This Week in Food and Restaurants
by Aristotle Munarriz (MF Edible)

Miami, FL (Apr. 18, 1997) -- "Stop me before I run this quote again!" With that out of my system let's look at the gold rush in the Golden Arches. Yesterday McDONALDS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCD)") else Response.Write("(NYSE: MCD)") end if %> reported earnings of $0.49 a share. While this may have been a penny below earnings estimates, the company appears to be on more solid footing even in its rough price war terrain. Margins at the company are improving, the company continues to buyback shares, and people seemed really drawn to discounted McNuggets.

If the Monopoly promotion went well, and given the quarter's 17% earnings per share improvement over last year's $0.42 showing, it seems the company has Advanced to Go and Collected $200 many times over, imagine how this current quarter will look with the wildly successful Teenie Beanie Babies promotion. Few will argue that privately-held Ty Corporation's line of animal shaped bean bag toys, Beanie Babies, is the hit of the season. Stores can't stock enough of the playthings. So, McDonald's is striking a deal to include miniature versions in the Happy Meals for a limited time, after striking a deal with Disney last year, will find kids dragging in their reluctant parents for quite some time.

THE EDIBLE EIGHT

While it was a quiet week for the current crop of E8 stock ideas the alumni was misbehaving. ROCKY MOUNTAIN CHOCOLATE FACTORY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RMCF)") else Response.Write("(Nasdaq: RMCF)") end if %> announced a restructuring charge as the company set out on closing underperforming stores. Even without the fix-it fees the company still turned out a miserable quarter, losing $.16 a share when the lone analysts following the company was expecting a $.02 a share gain. Also, J&J SNACK FOODS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSF)") else Response.Write("(Nasdaq: JJSF)") end if %> was hit with a $4.2 million judgement stemming from a sexual harrasment lawsuit.

All this and still a poor windscreen to the fact that E8 was decked for a 3.8% loss on the week. While that still lands the portfolio ahead of the Nasdaq Composite it was a bad showing from just about every stock in the list.

1997 Returns To Date:
The Edible Eight      -3.9%
NASDAQ                -5.7%
S&P 500               +2.8%

Until next week, Digest Foolishly,

MF Edible

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