidated workers that voted down union representation by a wide margin. After a series of hearings, NLRB agreed with the union and ordered that new elections be held this spring. No specific date for the elections has been set.

CKE Restaurants profitable
According to CKE Restaurants Inc., which owns Carl’s Jr. and Hardees, company-wide fourth quarter net income rose to $7.1 million, a $58.8 million increase over the prior year’s net loss of $51.7 million. Hardees and Carl’s Jr. same-store sales increased 4.4 percent and 4.9 percent, respectively, for the fourth quarter. For the entire fiscal year 2004, net income grew to $18 million, an increase of $71.2 million over the prior year. Same-store sales increased 7.7 percent and 7.0 percent at company-operated Carl's Jr. and Hardee's restaurants, respectively, for the year. CKE has a total of 3,166 franchised or company-owned restaurants in 44 states and in 11 countries, including 1,014 Carl's Jr. restaurants and 2,034 Hardee's restaurants.

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