The Call @ Hedgeye | Wednesday, September 20, 2023 [REPLAY]

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TICKERS DISCUSSED LONGS: DRI, GIS, DKNG, MGM, FL, FDX, WBD, MNSO SHORTS: GOOS, ULTA, SBH, HD, LOW, FND, BBY, RDNT OTHERS: MCD

Broadcast Summary

Restaurants: Howard Penney - 00:01:16

• Long Bench – Darden Restaurants, Inc. (DRI): Will report tomorrow before the open; industry sales are slowing, so guidance could come down slightly; DRI remains on the long bench
• Restaurant Traffic: Traffic numbers are collapsing; casual dining traffic for the week ending September 4^th slowed significantly and has continued to slow; month to date September casual dining down 7%; 390 basis point deceleration for QSR; we are removing McDonald's Corporation (MCD) from our long bench

Consumer Staples: Daniel Biolsi - 00:06:27

• Long – General Mills, Inc. (GIS): Reported a 1 cent beat; sales were in-line; price mix up 6%; volume up 2%; price mix has been accelerating for several quarters; positive takeaway is that gross margins were above expectations; reaffirmed guidance and shares are up modestly pre-market; GIS remains a long

Gaming, Lodging & Leisure: Todd Jordan - 00:11:22

• Long – DraftKings Inc. (DKNG): Adoption continues to go up; states that have been around for a while continue to show strong same state growth; hold percentage continues to go up in the industry; marketing expenses for the industry going down; hosting our Online Sports Betting & iCasino Black Book on Friday (9/22) at 10:00am ET
• Vegas: Metrics continue to look very strong; Google announced they are moving one of their conventions from San Francisco to Las Vegas; Vegas airport has seen a sharp acceleration in expected airport capacity; MGM Resorts International (MGM) has their own issues including this cyber-attack, but they have insurance; metrics on both top and bottom line are very strong; MGM remains a long

Retail: Brian McGough - 00:19:44

• Long – Foot Locker, Inc. (FL): Hosting our Foot Locker Black Book this afternoon (9/20) at 12:30pm ET; we think there is going to be a major narrative change over the course of a 9–12-month time period; FL remains a long
• Short – Canada Goose Holdings Inc. (GOOS): We would press the short here; upgrade from Moody’s; the company will miss back half numbers; won’t make consensus numbers next year; GOOS remains a short
• Redbook: Numbers out yesterday; saw a deceleration to +3.6% from +4.6% a week prior; traffic still looks really bad; beauty is the impenetrable category, been strong for 3 years straight but numbers decelerated last week; want to short Ulta Beauty, Inc. (ULTA) and Sally Beauty Holdings, Inc. (SBH); home improvement saw a deceleration, we are short The Home Depot, Inc. (HD), Lowe's Companies, Inc. (LOW) & Floor & Decor Holdings, Inc. (FND); huge deceleration for consumer electronics; we are still short Best Buy Co., Inc. (BBY)

Healthcare: Tom Tobin - 00:28:57

• Short – RadNet, Inc. (RDNT): Talked to a radiologist yesterday who is based in the Midwest; confirmed a lot of the time series we are seeing in the healthcare macro data; first half of the year was very strong, but things have started to decline beginning in July; seeing volumes thin out; cost per unit (scan) has gone up significantly; RDNT remains a short

Macro, Housing & Financials: Drago Malesevic - 00:34:32

• Canadian CPI: Data released yesterday; 4% headline number, 70 basis point acceleration from the July figure; further base effect driven inflation from food which has been a huge source of these inflationary levels; acceleration in shelter inflation; we discussed red hot immigration in Canada in our Canadian Banks/Housing deck last week; excess demand for limited supply

REITs: Rob Simone - 00:40:54

• Office: There is a data set called Kastle Return to Office; in our opinion this has turned into a measure of occupancy; this is not directly a coincident indicator of how office portfolios are performing

Industrials: Jay Van Sciver - 00:45:55

• Water Infrastructure Black Book tomorrow (9/21) at 2:00pm ET
• Long Bench – FedEx Corporation (FDX): Reports after the close; probably will announce some cost cuts; will have the UPS strike tailwinds; FDX remains on the long bench

Communications: Billy Zegras - 00:54:12

• Long – Warner Bros. Discovery, Inc. (WBD): Going to start carrying live sports on Max, their streaming service, starting on October 5^th; going to be called Bleacher Report Sports; going to be free until February 24^th; max subscribers will have access to basketball, hockey, & more; stacked lineup of programming; WBD remains a long

China: Felix Wang - 00:58:03

• Long – MINISO Group Holding Limited (MNSO): Discusses the performance of the stock, referring the Risk Range signal, with Hedgeye CEO Keith McCullough

Telecom-Media Policy: Paul Glenchur - 01:00:45

• Federal Trade Commission: Moving through a few FTC confirmation hearings today in the Senate; this would be a moderating force that creates a tie if Lina Khan has to recuse herself due to conflicts
• Budget: Couldn’t move procedural bill on defense; funding the military has never really been an issue; closing in on a potential government shutdown – 10 days to go

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