Day: June 8, 2016

Taco rises, Chipotle plunges in new survey; Yum sets China spin for Oct. 31; Aetna: DOJ wants more info, but deal on track

A news summary, focused on big employers; updated 5:30 p.m.

Taco Bell store front
Taco revamped menu this year to include breakfast.

TACO BELL ranked No. 2 among fast-casual Mexican restaurants in the annual Harris Poll restaurant brand survey, published today, right behind Moe’s Southwest Grill. Last year, the Yum unit tied for No. 3. Meanwhile, Chipotle — hit hard this year by stubborn health scares at some restaurants — got knocked down to No. 5; it had topped the list the past three years (Harris). Moe’s is owned by the same company that operates shopping mall mainstays Auntie Anne’s and Cinnabon. (USA Today).

In horrific allegations in Houston, three teenagers say Taco Bell employees stabbed one of them, then burnt the other two with hot grease — accusations the company disputes (CW 33and Houston Chronicle). And in Wisconsin, a 25-year-old Village of Waterford man is facing the possibility of more than three years in prison after allegedly passing out in the drive-thru of a Waukesha Taco Bell last week and physically refusing arrest (Journal Times).

McShane
McShane

BROWN-FORMAN said Michael McShane, a senior vice president overseeing the Australia, New Zealand, and Southeast Asia regions, is retiring Oct. 31. The spirits and wine giant didn’t disclose details about replacing him. McShane’s 17-year career started in 1999 as finance director for Brown-Forman Beverages based in Sydney after serving in a variety of roles for Swift & Moore, then distributor for Brown-Forman in Australia (press release). Also, a transcript is now available for the company’s fourth-quarter earnings conference call yesterday (Seeking Alpha).

YUM has set Oct. 31 as the date it plans to formally split itself into two publicly traded companies when it cleaves the mammoth China division away under pressure from activist investor Corvex Management. CEO Greg Creed said yesterday his team would begin a road show in early October to pitch the split to prospective investors (The Street). Yum shares closed at $83.73, down less than 1%.

Karen Lynch
Lynch

HUMANA: Aetna president Karen Lynch told analysts at a Goldman Sachs health care conference the Hartford insurer is giving the Justice Department “a lot of information” in response to a second request, amid the agency’s review of the planned $37 billion acquisition of Humana. But she didn’t detail the nature of the agency’s additional request. Lynch said the deal still remains on track to close later this year (Hartford Courant).

TEXAS ROADHOUSE shares closed at $46.54, up 15 cents, after hitting an intraday high of $46.81. It was the second consecutive day shares closed at an all-time high. The casual steak house chain’s stock has soared 27% in the past year vs. a slim 1% gain in the S&P 500 index (Google Finance). Since opening in 1993, the company has grown to more than 460 locations in 49 states and five international locations in the Middle East (company fact sheet).

Haier logoGE will pay eligible workers a “closing payment” of $800 following the $5.6 billion sale of the company’s home appliances business to China’s Haier. Also, those who lose jobs within the first year after the sale will get preferential placement at other GE locations. The sale closed Monday, ending a 61-year chapter in Louisville’s economic history. The IUE-CWA union and Haier have agreed to honor terms of the current contract with about 6,000 Appliance Park workers while a new one is being negotiated (WDRB). Monday’s sale also included GE’s 1,200-employee refrigerator factory in Decatur, Ala. (Decatur Daily News). Haier and other Chinese multinationals setting up factories in the U.S. are attracted to America’s stable social, political, and legal environments. Haier completed its $5.6 billion acquisition of GE Appliances on Monday, part of a wave of such investments totaling more than $15 billion last year (Rutgers University).

UPS: Prosecutors in Las Vegas have dropped charges against a paraplegic man accused May 21 of robbing a UPS driver of a cellphone and scanner, and then running from the scene, conceding his disabilities would have made that impossible. But the prosecutor’s move didn’t come until after Antwine Hunter spent two weeks in jail (Review-Journal).

David Callaway
Callaway

In other news, in a move with big implications for The Courier Journal, the top editor at USA Today, David Callaway, is leaving to become CEO of financial news site The Street, effective July 1; the paper has started a search for his replacement (USA Today).

Callaway had been at the paper four years, a period during which it assumed growing influence over the CJ  Continue reading “Taco rises, Chipotle plunges in new survey; Yum sets China spin for Oct. 31; Aetna: DOJ wants more info, but deal on track”

Bruce Lunsford“If somebody spent their life building something and all they have to do is move across the border to Tennessee, or move to Texas or move to Florida, they’d be a fool not to do it.”

— Louisville investor Bruce Lunsford, responding to a question about why Yum Brands CEO Greg Creed and other c-suite executives moved to Texas, which doesn’t have a state income tax (Insider Louisville). In February, Yum said they switched to be closer to the Dallas area headquarters of the company’s two biggest divisions, but would continue to spend one or two weeks a month at Yum’s Louisville headquarters.

Yo-Yo Ma’s biggest fear isn’t stage fright

Yo Yo MaThe world-renowned cellist, who’s performing with the Louisville Orchestra in October, tackles Vanity Fair’s Proust Questionnaire today. A sampling reveals a recurring theme:

What is your greatest fear? Very large bugs.

If you could choose what to come back as, what would it be? A bird. I could travel for free and then eat the bugs.

Ma will play Oct. 30 at 4:30 p.m. at the Kentucky Center for the Performing Arts. Tickets are $50 to $400, for a post-concert party  at the Muhammad Ali Center with cocktails, dinner, and live entertainment to celebrate the 2016-2017 season opening.

The orchestra has been led by music director Teddy Abrams since 2014. Read more about the orchestra’s history.

Brown-Forman jumps 4% on Q4 financial results; N.Y. says UPS illegally shipped 700K cartons of untaxed cigs; and a Brit’s bonkers for Roadhouse

A news summary, focused on big employers; updated 6:17 p.m.

Paul Varga
Varga

BROWN-FORMAN said fiscal fourth-quarter operating income soared to $726 million on sales of $933 million, on the continued strength of Jack Daniel’s whiskey sales. But the figures included a one-time $485 million gain from the sale of Southern Comfort and Tuaca during the quarter, which ended April 30. On a diluted per-share basis, earnings were $2.60 per share vs. 66 cents a year ago at the spirits and wine giant (press release and the SEC 8-K). What analysts had forecast. The company’s class A and class B shares both closed up 3.5% (Google Finance). CEO Paul Varga called the fiscal year “a tale of two halves,” with emerging market sales rising by 8% in the first half of the year before paring that decline to 1% in the second half (Wall Street Journal). Management held a 10 a.m. conference call to discuss the results, and it’s now available for replay. More about Brown-Forman.

UPS: New York’s attorney general yesterday accused UPS of knowingly shipping about 700,000 cartons of untaxed cigarettes from Native American reservations to consumers and smoke shops between 2010 and 2014, even though the company had agreed to halt the practice more than a decade ago. UPS denied the allegation (Associated Press).

Amazon logoAMAZON will invest another $3 billion in its India operations, more than doubling its prior commitment in what CEO Jeff Bezos said yesterday is the company’s fastest-growing market. Two years ago, the online retail giant announced a $2 billion investment in the nation, where it already employs 45,000 workers. Bezos disclosed the news at a Washington business summit attended by Indian Prime Minister Narendra Modi (BBC and International Business Times). Amazon didn’t help its efforts when consumers threatened a boycott over the company’s selling doormats bearing the image of the Hindu gods and other religious symbols; the company pulled the items this week (Mashable).

KINDRED: Jurors heard opening statements yesterday in a wrongful death lawsuit against the hospital and nursing home giant, brought by the family of a man who died in 2011 at the Greenbriar Terrace nursing home in Nashua, N.H. Byam “Bing” Whitney Jr. had developed pneumonia, followed by bedsores that led to sepsis; he was 84 (Union-Leader).

PAPA JOHN’S: A Miami delivery driver filed another proposed class-action lawsuit against 31-store franchiser Pizzerias LLC in Florida federal court on Monday, accusing the company of shorting drivers on mileage reimbursements (Law 360). In August, Papa John’s agreed to pay $12.3 million to settle a class-action lawsuit accusing the company of underpaying mileage reimbursements to drivers in Florida and five other states. That suit was originally filed in federal court in St. Louis in 2009, and represented about 19,000 drivers (KYCIR).

TEXAS ROADHOUSE: Noted, because it popped up in Boulevard’s news search results this morning: TripAdvisor users rated Texas Roadhouse No. 21 of 194 restaurants in St. George, Utah. “This was possibly our best meal out of the four that we had in St George,” user Tired Boy of the U.K.’s Sheffield wrote yesterday, in a perfect five-star review. “Some people may feel that they don’t like the chain restaurant scene, but it was our first time there and we’d definitely go back again” (TripAdvisor). St. George is a Mojave Desert resort in the state’s southwest corner.

In other news, U.S. stocks closed the day up modestly, as did most of the 11 big employers in Boulevard’s Stock Portfolio (Google Finance). Finally, the cast of “The Phantom of the Opera” was to pay tribute to the late boxing legend Muhammad Ali this afternoon at the Kentucky Center for the Performing Arts, where it began a 12-day run last week; Ali died last week at 74, and his funeral will be Friday (WDRB).