Tuesday was an up day for U.S. markets, Treasury bonds, gold … just about anything you could want to trade. The S&P 500 climbed 0.3% higher, the Dow Jones Industrial Average finished up 0.3% and the Nasdaq Composite closed 0.5% better yesterday.
Leading today’s action is Chipotle Mexican Grill, Inc. (NYSE:CMG), which drew the eye of a well-known activist investors. Meanwhile, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) and Secureworks Corp (NASDAQ:SCWX) are on the move after reporting their latest financials.
Here’s how Wednesday morning is shaping up for these three companies.
Chipotle Mexican Grill, Inc. (CMG)
If Chipotle’s cage wasn’t rattled before, it is now, as major hedge fund manager and activist investor Bill Ackman has acquired a piece of the restaurant.
Ackman’s Pershing Square has bought a 9.9% stake in the burrito giant, saying that CMG stock is undervalued and has plenty of potential. Chipotle is in discussions with Ackman regarding management changes, including a reassignment of some Chipotle board seats.
Comparable store sales slumped 26.5% last quarter, which actually was an improvement over the previous quarter. This is all courtesy of Chipotle’s health issues of 2015, including an E. coli breakout, which gutted customers’ trust of the fast-casual change. The company has attempted to implement safety and loyalty programs, but change, it appears, has not bee enough so far.
CMG shares are set to open more than 6% higher this morning, cutting into a 14% year-to-date loss.
Dave & Buster’s Entertainment, Inc. (PLAY)
PLAY shares are headed in the opposite direction today despite quarterly results that beat estimates.
Second-quarter revenues came to $244.3 million, 55.9% of which was amusements and entertainment, and the other 44.1% of which came from food and beverage sales. Earnings of 50 cents per share came in 6 cents ahead of Wall Street estimates, but the revenue figure merely met expectations. Moreover, same-store sales were weak at just 1% improvement, missing estimates for 2.1% and sharply lower from the year-ago period’s 11%.
Outlook was disappointing too, as the company lowered its full-year comps from a range of 3.25%-4.25% to a range of 2.25%-3.25%.
PLAY stock is set to open Wednesday down about 6%.
Secureworks Corp (SCWX)
SCWX shares are looking good in premarket trading after the company’s fiscal second-quarter report.
The cybersecurity firm earned 8 cents a share for the period, topping the consensus estimate by 1 cent. Net sales for the quarter totaled $103.9 million, which is better than the $101.25 million that Wall Street had projected.
Gross margin was particularly encouraging, improving by 5 percentage points to 49 percent.
CEO Michael R. Cote said the strong period was highlighted by positive revenue growth and an increase in its digital security solutions offerings, including cyber protection in the cloud.
SCWX shares were up 1% before Wednesday’s bell.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.