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McDonald’s: Denis Hennequin, head of McDonald’s European operations, is leaving the company to become an executive director of Accor on December 1st after which, on January 15th, he will take over as CEO.  This is a blow to MCD; Hennequin began working for the company in 1984 as an assistant store manager and has an impressive track record. 

Cosi: Cosi continues to be one of my favorite long ideas.  As I have been writing over the past number of weeks, the company’s shrink-to-grow strategy will effectively streamline the business and increase shareholder returns over the next few years.  Sales trends are improving during all day-parts and operational initiatives are gaining traction.  At present, the stock is outperforming the QSR category in terms of share price gains on a 1 day, 30 day, and 60 day basis. 

Dine: Dine Equity reported strong results for 3Q10. Having eased balance sheet concerns by refinancing debt during the third quarter, their overall business was bolstered by Applebee’s revitalization strategy and later opening hours.  DIN’s results certainly provide a challenge to Brinker but I am holding firm in my conviction that Chili’s will take significant market share from here as their own changes are implemented throughout their system.

Peet's Coffee: Peet's reported a strong quarter after the close.  This is one of the better long-term growth stories in the space and growth will accelerate in FY11. 

TALES OF THE TAPE: MCD - stocks 113


Howard Penney

Managing Director