Core Insights - The market began 2025 positively but faced volatility due to tariff and geopolitical risks, with the Fed cutting rates by 25 basis points to 4.00–4.25% in September and signaling two more cuts for the year [1] - Despite inflation and rising unemployment, equities remain near record highs, driven by optimism over rate cuts, AI-driven earnings growth, and hopes for a soft landing [1] - Retail investors face challenges in stock selection amidst these conditions [1] Sales Growth as a Key Metric - Sales growth is preferred over earnings for evaluating stocks, as it reflects actual demand and provides visibility into a company's business model durability [3] - Companies that can grow revenues during economic downturns demonstrate pricing power and competitive advantages [3] - Constant sales growth leads to stronger cash flows, allowing for reinvestment, market expansion, or shareholder returns without excessive debt reliance [5] Stock Selection Criteria - Stocks with 5-Year Historical Sales Growth (%) greater than industry average and Cash Flow over $500 million are prioritized [6] - Additional metrics include P/S Ratio less than industry average, positive % Change in F1 Sales Estimate Revisions, Operating Margin greater than 5%, and Return on Equity (ROE) greater than 5% [7][8][9] Recommended Stocks - **Lamb Weston (LW)**: Expected sales growth rate of 1.3% for fiscal 2026, Zacks Rank 1 [12] - **Universal Health Services (UHS)**: Expected sales growth rate of 8.5% for 2025, Zacks Rank 2 [14] - **FirstEnergy Corp (FE)**: Expected sales growth of 6.6% in 2025, Zacks Rank 2 [14] - **NetEase, Inc. (NTES)**: Expected sales growth of 10.3% for 2025, Zacks Rank 2 [15] - **JPMorgan Chase & Co. (JPM)**: Expected sales growth of 2.1% in 2025, Zacks Rank 2 [16]

Industry Overview - Restaurants are navigating a challenging environment, balancing mass appeal with value offerings to attract customers [1][2] - The National Restaurant Association reported mixed results for the summer, with 46% of restaurant operators indicating same-store sales growth from August 2024 to August 2025, a slight decrease from 48% in July [3] - A significant portion of operators, 43%, reported sales declines in August, compared to 42% in July, highlighting the difficulties faced by the industry [3] Company Specifics - CPG Restaurant Group, which operates several restaurant concepts, filed for Chapter 11 bankruptcy on October 15, 2025, in the U.S. Bankruptcy Court for the Eastern District of New York [9] - The company lists its assets and liabilities in the range of $1 million to $10 million and has between 1-49 creditors [9] - Despite the bankruptcy filing, CPG Restaurant Group is operating normally and has a debtor-in-possession plan, although specific details on restructuring have not yet been disclosed [7][9] - The company operates several concepts, including Cheesie's Pub & Grub, Whiskey Business, Lost Reef Lounge, Broke, High & Hungry, and Bob's Bomb A** Burgers [8]

Company Overview - McDonald's is one of the largest restaurant chains globally, owning and franchising restaurants worldwide [1]. Product Offering - The company offers iconic food items, including burgers and French fries [1].

Company Overview - McDonald's is one of the largest restaurant chains globally, owning and franchising restaurants worldwide [1]. Product Offering - The company offers iconic food items, including burgers and French fries [1].

Toronto, Ontario--(Newsfile Corp. - September 12, 2025) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leader in acquiring and scaling emerging food brands is pleased to announce the grand opening of Rosie's Burgers ("Rosie's") newest location at 204 4th St NE (Bridgeland), Calgary, Alberta, this Saturday September 13th, 2025. Rosie's is a boutique QSR restaurant brand serving up its signature smash burgers, poutine, onion rings, milkshakes, and more.Happy Bell ...

Core Insights - Lamb Weston reported fiscal 2025 fourth-quarter earnings with adjusted EPS of $0.87, exceeding analyst estimates of $0.78, and revenue of $1.68 billion, surpassing forecasts of $1.65 billion [1][2] - Despite positive earnings, the company faces profitability pressures due to competitive pricing, higher fixed costs, and subdued restaurant demand, prompting a significant cost reduction plan [1][11] Financial Performance - Adjusted EPS increased by 12% year-over-year, while revenue grew by 4% compared to the previous year [2][6] - Income from operations decreased by 12.6% year-over-year, and net income fell by 7.5% [2] - Adjusted EBITDA rose slightly by 0.5% year-over-year, indicating stable core profitability despite margin compression [2][6] Business Overview - Lamb Weston is a leading supplier of frozen potato products, serving a diverse customer base including quick service restaurants and grocery retailers [3][4] - The company focuses on maintaining market leadership in North America and expanding its product offerings through innovation [4] Segment Dynamics - North American segment revenue declined by 1%, despite a 4% increase in sales volume, due to lower prices and a shift away from higher-margin customers [7] - International segment revenue grew by 15%, with a 16% increase in volume, driven by new customer contracts [7] Cost Management and Initiatives - The company launched a "Focus to Win" initiative targeting $250 million in annualized cost savings by FY2028, including a 4% headcount reduction [11] - Inventory days on hand decreased by eight days, reflecting improved product movement, although warehousing and logistics costs rose [11] Capital Returns - In FY2025, the company returned $488.9 million to shareholders, including $282.0 million in share repurchases and $206.9 million in dividends [13] Future Outlook - For fiscal 2026, Lamb Weston projects net sales between $6.35 billion and $6.55 billion, indicating modest growth, with adjusted EBITDA forecasted at $1.0 billion to $1.2 billion [14] - Management anticipates continued challenges from pricing and cost pressures, particularly in the first half of FY2026 [14][15]

Financial Data and Key Metrics Changes - For the fourth quarter, net sales increased by 4% year-over-year, with volume up by 8% driven by contract wins across channels and regions [25][26] - Adjusted EBITDA for the quarter was $285 million, essentially flat compared to the prior year, with lower adjusted SG&A offsetting lower adjusted gross profit [30][31] - The company ended the year with approximately $1.24 billion in liquidity and a net debt of $4.1 billion, resulting in an adjusted EBITDA to net debt leverage ratio of 3.3 times [31][32] Business Line Data and Key Metrics Changes - North America segment net sales declined by 1% year-over-year, primarily due to lower net selling prices, while volume increased by 4% [26][27] - International segment sales grew by 15% year-over-year, with volume up by 16%, driven by recent customer contract wins [28] - Adjusted EBITDA in the North America segment declined by 7% to $258 million, while the International segment's adjusted EBITDA increased by $22 million to $63 million [30][31] Market Data and Key Metrics Changes - Global restaurant traffic trends were down low single digits in the US and UK, impacting overall sales despite positive consumption trends in the French fry category [25][26] - French fry attachment rates in the US remained approximately two points higher than pre-pandemic levels, indicating strong demand [26] - The international segment faced a 3% decline in restaurant traffic in the UK, yet still achieved significant volume growth [28] Company Strategy and Development Direction - The company is focused on a "Focus to Win" strategy, which includes zero-based budgeting and assessing non-core assets to drive targeted decision-making [11][21] - The strategic framework aims to prioritize investments in attractive growth opportunities across markets, channels, and product segments [15][17] - The company plans to strengthen customer partnerships and enhance execution excellence to differentiate itself in a competitive marketplace [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic and geopolitical factors but expressed confidence in the company's ability to capitalize on customer momentum [22][38] - The outlook for fiscal 2026 anticipates revenue in the range of $6.35 billion to $6.55 billion, reflecting a 2% decline to 2% growth on a constant currency basis [39] - Management emphasized the importance of controlling operational aspects to ensure readiness for when restaurant traffic returns to growth [22][45] Other Important Information - The company announced a cost savings program targeting $250 million in annualized savings by the end of fiscal 2028 [21][42] - Capital expenditures for fiscal 2026 are expected to be approximately $500 million, focusing on maintenance and modernization [34][64] - The company plans to return cash to shareholders, having repurchased $282 million in shares and paid $207 million in dividends during the year [35][36] Q&A Session Summary Question: EBITDA margin target for the year - Management indicated that the EBITDA margin is expected to be below normalized levels in fiscal 2026 due to competitive pressures and pricing actions to support customers [49][50] Question: Working capital improvement specifics - Management highlighted efforts to improve inventory management and planning capabilities to enhance working capital efficiency [53][54] Question: International capacity and project delays - Management confirmed that while some international capacity projects have been announced, many are expected to be delayed or canceled, indicating a rational approach within the industry [60][61] Question: Capital expenditures guidance - Management explained the reduction in capital expenditure intensity as the focus shifts from growth investments to maintenance and modernization [62][64] Question: Sales outlook and pricing impacts - Management noted that the first half of fiscal 2026 will face pressure from carryover pricing actions, with stronger sales expected in the second half due to an additional week of sales [88][89]

Financial Data and Key Metrics Changes - For the fourth quarter, net sales increased by 4% year-over-year, while volume increased by 8%, driven by contract wins across channels and geographies [26][27] - Adjusted EBITDA for the quarter was $285 million, essentially flat compared to the prior year, with lower adjusted SG&A offsetting lower adjusted gross profit [32][34] - The company ended the year with approximately $1.24 billion in liquidity and a net debt of $4.1 billion, resulting in an adjusted EBITDA to net debt leverage ratio of 3.3 times [33][34] Business Line Data and Key Metrics Changes - North America net sales declined by 1% year-over-year, primarily due to lower net selling prices, with a price mix decline of 5% [27][28] - International segment sales grew by 15% year-over-year, with volume increasing by 16%, driven by recent customer contract wins [30][32] - Adjusted EBITDA in the North America segment declined by 7% to $258 million, while the International segment's adjusted EBITDA increased by $22 million to $63 million [32][33] Market Data and Key Metrics Changes - Global restaurant traffic trends were down low single digits in the US and UK, impacting overall sales [26][30] - In the US, French fry attachment rates remained approximately two points higher than pre-pandemic levels, with the French fry category growing by 1% in the quarter [27][30] - The international segment experienced a 3% decline in restaurant traffic in the UK, but still achieved significant volume growth [30] Company Strategy and Development Direction - The company is focused on a "Focus to Win" strategy, which includes zero-based budgeting and assessing non-core assets to drive targeted decision-making [11][22] - The strategic focus is on strengthening customer partnerships, achieving executional excellence, and setting the pace for innovation [15][16] - The company plans to invest in priority global markets and segments, targeting premium market segments where innovation is a differentiator [17][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic and geopolitical pressures affecting consumer behavior and restaurant traffic, but expressed confidence in the company's ability to capitalize on future demand [23][40] - The outlook for fiscal 2026 anticipates revenue in the range of $6.35 billion to $6.55 billion, reflecting a potential decline or modest growth due to carryover pricing actions [40][41] - Management emphasized the importance of controlling operational costs and improving efficiency to enhance competitiveness [45] Other Important Information - The company announced a cost savings program targeting $250 million in annualized savings by the end of fiscal 2028 [22][43] - Capital expenditures for fiscal 2025 were $651 million, down from initial targets, with expectations for approximately $500 million in fiscal 2026 [35][66] - The company plans to continue returning cash to shareholders, having returned $489 million in fiscal 2025 [36] Q&A Session Summary Question: What is the EBITDA margin target for the year? - Management indicated that the EBITDA margin would be below normalized levels in fiscal 2026 due to headwinds faced by key customers and ongoing pricing support [51][52] Question: Can you elaborate on working capital improvements? - Management highlighted improvements in inventory management and planning capabilities as key components of their strategy to enhance working capital [56][57] Question: What is the outlook for international capacity? - Management noted that while there have been announcements of new capacity, many projects are being delayed or canceled, indicating a rational approach within the industry [62][63] Question: How is the company assessing risks related to tariffs? - Management stated that the potential impact of tariffs on financial results is estimated at $25 million, with ongoing efforts to mitigate exposure [85] Question: What is the company's leverage target? - The company continues to target a leverage ratio of about 3.5 times and is open to M&A opportunities that align with its strategic focus [103][106]

Core Insights - Happy Belly Food Group Inc. has signed a franchise agreement and secured a real estate location for Rosie's Burgers in Waterloo, Ontario, marking the brand's eighth location in the province [1][4]. Expansion Strategy - The opening of the Waterloo location is anticipated in Q4 of 2025, with the company ahead of its development schedule and additional locations planned for 2025 and 2026 [4]. - Happy Belly aims to develop a total of 30 units in Ontario, leveraging its franchise network to drive growth and secure strategic real estate [4][8]. Market Potential - Waterloo is identified as an ideal location due to its strong demographic mix, driven by the presence of two major universities, which provides a built-in customer base of students and professionals seeking fast and affordable meals [5]. - The city’s vibrant tech and innovation sector further enhances the market potential for Rosie's Burgers, appealing to a diverse clientele [5]. Franchise Growth - The company has secured 115 Rosie's locations under Multi-Unit and Area Development agreements across various provinces, indicating a robust growth trajectory [8]. - Happy Belly's asset-light franchising model, combined with strategic site selection and operational support, positions franchise partners for long-term success [7][8]. Overall Vision - Happy Belly Food Group is focused on building a scalable growth engine and delivering sustained value for shareholders, aiming to become Canada's leading restaurant consolidator [7][8].