Restaurants
Portillo's - The Best Of Chicago
We are hosting a PR-IPO call 10/19/21 @ 2 PM
Portillo's, a fast-casual restaurant chain known for its Chicago-style hot dogs, announced terms for its IPO. Founded in 1963, the Oak Brook, IL-based company plans to raise $375 million by offering 20.3 million shares at a price range of $17 to $20. Portillo's is looking for a market value of $1.3 billion at the midpoint of the proposed range. Portillo's serves "iconic" Chicago street food through multichannel restaurants, serving a diverse menu that includes Chicago-style hot dogs and sausages, Italian beef sandwiches, and chopped salads, among other offerings. Nearly all of its restaurants have double-lane drive-thrus and a layout that accommodates a variety of access modes, including dine-in, carryout/curbside, delivery, and catering. Currently, Portillo owns and operates 67 restaurants across nine states, and each location served, doing about $xx in average unit volumes. Portillo's generated $496 million in sales for the 12 months ended June 2021. It plans to list on the Nasdaq under the symbol PTLO.
DASH
United Natural Foods (UNFI) has partnered with DoorDash (DASH) to allow independent food retailers to use the e-commerce company's platform to offer online grocery delivery services, according to a press release on Thursday. Under the arrangement, shoppers will be able to place orders through DoorDash's marketplace app and website without needing to select a time slot or satisfy a minimum order requirement. The agreement with UNFI accelerates DoorDash's efforts to bolster its presence in the online grocery delivery space.
Consumer Staples
Black Book Invite
On Thursday we are hosting our post-pandemic Q4 grocery outlook Black Book. Our Black Book will be the first in a series focusing on the headwinds and tailwinds by sub-sector in Consumer Staples. We start with the supermarkets, where nearly everything in Consumer Staples is sold. Next, we will dig into several key topics, the setup from here, and most importantly, outline our investment recommendations for each grocer.
Hedgeye's Macro team continues to see more evidence for Quad 2 in Q4. We will show how the grocers have performed historically in Quad 2, what may be different this time, and if we should expect a repeat of the past.
Inflation is top of mind for the stock market as well as for consumer staples. Inflation is said to be suitable for the grocers, with the top-line benefit creating nominal growth. We will show if that holds true for periods of high inflation.
We hope you can join us.
Organic produce Q3 sales (SFM)
Total organic fresh produce sales for Q3 increased 3.4% YOY to $2.3B according to Organic Produce Network. Conventional produce grew 1.3%. Organic produce represented 12% of the overall produce share in dollars and 7% share in volume. Organic produce volumes grew 1.6% compared to a 2.3% decline for conventional produce. Organic berry sales, which are the largest category, grew 11% in value in Q3 and 7.3% in volume. Pre-packaged salad sales, which are the second largest category, grew 2.5% in value, but decreased 0.8% in volume. Organic tomato sales decreased 4.6% to $83M. Organic produce sales growth was strongest in the South up 4.7% and weakest in the West where it grew 1.1%.
Grocery retail sales (ACI)
On Friday, the Commerce Department reported that grocery store retail sales accelerated to 7.5% YOY growth in September from 6.6% in August. Sales accelerated in the past two months from 2-3% in July and August with the increased COVID-19 cases from the Delta variant.
