Hello folks. If it seems like you're receiving Thursday's edition of the newsletter way earlier than you normally do, you're not imagining it -- we ARE delivering it a few hours ahead of schedule. There's a good reason for the earlier-than-usual-send, though.... there's some information at least some of you will want to know before the closing bell rings. We'll get to it soon enough. There are a couple of other items we want to take a quick look at first before we get to the main event.
A Jobs Data Preview... and Postview
While there's been more than an average amount of economic data to sift through this week, truth be told, none of it is going to be as important or market-moving as what's coming on Friday - last month's employment snapshot.
You may have already heard last week's new unemployment claims were near a multi-year low, at 278,000, extending a long-term downtrend and boding well for tomorrow's unemployment rate and job-growth numbers. Before we pop the champagne corks and break out the party hats though, I'll just remind you how Wednesday's ADP Employment Change (payrolls created) for January wasn't as strong as first expected. ADP says we only created 213,000 new jobs, while economists were expecting 230,000. Though the two numbers don't always follow suit, the Department of Labor's payroll growth tends to exceed or fall short of expectations to about the same degree as the ADP Employment Change figure does.
Just for some perspective I know you're not getting anywhere else, we want to plot some of the key data on a longer-term chart. A picture is worth a thousand words, right?
Here's the ADP Employment Change trend side by side -- metaphorically speaking -- with the DOL's payroll growth trend; we obviously can't plot the Department of Labor's figure for January yet, because we don't have it.
Here's the trend of not just new unemployment claims (which gets the bulk of the focus), but also ongoing unemployment claims. Both look pretty encouraging, though bear in mind neither of these figures factor in emergency unemployment claims or those folks who've simply had their benefits expire.
Finally, take a look at the unemployment rate juxtaposed with the employment/population ratio and the labor-force participation rate. The sinking unemployment rate looks pretty good on its own, but when we see the other data, we know why the unemployment trend looks good -- because more people than usual are not in the labor force at all, and they aren't technically counted as "unemployed."
I'm not saying it's scandalous or completely misleading. We're just saying the numbers may not be quite as healthy as they seem on the surface. Then again, investors may not want to worry too much about the numerical levels. The important aspect for us is the direction of these trends. In that light, there's some reason to be optimistic.
We'll have updated versions of these charts for you tomorrow. For now, let's get to today's big news.
A Big Coup For a Little Company
They say you're known by the caliber of company you keep. In the corporate world, the same principle applies, though with a twist. In business, the quality of a company can be judged by the talent level of the employees it attracts -- great people choose to work for great companies as much as great companies get their pick of the litter from the labor pool.
I make that point first just so everyone understands how big of a deal what I'm about to tell you is.
Remember Giggles N Hugs (GIGL)? This was a company we featured last year as a small cap we like, and though we're no longer technically covering it, it's one of those names you never really let out of your sight because it's just too good of a story. Today's announcement is an example of why we want to keep tabs on GIGL.
As a quick reminder for those who may have forgotten, Giggles N Hugs is a kid-oriented restaurant that serves healthy food. As rare as it is, even that description doesn't do the company justice. These restaurants are as much playground as they are eatery, and they're so much fun kids don't even notice they're eating organic veggie wraps rather than the burgers and fries found at most other child-friendly restaurants.
The usual response from those who don't know the company well is "Oh, like Chuck E Cheese?" Even that's not really a great comparison though. Sure, it's thematically similar, but Giggles N Hugs is so much more. Rather than video games and winning tickets to earn prizes, Giggles N Hugs is all about the climb-ons, story time, and a healthy menu well beyond just pizza. To be blunt, it's probably what Chuck E Cheese should have tried to morph into but never did.
More important to investors, it's a concept that works -- kids and parents love it.
The proof is in the numbers, and how they're growing. In the third quarter of last year, Giggles N Hugs Inc. sales were up 49% on a year-over-year basis, reaching $913,000 versus $615,000 in Q3 of 2013. Sales were up considerably on a sequential basis too, from Q2's top line of $822,000. That growth alone confirms the premise has been well-received by patrons, who continue to come back as more newcomers step in. This growth also bodes well for the company's planned expansion efforts. Speaking of...
Remember what we were saying above how high-caliber people choose to work for high-caliber companies? Well, Giggles N Hugs just hired a chief business development officer who's something of a rock star in the restaurant world... Philip Gay.
OK, he may not be a household name for you, but these names will ring a bell -- Philip Gay used to be the CFO of California Pizza Kitchen, and Wolfgang Puck Food Company. He was also the president and CEO of Grill Concepts. In other words, he's like a Lebron James or Tom Brady, but in the world of food rather than the world of sports. And, in keeping with the sports metaphors, he was a free agent unil recently when he signed a contract with GIGL.
We'll just come right out and say it... a guy like Philip Gay can pretty much write his own ticket anywhere he goes because he's a winner and wants to be on a winning team. He chose to team up with Giggles N Hugs. It speaks volumes about the potential he sees in the company, and the growth opportunity he sees in the foreseeable future. As an investor, it's an affiliation you may really want to chew on.
I'll leave you with a copy of the press release below, though I'll also say if this news whets your appetite, the SmallCap Network's first look serves up a much deeper examination of the opportunity.
Former California Pizza Kitchen CFO Joins Giggles N' Hugs Executive Team
Los Angeles, CA, Feb. 5, 2015 - Giggles N' Hugs, Inc. (GIGL), owner and operator of family-friendly restaurants that bring together high-end, organic food with active, cutting-edge play and entertainment for children, is pleased to announce its advisory board member Philip Gay, former CFO of California Pizza Kitchen and Wolfgang Puck Food Company, has joined the Company's executive management team as its chief business development officer.
"Giggles N' Hugs' business model aligns well with the top trends shaping the restaurant industry," stated Gay. "As an active member of the Company's executive management team, I can put my wealth of industry experience to work as we execute on our plans to expand to 25 locations over the next three years."
Gay brings nearly three decades of industry-related senior executive experience to Giggles N' Hugs. From 2004 to 2010, he served as director, president, and CEO of Grill Concepts, a publicly-traded operator of upscale casual and fine dining restaurants throughout the U.S. Previously he served as chief financial officer for California Pizza Kitchen and Wolfgang Puck Food Company, and he has held various COO and CEO positions at Color Me Mine and Diversified Food Group.
In his role as chief business development officer at Giggles N' Hugs, Gay's responsibilities will include designing and implementing processes to support business growth, as well as building and maintaining high-level contacts with current and prospective customers and partners, ultimately driving prospects through to contract award.
"Philip brings tremendous restaurant experience with some of the most recognizable eateries in the world and will be invaluable as we build Giggles N' Hugs domestically and internationally," commented Joey Parsi, founder and CEO of Giggles N' Hugs. "His leadership experience, general business knowledge, and financial expertise are just some of the reasons we originally invited him to join our advisory board last fall. We are thrilled to now have him as part of our core executive team as we begin our next phase of expansion."
About Giggles N' Hugs
Giggles N' Hugs is the first and only restaurant that brings together high-end, organic food with active, cutting-edge play and entertainment for children. Every Giggles N' Hugs location offers an upscale, family-friendly atmosphere with a dedicated play area that children 10 and younger absolutely love. We feature high-quality menus made from fresh and local foods, nightly entertainment such as magic shows, concerts, puppet shows and face painting, and hugely popular party packages for families that want to do something special.
Forward Looking Statements:
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"). Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.
Contact:
Joey Parsi
CEO/Founder
Giggles N Hugs
Joey@gigglesnhugs.com
INVESTORS RELATIONS CONTACT:
Bruce Haase
RedChip Companies, Inc.
800.733.2447, ext. 131
bruce@redchip.com