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What to Watch on Wall Street: Grocers, Restaurants Provide Food for Thought

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MENLO PARK, CA - APRIL 04: A Facebook employee holds a phone that is running the new
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You can never know in advance what news will move the market in a given week, but some things you can see coming. From a mysterious media event unveiling at the world's most popular social networking website to a struggling restaurant operator's latest opportunity to impress investors, here are some of the items that will help shape the week that lies ahead on Wall Street.

1. Facebook Sends a Friend Request: There was no shortage of tech giants with major announcements last week, but now Facebook (FB) wants some time in the spotlight. The world's largest social networking website operator is inviting tech journalists to a press event at its Menlo Park headquarters.

"A small team has been working on a big idea," read the invitation. "Join us for coffee and learn about a new product." Is Facebook introducing its own coffee? If you think that, you probably read the invitation the wrong way. It's always fun to speculate on what Facebook is cooking up, but it's more than likely a new way to monetize its more than a billion active users.

2. When You're Here, You're Family: Things haven't been going so well at Darden Restaurants (DRI).
The parent company of Olive Garden, Red Lobster, and LongHorn Steakhouse has been struggling. Same-restaurant sales of the three flagship chains clocked in 4.6 percent lower than a year earlier in the company's most recent quarter.

Consumers have been moving away from casual dining. They're either trading up to more upscale fare or trading down to the fast casual eateries that provide quality food at lower prices without having to wait. We'll see if Darden is bouncing back on Friday with its next quarterly report.

3. Delivering the Goods: Analysts see Darden posting a decline in profitability this week -- and that's not a surprise -- but it is stunning to see FedEx (FDX) also expecting to post lower earnings this time around.

FedEx reports quarterly results on Wednesday, and Wall Street's bracing for net income of $1.96 a share -- surprising given that the speedy delivery service generated a profit of $1.99 a share a year earlier during the same period. Despite the recent decline in fuel costs, FedEx is slipping. Making matters worse, FedEx has actually missed analyst estimates in its two previous quarters, so maybe $1.96 a share is overly ambitious.

4. Monsters Ball: Disney's (DIS) Pixar has been a hit factory in the realm of computer animation, but the last time that the studio went for a sequel -- "Cars 2" -- critics panned the production. "Monsters University" -- a prequel to Pixar's popular "Monsters, Inc." -- opens on Friday. The original movie raked in $562.8 million in ticket sales worldwide.

Disney has already had a successful year at the box office. It has 2013's two highest grossing movies so far in "Iron Man 3" and "Oz The Great and Powerful." Given the way Disney can turn its animated features into merchandising goldmines, it's naturally hoping to land another big winner here that it can exploit through its theme parks, stores, and cable properties.

5. Groceries Check Out: Supermarkets have historically been all-weather investments. In good times and bad times, people have to eat. And when the economy hits those rough patches, more consumers switch to cheaper store-brand generics that actually deliver higher margins for grocers.

However, many supermarket investors have been burned lately. Some grocery store operators have slashed dividends, suspended payouts, and even sold off assets as their financial performances are slipping.

That hasn't been the case with Kroger (KR). The supermarket chain has been able to serve up consistent growth, delivering dividend increases along the way. Kroger reports on Thursday, and analysts see another period of top- and bottom-line growth.



Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Facebook, FedEx, and Walt Disney. The Motley Fool owns shares of Darden Restaurants, Facebook, and Walt Disney. Try any of our newsletter services free for 30 days.

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tommarvick

I APPRECIATE ALL THE NEWS And the dividend hold backs and all that matereeial thank you tom

June 17 2013 at 8:31 PM Report abuse rate up rate down Reply