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Omar Venerio
Omar Venerio
Articles (1720) 

Friday Morning Market Highlights

Markets in the green, Del Taco Restaurants falls on third quarter results

US Markets

U.S. stocks were in the green on Friday morning, reversing the past days' losses. The Dow gained more than 200 points, or 0.75%, to 28,707, the S&P 500 index jumped 0.38% to 3,497 and the Nasdaq Composite Index was up 0.07%, to 11,722.

Gainers

  • General Electric Co (GE) +6.7%
  • Boeing Co (NYSE:BA) +3.3%
  • Caterpillar Inc (NYSE:CAT) +3.1%
  • United Rentals Inc (NYSE:URI) +3.4%
  • Pfizer Inc (NYSE:PFE) +2.4%
  • Fastenal (FAST) +1.6%

Losers

Global Markets

The main European stock markets traded in the green. The UK's FTSE 100 rose 1.52%, France's CAC 40 gained 2.29%, Germany's Dax was up 1.79% and Spain's Ibex 35 increased 0.69%.

In Asia, Japan's Nikkei 225 fell 0.41%, India's BSE Sensex advanced 0.64%, Hong Kong's Hang Seng jumped 0.94% and China's Shanghai Composite was up 0.13%.

Del Taco Restaurants releases earnings report

Shares of Del Taco Restaurants, Inc. (NASDAQ:TACO) fell more than 16% on Friday morning after the company announced financial results for its third quarter of fiscal 2020. It posted earnings per share of 16 cents, beating analysts' estimates by 6 cents. Revenue of $120.78 million jumped 0.5% year-over-year and also beat expectations by $420,000.

President and CEO John D. Cappasola, Jr. had the following to say:

"As we continue to navigate the challenges and opportunities related to COVID-19, I am proud of our actions to stabilize our business as demonstrated by our strong third quarter performance. Positive third quarter comparable restaurant sales for company-operated and franchised restaurants reflects our value-oriented QSR+ positioning, expanding off-premise convenience and use of innovation with the very successful launch of new fresh Guacamole and our Crispy Chicken menu. We also drove operational efficiencies and maintained our cost discipline to help slightly expand our restaurant contribution margin after adjusting for the timing of advertising expense which will normalize during our fourth quarter."

In the quarter, comparable restaurant sales rose 4.1% system-wide, increased 2.0% at company-operated restaurants and inched up 6.5% at franchised restaurants. The company-operated restaurant sales reached $109.5 million, down 1.4% from the same quarter of 2019 due to fewer restaurants opening.

Further, the restaurant contribution margin was 18.0%, higher than 16.8% in the fiscal third quarter 2019.

The adjusted Ebitda was $15.3 million compared to $14.5 million in the fiscal third quarter 2019.

Disclosure: The author holds no positions in any stocks mentioned

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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