Shake Shack shares jump in NYSE debut
Shares of Shake Shack Inc. soared in the restaurant chain's debut on the New York Stock Exchange after raising $105 million in an initial public offering amid strong investor demand.
Shares of the burger chain more than doubled, rising $24.90 to close at $45.90. Shake Shack, owned by restaurateur Danny Meyer, sold 5 million shares for $21 apiece as part of the IPO, according to a statement Thursday, after offering them for $17 to $19 each. The company this week raised the range from $14 to $16. The stock listed under the symbol SHAK.
The company had a modest beginning, opening in 2001 as a project to help support the restoration of Manhattan's Madison Square Park. Three years later, the first official Shake Shack was born, and it wasn't until 2008 that the company started expanding. It now has 63 stores from Chicago to Dubai, which sell burgers, fries and frozen custard, and at the IPO price, boasts a valuation of about $746 million. Following Friday's gain, the market value is almost $1.8 billion.
Shake Shack plans to open 10 new company-operated stores each year in the U.S. starting in 2015. Part of its proceeds will be used toward expansion and renovating existing stores. Additionally, Shake Shack plans to use the proceeds to make a payment to Meyer and early backers such as Leonard Green & Partners LP and to repay debt.
-- Bloomberg News
Consumer sentiment highest since '04
WASHINGTON -- U.S. consumers are more confident than they've been since January 2004.
The University of Michigan said Friday that its index of consumer sentiment rose to 98.1 in January from 93.6 last month.
Consumers say the prospects for the U.S. economy are the strongest in a decade, and half of consumers expect the expansion to keep going another five years. Over the past six months, households with annual incomes of less than $75,000 have reported gains in confidence as big as households with higher incomes.
Still, most consumers are expecting only modest wage income gains, which could constrain their spending. "Without sufficient wage gains, consumers will be forced to demand large price discounts to complete their purchases," said Richard Curtin, chief economist for the Michigan survey.
The Michigan survey was the latest evidence that an improving economy and tumbling oil prices have lifted consumers' spirits. The Conference Board on Tuesday reported that its consumer confidence index climbed to the highest level since August 2007.
And the Commerce Department reported Friday that consumer spending rose from October through December at a 4.3 percent annual pace, fastest since the first three months of 2006.
Underlying consumers' improving mood: The job market is the strongest it's been in years. Employers last year added nearly 3 million jobs, the most since 1999.
-- The Associated Press
German beer sales increase 1% in year
BERLIN -- The Federal Statistical Office says German breweries saw their first increase in sales volume in 2014 after seven years of declines.
The office said Friday that overall sales of German beer in 2014 were about 2.525 billion gallons, an increase of 1 percent over 2013.
Domestic consumption accounted for 83.7 percent of the volume and rose 0.4 percent over the previous year.
The Statistical Office did not speculate why consumption rose, but 2014 featured the football World Cup, which Germany won. The country saw its last increase in beer consumption in 2006 -- when Germany was the World Cup host, though finished third.
-- The Associated Press
Judge: POM Wonderful ads unsupported
POM Wonderful LLC's claims that its pomegranate products combat heart disease, prostate cancer and erectile dysfunction aren't adequately backed by research, a federal appeals panel ruled, upholding a Federal Trade Commission ban on deceptive advertising by the company.
"We see no basis for setting aside the commission's conclusion that many of POM's ads made misleading or false claims," U.S. Circuit Judge Sri Srinivasan wrote for a three-judge panel. "The FTC proscribes -- and the First Amendment does not protect -- deceptive and misleading advertisements."
The ruling is a setback in POM's aggressive marketing of pomegranates, which includes a successful challenge in the U.S. Supreme Court to Coca-Cola Co., the world's largest beverage company, over its labeling of products containing the juice of the heavily seeded fruit.
POM's owners, Stewart and Lynda Resnick, introduced the garnet-red juice in 2002, touching off a marketing craze of flavored fruit teas, martinis and salad dressings. The Resnicks are the biggest U.S. growers of pomegranates and pistachios.
-- Bloomberg News
EasyJet says Heathrow best for runway
EasyJet Plc, the biggest carrier at London Gatwick airport, said the U.K. capital's Heathrow hub is the best location for additional runway capacity, delivering a blow to the campaign to enlarge its own base.
"Long-haul airlines want to expand at Heathrow, and if they can't, they will do so not at Gatwick but at other airports such as Paris, Amsterdam and Frankfurt," Chief Executive Officer Carolyn McCall said in a submission to the state-appointed Airports Commission. "Expansion at Heathrow would provide the greatest passenger and economic benefits."
Heathrow and Gatwick are going head-to-head in the runway contest after being short-listed in preliminary findings from the commission, led by economist Howard Davies. At Heathrow, a new 2.2-mile landing strip could be built for $28 billion or the northern runway lengthened for $20.3 billion, while Gatwick's proposal would see a second runway built for $14 billion, Davies said in November.
"EasyJet will take a position based on its own narrow commercial interests," Gatwick said separately. The government decision will require "balancing what is best for both the economy and the environment," the airport said.
-- Bloomberg News
Business on 01/31/2015