Cake and Joe will open a new cafe in Center City at 1735 Market St. on Feb. 18. The first 100 will get free individual cakes. Owners Sarah Qi and Trista Tang opened their first shop in Pennsport in 2020, followed by a second cafe in Fishtown in 2022.
Michael Tanenbaum
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Iced lattes, cappuccinos, flat whites, seasonal drinks or maybe a shot of espresso — these are some of my go-to orders at coffee shops across Charlotte.
As one of my favorite pop girls, Sabrina Carpenter says, “That’s that me, espresso.” The best part? After three years of living here, I’ve discovered there’s no shortage of great spots, from old favorites to the newer shops popping up around town.
Countless cups later, jolts of energy and lingering taste of nutty, chocolatey or caramel notes, each coffee shop in every neighborhood has its own voice and personality. I love hearing the chatter of girls catching up, murmurs of note taking from a graphic designer and a tech bro in a 10 a.m. meeting asking everyone, “How was your weekend?”
I live for hearing the espresso machine churn out a caffeinated drink, hearing a familiar song by Faye Webster and Laufey or talking to baristas about stuff going on in the city. Regardless of the reason, I love community and I love coffee.
Consider this my love letter — written in espresso shots and milk foam.
Here’s a curated list of my personal picks. Full disclosure: I’m an avid almond milk drinker, so most of my orders feature a milk alternative.
Location: 1217 The Plaza, Charlotte, NC 28205
I frequent Giddy Goat Coffee Roasters, and for good reason. Parking (let alone finding a seat) can be tricky, but it’s worth it. I always try to sit inside in front of the coffee roaster itself. In the mornings, the aroma of freshly ground coffee fills the air as you sip whatever concoction you’ve ordered.
My go-to is a cappuccino with almond milk, extra hot — it takes me a while to finish a drink, and this keeps it warm.
If the weather’s mild, sit at the picnic tables or under the umbrellas. It’s perfect for people-watching since so many pedestrians pass through the area.
For food, don’t miss Giddy Goat’s croissants or quiche. The quiche is buttery and rich but light at the same time — one of my favorite refined breakfast foods.
Location: 2100 N Davidson St, Charlotte, NC 28205
Choosing a favorite in NoDa was tough, but my heart says The Hobbyist. I discovered it shortly after moving here, after friends raved about its convenience and charm. I even considered moving up the street for it.
The Hobbyist has two moods, depending on the garage door: dark and moody, or bright and calm. Both suit the space perfectly. I love sitting at the bar rail, eavesdropping on the baristas’ lore and maybe even making a friend, since most patrons sit alone. If the garage door is open, sit by it to catch the sun’s warmth without overheating. Truly, I used to be a regular here.
Decorated with greenery I envy (I can barely keep one plant alive), it feels inviting. My usual order is a hot coffee with vanilla or an iced matcha with vanilla. I’ve debated with many friends about the best matcha in Charlotte — The Hobbyist always wins.
Location: 210 E Trade St, Charlotte, NC 28202
Parking in uptown gives me the heebie-jeebies, but I make an exception for Lottie’s Cafe. My first visit was during a monthly coffee set hosted by a local group called The 4C, and I’ve been hooked ever since.
I typically get the “Iced Airplane Latte,” a creamy Biscoff cookie butter iced latte. Sweet? Yes — but in all the right ways. Imagine a DJ playing your favorite song while people dance, chat and sip coffee at 11 a.m. on a Saturday — that’s Lottie’s vibe.
The space is bright, with just enough indoor and outdoor seating to enjoy the energy without feeling crowded. And the baristas are fun, too. I love watching them interact when they hear a song they like — they do a little two step and shuffle while making my order.
Location: 125 Remount Rd B, Charlotte, NC 28203
Stable Hand is my top pick in South End. Unlike other crowded spots, it’s never congested — the perfect place to meet friends or even grab a quiet coffee before an interview.
Inside, the space feels modern, clean and straight to the point. My favorite thing about the space is how bright it is; regardless where you’re sitting, you’ll see and feel the sun peeking through.
I usually sit outside, letting the sun’s warmth soak in as I sip an iced vanilla matcha or try one of Stable Hand’s funky seasonal drinks. The seasonal menu is unlike most coffee shops. (No, seriously, last year it had a spiced plum syrup that was to die for!) But the matcha is always a perfect, vibrant green. Not in the mood for coffee? They serve beer and wine, too.
Stable Hand frequently collaborates with local businesses like Hello Uncle and Rowan Coffee.
Come in the morning, and pair your drink with the tofu scramble and add the Verdant sourdough to dip it in. It’s so hearty!
Location: 4209 South Blvd, Charlotte, NC 28209
I first discovered Burr & Berry on TikTok earlier this year. Though originally from South Carolina, it now has locations in Lower South End and Matthews.
This is my favorite grab-and-go spot — the drive-thru makes it easy, and the baristas’ fun energy shines through in every cup. I rarely stick to one specific drink; I usually ask, “What’s the most popular right now?” and go with that.
Any iced drink comes with a chocolate-covered coffee bean, a small touch that makes the experience extra delightful. I especially love visiting during colder months so I can stay in my car while sipping my order.
Location: 2230 Park Rd #102, Charlotte, NC 28203
When I first moved to Charlotte, everyone told me to go visit Not Just Coffee, and they will still tell you that to this day. Whenever I have friends come down to visit me, I will always take them to Not Just Coffee, because, really, this place has it all. There are a lot of locations you can choose from, but I love the Dilworth one.
It’s incredibly cozy inside, but if you’re an outdoor person, the patio is also really nice to sit at. You can catch me on a Saturday morning with the line out the door, mostly because half of the customers are coming from an early morning cycling class at Sky Cycle (me) or yoga at Y2.
I normally get a vanilla latte, the Dukkah Avocado Toast, the breakfast sandwich or if it’s the afternoon, the tuna melt. Many coffee shops might have food items, but to me, NJC has the best. Guaranteed, there’s not an item you won’t like.
It isn’t just the coffee that warms you here — it’s also the people behind the counter. The staff greets you like an old friend.
Location: 919 Berryhill Rd #104, Charlotte, NC 28208
I think I’m a sucker for coffee shops with real food. Not the kind where someone reheats a pastry for you, but the kind with a kitchen where a burger is sizzling on the grill.
Platform Coffee is that place. You’ll want to order The Moonlight, its ube latte layered with coconut and ube-infused milk. Drink it iced, and, yes, you will finish this drink in two minutes — because it’s that good. Sometimes, I will add cold foam if I’m feeling fancy. This drink is also good as a matcha, as well. Come early to Platform Coffee because it does fill it up quickly. I love sitting by the roastery, it fills the space with such a strong aroma — it’s like getting an extra shot of espresso in your body.
I would say anything off Platform’s food menu would be the perfect pair, but I haven’t tried everything yet. Do get the breakfast burrito or the Railyard Burger if you’re coming closer to lunch time. You’ll leave here filled, warm and wanting to come back the next day if you live up the street like me.
Location: 440 E McCullough Dr #210, Charlotte, NC 28262
Vavela Cafe opened this year, and it’s a spacious Turkish cafe that offers beautiful views, delicious desserts and plenty of food options.
But the real reason this spot is a standout for me is because everyone kept raving online about the pistachio latte. Listen, this is coming from someone who doesn’t like pistachio, but this drink surprised me. From the looks of it, I thought it was going to be super sweet, but it was right in the middle.
I usually pair my drink with, of course, the Dubai Chocolate Strawberry cup and an eclair. I’m a sucker for a sweet treat with coffee. My favorite thing about this café is that there’s always somewhere to sit. Cozy, green and inspiring, perfect for getting work done.
Location: 15119 Bowl St #101, Charlotte, NC 28277
I was a little skeptical about Fly Kid Fly at first because a friend told me it could be hit or miss. But after my first few visits, I quickly realized it was a hidden gem.
The space is small, so it’s not my typical spot to work for hours, but the few times I’ve been, I’ve been able to claim a corner cubicle and loved it. The music here feels like it’s curated just for me, like someone peeked at my Spotify playlist.
Order the Cumulus: It’s an iced matcha with toasted coconut, blue spirulina, and a cloud of cream, agave and sea salt. If you’re not a coconut fan, skip it, but otherwise, this drink is a little work of art. I swear, I finished mine in under five minutes — it’s that soft, creamy and refreshing.
Location: 1824 N Brevard St, Charlotte, NC 28206
There are several locations of Night Swim Coffee, but the Brevard Street location is by far my favorite of the bunch. It throws “For The Early Birds,” a Saturday morning daytime jam session with a local DJ. Along with listening to some good tunes, it has a killer matcha colada that tastes like you should be somewhere warm with your toes in the sand. Here’s what you should get: a bag of beans. I’m serious. Night Swim Coffee, in my opinion, has the best coffee beans. My go-to bags are Bahire, which are sourced from Burundi. These bags have a lighter, fruiter taste in comparison to Ultraviolet, another bag that I frequently buy.
Aside from buying beans, my go-to is a cortado with almond milk and — hear me out — quarter-sweet simple syrup. It’s still got that velvety strong taste but with a little extra sweetness.
Location: 1609 Elizabeth Ave, Charlotte, NC 28204
Technically a market, The People’s Market serves great coffee. It’s one of those places I kept seeing on TikTok and everyone kept hyping up — and rightfully so.
Locally, this place has the best chai lattes. Now, I only drink chai from October until spring rolls around because it’s the perfect fall drink in my opinion. I get mine hot, never iced. It warms the soul, truly. It’s never not too sweet, and the aromas really sell it for me. The velvety texture of the milk and the spices really makes me feel like I’m living in an episode of Gilmore Girls, although Luke’s would never serve chai. If The People’s Market has a seasonal chai latte, like the pumpkin chai latte, do it. It’ll really put you in the mood to jump in a pile of leaves.
If you’re going in the morning, grab yourself a breakfast burrito with it and sit outside on the patio, at a table closest to the street in a corner. Or if you want something hearty with it, get a side of grits and bacon.
Location: 1133 N Wendover Rd, Charlotte, NC 28211
Tucked away off Independence and North Wendover Road, Julia’s Cafe and Books is easy to miss — but trust, you don’t want to miss this. The vibes inside are busy and bustling, but still quiet enough that it feels like you’ve stepped into a library that just happens to serve great coffee.
Julia’s is an extension of Habitat for Humanity ReStore of the Charlotte Region, so while you’re shopping, you can stop by the café and its used bookstore, which has an amazing, well-loved collection.
There’s a little bit of everything on the menu, plus some fun seasonals. But my go-to is always the cappuccino. The few times I’ve been, I’ve had it plain — just a classic cappuccino — and other times I’ve added flavor shots of toasted marshmallow or butter pecan. The cappuccino is this soft, foamy dream with smooth milk and that bold espresso kick running underneath. It’s organic, rich and the kind of drink that wakes you up and warms you up all at once. The coffee is not burnt, not bitter — just balanced.
I love sitting upstairs on the small second floor that gives off major loft vibes. If you’re nosy like me, it’s the perfect perch to people-watch and take in the cozy vibes below. But they also have nooks tucked throughout the bookstore, where each one feels like a secret spot waiting to be claimed.
Caffeto: A Colombian coffee bar, located on North Davidson Street. I went to Colombia last year and had my first bombon, and I’ve been obsessed ever since. The sweetened condensed milk and espresso combo is like having a dessert I could drink every day.
Undercurrent Coffee: It’s not on the menu currently, but seasonally, it does the best espresso and tonic water/soda combinations. If the drinks come back, get the Little Gay Tonic and the Dirty Shirley. They’re so different and refreshing.
Tamia Boyd
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Queen & Rook, the board game cafe in Queen Village, is preparing to level up with a new location that features three floors, two bars and a vintage video game arcade.
At 123 South St., the new building is mere feet away from the original spot at 607 S. Second St. The cafe closed its original location on Sunday, and there will be a grand opening to welcome gamers to the new Queen & Rook on Saturday at 12 p.m. Owners Edward Garcia and Jeannie Wong are promising a stark difference.
For starters, there’s the scale. Queen & Rook claims the new 6,000-square-foot location will make it the largest board game cafe not only in Pennsylvania but on the East Coast. (The old space was 2,000 square feet.) It will span three floors with indoor, outdoor and private event spaces and two places to order drinks: the Green Dragon Bar and Silver Dragon Bar. The cafe will also upgrade its current library of 1,300-plus board games to more than 2,000.
The new Queen & Rook at 123 South St. will include much more seating across three floors.
With the extra space comes new perks, like two outdoor seating areas and a new video game arcade. The arcade will have over 30 machines with hundreds of retro titles like Ms. Pacman, Street Fighter and Dance Dance Revolution. In between knockouts, players can order canned cocktails or beers from Yards’ 8-Bit series at the nearby bar.
Provided image/Kscope Philly
The arcade will include hundreds of classic video game titles and newer games like ‘Stranger Things’ pinball.
The menu is also getting a makeover, as Queen & Rook plans to add wood-fired pizza, housemade soft-serve and other bonus desserts this spring. The cafe has teased more vegetarian and vegan options on its Instagram.
Provided image/Kscope Philly
This shows one of two outdoor seating areas at the new Queen & Rook game cafe on South Street.
As for Queen & Rook’s adjacent retail shop The Keep, currently at 613 S. Second St., it will move next door to the new space in June. Garcia and Wong announced their plans to relocate the cafe in 2023, taking over the space formerly occupied by Pietro’s Coal Oven Pizzeria, and teased more game options and events programming. Queen & Rook hosts frequent Dungeons & Dragons sessions for kids and teens, as well as a board game and RPG after-school program. It also offers gaming camps scheduled around the School District of Philadelphia’s summer and spring breaks and other closures.
When Queen & Rook opened in 2019, it was one of the only board game cafes in Philadelphia, though not the first — that title is held by Thirsty Dice in Fairmount. Since then, the scene has expanded to University City (The Board and Brew) and Ardmore (Twenty One Pips).
This story has been updated with the square footage of the new and old Queen & Rook locations.
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Kristin Hunt
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The stock of Mediterranean-style fast-casual restaurant chain Cava Group Inc. soared 11% Monday, after analysts initiated coverage on the stock which made its debut on public markets in mid-June with a flurry of buy ratings.
At least four of the banks that were underwriters on the initial public offering — JP Morgan, Stifel, William Blair and Jefferies — assigned the stock a buy rating or the equivalent.
FactSet shows one bank has a hold rating but it’s a restricted listing so it’s not clear who it’s from.
The company
CAVA,
raised $317 million in its initial public offering, which priced above its proposed range at $22 a share and immediately rallied on opening. The company issued 14.4 million shares at a valuation of $2.45 billion. The stock was last trading at $43.83.
The company is not profitable and has high cash burn and just $23 million in cash and cash equivalents on its balance sheet, according to its IPO filing documents.
But analysts were unfazed, with William Blair analysts calling it a clear leader in a fast-growing category with proven geographic appeal.
“CAVA has hit upon a winning formula with its customizable menu of bowls and pitas featuring bold Mediterranean flavors that can fit in any dietary preference,” wrote analysts led by Sharon Zackfia.
“CAVA’s customer appeal is evident in average unit volumes (AUVs) of roughly $2.5 million and a 44% five-year revenue CAGR through 2022.”
The company accelerated its growth with the 2018 acquisition of Zoës Kitchen, “which provided immediate access to attractive real estate in new markets while enabling capital-efficient densification in top-tier trade areas (Zoës conversions roughly half the cost of a typical greenfield CAVA),” they wrote.
That has set the company up to end 2023 with roughly triple the number of locations as it had in 2020.
William Blair estimates that there’s room for at least 1,200 domestic Cava restaurants based on the population per restaurant already achieved in Virginia, where it’s still adding locations.
That supports management’s target of 1,000-plus locations by 2032.
“We also see the potential for digital drive-thrus to further lengthen CAVA’s growth runway while lifting AUVs (and potentially returns), with about one-third of this year’s new units having drive-thrus, ramping up to about half in 2024 (versus roughly 20 drive-thrus today),” they wrote. William Blair initiated coverage with an outperform rating.
JP Morgan launched coverage with an overweight rating and a December 2024 $45 stock price target. Analysts cheered the entrepreneurial sprit of Founder and CEO Brett Schulman with help from Chairman Ron Shaich, the founder of Panera Bread.
“In-store design/operational procedures and back-end support for the network allows CAVA to be efficient, safe and consistent as the brand leverages these systems for its goal national brand penetration,” they wrote in a note to clients.
Mediterranean cuisine covers many types of food and occasions, so the end-market is large, topping out at more than $1 trillion in U.S. sales.
While bowl builds priced at $10.95 to $16.95 will likely limit a high frequency of lower-income consumers, “we believe the brand has an enduring appeal to a very broad customer base for at least occasional usage.”
And suburbs are 82% of the site mix and are expected to remain a key location base, they added.
Stifel and Jefferies analysts initiated coverage with a buy rating and $48 price target. Stifel analysts led by Chris O’Cull also cheered the wide appeal of the food and compelling unit-level returns and highlighted the company’s healthy balance sheet.
“The company is in strong financial condition with no funded debt and roughly $340M in cash on hand following the company’s IPO,” they wrote in a note to clients. “We project the company’s average quarterly cash balance will remain above $200M with no funded debt for the foreseeable future. We project positive annual free cash flow starting in 2026.”
Still, not everyone is convinced the company is a buy. David Trainer, chief executive of New Constructs, an independent equity research firm that uses machine learning and natural-language processing to parse corporate filings and model economic earnings, published a series of critical reports before the IPO.
Trainer questioned Cava’s ability to reach profitability and its high valuation. He even compared it to WeWork
WE,
the infamous startup created by Israeli entrepreneur Adam Neumann, that at its peak was valued at $47 billion, but is now trading at just 26 cents a share, or a market cap of $521 million.
The Renaissance IPO ETF
IPO,
has gained 32% in the year to date, while the S&P 500
SPX,
has gained 15%.
For more, see: Fast-casual restaurant chain Cava Group’s IPO documents raise some red flags: analyst
Read now: Cava Group CFO is confident restaurant chain will be profitable—but she won’t say when
Related: 5 things to know about the fast-casual Mediterranean restaurant chain Cava
IPO investors, much like retail shoppers in recent years’ inflationary environment, are demanding clear discounts and demonstrating sensitivity to price and valuations, according to Renaissance Capital.
The provider of IPO exchange-traded funds and institutional research said that’s a positive — even if tech unicorns in the pipeline would prefer it were not the case.
“Quality consumer names are working,” said Matthew Kennedy, senior strategist at Renaissance, listing Kenvue, Cava Group Inc., Gen Restaurant Group Inc. and Savers Value Village Inc. as examples of recent new issues that enjoyed strong debuts.
Kenvue
KVUE,
the former consumer arm of Johnson & Johnson
JNJ,
and parent of household-name products such as Tylenol and Band-Aid, raised $3.8 billion in its May IPO at a valuation of $41.08 billion, making it the biggest deal of the year to date.
Cava Group
CAVA,
the loss-making Mediterranean-style fast-casual restaurant group, raised $317 million in its mid-June deal at a valuation of $2.5 billion. The stock popped more than 99% on its first day of trade.
For more: Cava Group CFO is confident restaurant chain will be profitable — but she won’t say when
Gen Restaurant Group
GENK,
is a profitable Korean barbecue chain that made its debut Wednesday with a more than 50% pop in early trade.
“But broadly investors are still demanding clear discounts to public peers, especially if they take issue with certain aspects of a deal. So it’s good to see that valuation sensitivity,” said Kennedy.
Savers Value Village
SVV,
went public Thursday with some fanfare, closing 27% above its $18 issue price. The company is the biggest for-profit thrift-store chain in North America, with 317 stores that operate under multiple names.
The company is profitable, with net income of $11.9 million in the quarter through April 2, after a loss of $10.2 million in the same period a year earlier. For all of 2022, it had net income of $84.7 million, up from $83.4 million in 2021.
Revenue for the quarter came to $327.5 million, down from $345.7 million in the year-ago period. Revenue totaled $1.4 billion for 2022, up from $1.2 billion in 2021.
See: Money-losing food chain Cava showed IPO success. Is it finally time for some tech deals?
Two other deals that made their debut on Thursday fared less well, however.
Texas-based Kodiak Gas Services Inc.
KGS,
and Fidelis Insurance Holdings Ltd. closed lower after pricing below their estimated ranges and making other accommodations to get their deals through.
Bermuda-based Fidelis, a reinsurer, downsized its deal to 15 million shares from a previous expectation that it would offer 17 million. The initial public offering was priced at $14 a share, below the proposed $16-to-$19 range.
Maker of oil- and gas-production equipment Kodiak opened almost 3% below its issue price of $16, which was well below its proposed price range of $19 to $22.
Fidelis has an unusual structure, in that it uses a third party for origination, underwriting and claims management, said Kennedy.
“We think insurance investors wanted a discount for a company that didn’t own the underwriting group,” he said. “It has an experienced management team, though, so now they’ll just need to execute.”
Kodiak, meanwhile, carries substantial debt and will need to undertake significant capital spendig in the coming years, just as gas prices have fallen back.
It’s also worth noting that the last big oil and gas IPO, Atlas, “is slightly below its offer price,” Kennedy said.
Atlas Energy Solutions Inc.
AESI,
went public in March at an issue price of $18 a share. The stock was last quoted at $17.52.
Still, Renaissance is expecting a gradual reopening of the IPO market in the second half, said Kennedy, who noted that the IPO ETF
IPO,
has gained about 30% in to date in 2023, outperforming the S&P 500’s
SPX,
14% gain.
To date, there have been 52 IPOs this year, up 33% from the same time last year, when the market was effectively frozen. Almost $9 billion in proceeds have been raised, up 115% from last year but well below levels seen in frothier times.
Cava Group, the Mediterranean-focused fast-casual restaurant chain that’s making its trading debut on Thursday, is confident it has access to enough funding to expand its business and make a profit, according to Chief Financial Officer Tricia Tolivar.
But Tolivar declined to provide a timeline to profitability in an interview with MarketWatch.
The…
Mediterranean fast-casual restaurant chain Cava Group on Wednesday priced its initial public offering of 14.4 million shares at $22 a share, up from a prior range, giving the company a valuation of roughly $2.45 billion.
Shares are expected to begin trading Thursday on the New York Stock Exchange with the ticker symbol CAVA.
The rapidly-growing…
The initial version of this story had incorrect price changes for 2023. It is now updated with information as of the market close on Jan. 31.
Investors staged a January rally, with solid gains for the S&P 500 and an even better showing for technology stocks that led the dismal downward action in 2022.
This…
It may not have been a surprise to see the consumer discretionary sector of the S&P 500 get hammered last year amid talk of a looming recession while the Federal Reserve jacked up interest rates to push back against inflation.
But the stock market always looks ahead. Following a decline of 19.4% for the S&P 500
SPX,
in 2022 and a 37.6% drop for the benchmark index’s consumer discretionary sector, this may be the time to begin looking for bargains.
And now, analysts at Jefferies have lifted the sector to a “bullish” rating.
In a note to clients on Jan. 10, Jefferies’ global equity strategist, Sean Darby, wrote: “A Goldilocks scenario might be unfolding for the U.S. consumer — falling inflation but steady employment conditions.”
He sees consumer confidence improving, in part because “households are still sitting on [about] $1.4 trillion of Covid savings.”
Darby pointed to a list of 18 consumer discretionary stocks favored by Jefferies analysts that was published on Jan. 6. Those are listed below, along with three stocks in the sector the analysts rate “underperform.”
The ratings of the Jefferies analysts for individual stocks is based on their 12-month outlooks for the companies, in keeping with Wall Street tradition.
So we have added another list further down, showing which companies in the S&P 500 consumer discretionary sector are expected by analysts polled by FactSet to increase sales the most through 2024.
Here are the 18 consumer discretionary stocks recommended by Jefferies analysts with “buy” ratings on Jan. 6, sorted by how much upside the firm sees for the shares from closing prices on Jan. 9:
| Company | Ticker | Jan. 9 price | Jefferies price target | Implied 12-month upside potential | Three-year estimated sales CAGR through 2022 | Two-year estimated sales CAGR through 2024 |
| Topgolf Callaway Brands Corp. |
MODG, |
$20.76 | $56 | 170% | 32.8% | 10.0% |
| Bloomin’ Brands Inc. |
BLMN, |
$22.08 | $35 | 59% | 2.4% | 3.7% |
| Coty Inc. Class A |
COTY, |
$9.38 | $14 | 49% | -7.1% | 3.7% |
| MGM Resorts International |
MGM, |
$37.64 | $56 | 49% | -0.1% | 6.6% |
| Chewy Inc. Class A |
CHWY, |
$40.13 | $57 | 42% | 28.0% | 10.6% |
| Planet Fitness Inc. Class A |
PLNT, |
$82.36 | $115 | 40% | 10.4% | 13.9% |
| Molson Coors Beverage Co. Class B |
TAP, |
$50.21 | $69 | 37% | 0.5% | 1.4% |
| Fox Factory Holding Corp. |
FOXF, |
$99.90 | $135 | 35% | 28.1% | 6.6% |
| Hasbro Inc. |
HAS, |
$63.70 | $85 | 33% | 9.1% | 3.6% |
| Hostess Brands Inc. Class A |
TWNK, |
$23.10 | $30 | 30% | 14.2% | 5.0% |
| Lowe’s Cos. Inc. |
LOW, |
$199.44 | $250 | 25% | 10.6% | -1.9% |
| Walmart Inc. |
WMT, |
$144.95 | $175 | 21% | 4.9% | 3.3% |
| Dollar General Corp. |
DG, |
$241.05 | $285 | 18% | 10.9% | 6.7% |
| Church & Dwight Co. Inc. |
CHD, |
$82.25 | $97 | 18% | 7.0% | 4.6% |
| McDonald’s Corp. |
MCD, |
$267.25 | $315 | 18% | 2.4% | 4.0% |
| Estee Lauder Cos. Inc. Class A |
EL, |
$261.63 | $304 | 16% | 2.8% | 5.8% |
| Mondelez International Inc. Class A |
MDLZ, |
$67.24 | $75 | 12% | 6.3% | 4.1% |
| Tapestry Inc. |
TPR, |
$41.25 | $45 | 9% | 3.3% | 3.2% |
| Sources: Jefferies, FactSet | ||||||
Click on the tickers for more information about the companies.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
The two right-most columns on the table show estimated compound annual growth rates (CAGR) for the companies over the past three calendar years and expected sales CAGR for two years through calendar 2024, based on the companies’ financial reports and consensus estimates among analysts polled by FactSet.
(We used calendar-year numbers, some of which are estimated by FactSet for prior years, because some companies have fiscal years or even months that don’t match the calendar.)
The stock pick with the highest 12-month upside potential, based on Jefferies’ price target, is Topgolf Callaway Brands Corp.
MODG,
This company has the highest estimated three-year sales CAGR on the list, and has the third-highest projected sales CAGR through 2024, after Planet Fitness Inc.
PLNT,
and Chewy Inc.
CHWY,
On Jan. 6, the Jefferies analysts also listed three stocks in the sector they rated “underperform.” Here they are, sorted by how much the analysts expect the stocks to decline over the next 12 months:
| Company | Ticker | Jan. 9 price | Jefferies price target | Implied 12-month upside potential | Three-year estimated sales CAGR through 2022 | Two-year estimated sales CAGR through 2024 |
| Lululemon Athletica Inc. |
LULU, |
$298.66 | $200 | -33% | 26.3% | 14.6% |
| Williams-Sonoma Inc. |
WSM, |
$122.17 | $98 | -20% | 14.1% | -0.3% |
| Harley-Davidson Inc. |
HOG, |
$43.25 | $39 | -10% | -2.8% | 4.4% |
| Sources: Jefferies, FactSet | ||||||
A look head at which companies are expected to increase sales the most over the next two years might serve as a good starting point for your own research.
Bear in mind that some of the companies in travel-related industries suffered declining sales for three years through 2022 because of the coronavirus pandemic. Some of those are on this new list of 20 stocks in the S&P 500 consumer discretionary sector expected to show the highest two-year sales CAGR through calendar 2024:
| Company | Ticker | Two-year estimated sales CAGR through 2024 | Three-year estimated sales CAGR through 2022 | Share “buy” ratings | Jan. 9 price | Consensus price target | Implied 12-month upside potential |
| Las Vegas Sands Corp. |
LVS, |
59.2% | -32.6% | 79% | $52.78 | $53.53 | 1% |
| Norwegian Cruise Line Holdings Ltd. |
NCLH, |
39.6% | -9.3% | 44% | $13.78 | $16.96 | 23% |
| Carnival Corp. |
CCL, |
35.2% | -14.7% | 30% | $9.47 | $10.11 | 7% |
| Tesla Inc. |
TSLA, |
34.3% | 49.7% | 64% | $119.77 | $232.43 | 94% |
| Wynn Resorts Ltd. |
WYNN, |
29.3% | -17.5% | 53% | $94.33 | $96.07 | 2% |
| Royal Caribbean Group |
RCL, |
28.4% | -6.8% | 53% | $57.29 | $66.43 | 16% |
| Chipotle Mexican Grill Inc. |
CMG, |
13.4% | 15.9% | 71% | $1,446.74 | $1,778.81 | 23% |
| Amazon.com Inc. |
AMZN, |
12.2% | 22.1% | 92% | $87.36 | $133.76 | 53% |
| Booking Holdings Inc. |
BKNG, |
11.9% | 3.9% | 63% | $2,208.41 | $2,307.67 | 4% |
| Aptiv PLC |
APTV, |
11.9% | 6.4% | 70% | $97.98 | $117.23 | 20% |
| Starbucks Corp. |
SBUX, |
11.2% | 7.2% | 42% | $104.74 | $103.44 | -1% |
| Etsy Inc. |
ETSY, |
11.1% | 45.3% | 50% | $120.99 | $124.04 | 3% |
| Hilton Worldwide Holdings Inc. |
HLT, |
10.1% | -2.9% | 38% | $129.08 | $146.17 | 13% |
| Expedia Group Inc. |
EXPE, |
9.0% | -0.9% | 50% | $93.77 | $125.65 | 34% |
| NIKE Inc. Class B |
NKE, |
8.1% | 5.8% | 62% | $124.85 | $126.15 | 1% |
| Marriott International Inc. Class A |
MAR, |
7.5% | -1.2% | 30% | $152.53 | $172.81 | 13% |
| BorgWarner Inc. |
BWA, |
7.1% | 15.3% | 53% | $42.24 | $46.93 | 11% |
| Tractor Supply Co. |
TSCO, |
6.8% | 19.0% | 61% | $217.48 | $232.34 | 7% |
| Yum! Brands Inc. |
YUM, |
6.7% | 6.4% | 47% | $129.76 | $137.79 | 6% |
| Dollar General Corp. |
DG, |
6.7% | 10.9% | 67% | $241.05 | $267.54 | 11% |
| Source: FactSet | |||||||
Among the companies on this list that didn’t suffer sales declines from 2019 levels, Tesla Inc.
TSLA,
is expected to achieve the highest two-year sales CAGR through 2022.
Dollar General Corp.
DG,
is the only company to appear on this list based on consensus sales growth estimates and the Jefferies recommended list.
Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders
The Securities and Exchange Commission said Monday it has filed charges against Stephen J. Easterbrook, former chief executive of McDonald’s Corp., for making “false and misleading” statements to investors about the circumstances that led to his ouster in November 2019.
The agency has also filed charges against McDonald’s for “shortcomings” in its public disclosures relating to Easterbrook’s severance agreement.
McDonald’s
MCD,
fired Easterbrook for exercising poor judgment and violating company policy by engaging in an inappropriate personal relationship with a McDonald’s employee. However, the separation agreement struck with the executive concluded that his termination was without cause, allowing him to retain substantial equity compensation that would have been forfeited in other circumstances.
“In making this conclusion, McDonald’s exercised discretion that was not disclosed to investors,” the SEC said in a statement.
In July 2020, McDonald’s discovered in an internal probe that Easterbrook had engaged in other, undisclosed relationships with employees. Those findings were not disclosed prior to Easterbrook’s termination, in the knowledge that they would influence the board’s decision making, according to the SEC.
“When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives,” said Gurbir S. Grewal, the SEC’s director of the division of enforcement.
The SEC is charging Easterbrook with violating anti-fraud provisions of the SEC Securities Act of 1933 and the Securities Exchange Act of 1934. Easterbrook has consented to a cease-and-desist order and five-year officer and director bar and a $400,000 civil penalty, without admitting to or denying the charges.
McDonald’s is charged with violating section 14(a) of the Exchange Act and Exchange Act Rule 14a-3. The fast-food giant has consented to a cease-and-desist order, without admitting to or denying SEC findings. The SEC has opted not to fine the company, as it cooperated with the agency and clawed back compensation after its probe.
The stock was slightly lower Monday in early trades.
Cheesecake Factory appears to be “running the same play,” wrote J.P. Morgan analyst John Ivankoe in a recent restaurant industry outlook. I don’t think he meant it as a compliment—the stock, he noted, trades where it did in 2004, adjusted for splits.
Why the long stall-out? My first thought was that maybe hitting the mall for a hypercaloric sit-down meal off a menu the size of a Gutenberg Bible has fallen out of favor over the years. But no: Sales have bounced back and then some from the Covid pandemic, with plenty of takeout business and dessert orders. The average
Cheesecake Factory
(ticker: CAKE) restaurant does more than $10 million in yearly sales, or twice as much as an Olive Garden.
Ever since Starbucks Corp. rolled out longer-term financial targets in September, Wall Street has wondered how the coffee chain might meet what analysts say were ambitious goals, as rising prices drain consumer spending. For at least the year ahead, executives on Thursday called out three ways to get there: higher prices, younger customers and cold, customizable beverages.
For the fiscal year ahead, executives for the coffee chain on Thursday said they expected global same-store sales to be “near the high end” of its long-term target of between 7% to 9% growth. FactSet expects growth of 8.6%.
When an analyst asked what gave management confidence in that target, interim Chief Executive Howard Schultz said that its coffee was an “affordable luxury,” and that it was armed with a loyalty program that it didn’t have in years past. And they said its customers were getting younger, not older.
“Not only has it gotten younger, but that young, Gen Z customer tends to have significantly more discretionary money at their disposal,” he said. “And their loyalty to Starbucks has been quite significant and predicted.”
He said Starbucks
SBUX,
had raised prices by nearly 6% over the past 12 months and hadn’t seen demand subside. And he said cold coffee beverages made up 76% percent of total drink sales in its U.S. company-owned stores. In the fourth quarter, more than half of beverages overall in those stores were customized, leading to $1 billion in sales a year for add-on syrups, foams and other ingredients.
“I think customization, which we spoke a lot about in our prepared remarks, is obviously giving us the ticket is becoming more accretive,” he said.
Management said they expect U.S. same-store sales growth of 7% to 9% for the year ahead. For China, they’re banking on “outsize” growth for the metric — interrupted by a decrease in the first-quarter — as the nation potentially emerges from pandemic-related lockdowns.
For overall revenue, they expect gains of between 10% and 12%. Management also said they would resume their buyback program in fiscal 2023.
Even as the Federal Reserve tries to chart a path to lower prices, Starbucks is the latest company to say it still has “pricing power,” or the ability to charge customers more. Snack maker Mondelez International
MDLZ,
earlier in the week, said it planned to raise prices through next year. Similarly, its own chief executive also described its snacks as an “affordable indulgence.”
Prior to the call, Starbucks reported fiscal fourth-quarter results that beat expectations, helped by a boost in U.S. sales and higher prices.
The coffee chain reported net income of $878 million, or 76 cents a share, compared with $1.76 billion, or $1.49 a share, in the same quarter last year. Revenue rose 3% to $8.4 billion, compared with $8.15 billion in the prior-year quarter.
Same-store sales rose 7% worldwide, helped largely by bigger ticket sizes, even as actual transaction volume remained muted. They were up 11% in the U.S. But international same-store sales fell 5%, with a 16% drop in China.
Excluding restructuring, impairment and other costs, Starbucks earned 81 cents per share, compared with 99 cents a year earlier. U.S. members of its loyalty program who were active for three months rose 16% to 28.7 million.
Analysts polled by FactSet expected Starbucks to report adjusted earnings per share of 72 cents, on revenue of $8.323 billion. Same-store sales were expected to rise 4.2%.
Shares rose 2.4% after hours.
As with other restaurants and retailers, Starbucks’ sales this year have been helped by price increases. Analysts have also said higher-income consumers, who might not mind higher prices as much, as well as demand for cold beverages, have propelled demand. While China’s COVID-19 restrictions have weighed on sales, analysts say demand trends are strong elsewhere.
“The U.S. business is humming, and the China risk is increasingly understood,” Wedbush analyst Nick Setyan wrote in a research note ahead of Starbucks’ earnings.
The earnings report comes as Starbucks battles a nascent unionization push at some of its stores. Some bargaining efforts between the company and the union members have stalled, amid allegations from both of bad-faith negotiations. The company over the past year has spent more to raise employee pay and rolled out other incentives at non-union stores.
Starbucks stock has tumbled 27% so far this year. The S&P 500 Index
SPX,
by comparison, is down around 22%.
When it comes to nostalgia, McDonald’s customers sure are lovin’ it.
The burger chain brought back its Halloween pails on Tuesday, which haven’t been offered in the U.S. since 2016. The plastic trick-or-treat buckets decorated to look like a ghost, a goblin or a jack-o’-lantern (aka McBoo, McGoblin and McPunk’n, respectively) quickly began trending among real-time Google searches on Tuesday.
But the appetite for these Halloween buckets is nothing compared to the recent McDonald’s
MCD,
collaboration with streetwear company Cactus Plant Flea Market, which dished out a $12-$13 box (better known as the “adult Happy Meal”) that featured a food combo and a collectible figurine targeted toward the grownups who grew up on Happy Meals.
They sold out quickly, and now some enterprising fast food lovers are hawking the adult Happy Meal toys over online resale sites for thousands of dollars.
So what’s the appeal? Nostalgia, nostalgia, nostalgia. “Everyone remembers their first Happy Meal as a kid … and the can’t-sit-still feeling as you dug in to see what was inside,” McDonald’s wrote in a press release. “And now, we’re reimagining that experience in a whole new way — this time, for adults.”
The limited-edition Cactus Plant Flea Market Box at McDonald’s rolled out on Oct. 3, feeding the inner child of the average customer by offering a choice of a Big Mac or 10-piece chicken nuggets main dish, french fries and a soft drink, as well as one of four “toys” featuring redesigned McDonald’s mascots like the Grimace, the Hamburgler and Birdie, as well as a new “Cactus Buddy!” figure (yes, the exclamation point is part of his name.)
The Cactus Plant Flea Market boxes sold out in many places on the same day that they came out. Some McDonald’s employees took to Reddit and TikTok to share how much they were not lovin’ it — which was reminiscent of the hatred many Starbucks
SBUX,
employees felt toward the viral unicorn frappuccino in 2017.
And now, both the toys and the boxes have become near impossible to come by — unless you’re willing to cough up a lot of cash. A medium Cactus Plant Flea Market Box costs about $12, with large box closer to $13 — and one New Jersey mom noted that in her area, a Big Mac combo with fries and a drink runs under $10, so she spent $3 basically get the collectible toy.
But one eBay listing offering three of the collectible Cactus Plant Flea Market, still unwrapped and in their original packaging, is asking for a whopping $300,000.
Screenshot
Another listing on the fashion marketplace Grailed, which is marked as an “authenticated” post, features the “Cactus Buddy!” figure for the asking price of $39,999 (10% off of the original $44,444 price tag.)
Screenshot
But there are dozens of other listings for the individual toys and boxes on resale sites such as eBay and Facebook Marketplace in the much more palatable $10-$30 range, or bundles with all four collectible figurines running between $60-$70.
McDonald’s was not immediately available for comment, but a rep told Axios that, “The hype for the Cactus Plant Flea Market Box was so real that some of our restaurants have sold out of the limited-edition experience.” They added that, “We’re thrilled by the excitement we’re seeing.”
The official McDonald’s Twitter account has also been fielding queries from disappointed potential customers who haven’t been able to get their hands on any of the adult Happy Meals, apologizing that this was only a limited time offer.
Time will tell if more “adult Happy Meals” will be offered in the future. There’s clearly a customer base hungry for more.
This isn’t McDonald’s first viral sensation, of course. The fast food giant has also scored success with celebrity collaborations featuring K-Pop sensation BTS, or singing diva Mariah Carey — which also reportedly sold out.
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