PERFORMANCE
SG's First Quarter out of the BOX
SG is a Short
SG is scheduled to report 4Q21, its first quarter as a public company, on March 3rd AMC. It looks like the company has guided the street to a reasonable 4Q21 SSS number that the company can meet/beat, but it all ends there. The 4Q21 SSS estimate is +17.8% and Revenues of $84.7M. Our 4Q estimate is closer to 35%. The middle of the P&L looks like Food & beverage 28.1%. Restaurant margin 8.0%; Adjusted EBITDA ($25.9M) and EPS ($0.66). The big issues I have are the SSS estimates for 1Q22 and the year's balance. The consensus has a 13% QoQ acceleration in SSS for 1Q22 to +31.4%, then 16.8% SSS in 2Q22, implying a 50% two-year stack?
Hedgeye Same-Store Sales Estimates
FACTSET Consensus estimates look very aggressive
BROS Earnings
Accelerating unit openings is a net positive; more maturations as public equity is needed! Looking to 2H22 for an entry point.
BROS Revenue $140.1M (+52%) vs FactSet $134.7M; Adjusted EBITDA $13.3M vs FactSet $14.0M; System SSS +10.1% (previously reported at ICR). Company-operated shops revenue increased 66.1% during the quarter to $114.2M. System same shop sales grew 10.1% vs. last year and 15.3% on a two-year basis. Company-operated same shop sales grew 11.5% vs. last year and 17.3% on a two-year basis. 1Q22 Guidance of SSS up mid-single digits vs. FactSet +6.3%; Unit openings are expected to be at least 30, of which nearly all shops will be company-operated. The company accelerated unit openings "to be at least 125", of which at least 105 shops will be company-operated. Revenue $700-715M vs FactSet $690.0M; Adjusted EBITDA $115-120M vs FactSet $113.2M Same shop sales up mid-single digits vs FactSet +3.5% and Capital expenditures $175-200M vs FactSet $117.6M
DIN Earnings
DIN is a SHORT. This melting ice cube should trade closer to 1.0x sales or $58, which is 25% downside.
DIN reported 4Q21 Revenue $229.6M missing FactSet $236.6M and Adjusted EBITDA $60.1M slightly better than FactSet $56.7M 4Q22 Non-GAAP EPS of $1.32 beats by $0.05. FY 2022 guidance: assumes there are no significant disruptions to its business due to COVID-19 during 2022, except for the impact from Omicron in 1Q22. G&A is expected to range between approximately $188M and $198M, including non-cash stock-based compensation expense and depreciation of approximately $30M. "This range reflects incremental investments in technology and operational initiatives as well as unit development and is inclusive of general and administrative expenses related to the company restaurants segment." Capital expenditures $33-38M significantly higher than FactSet $18.8M. A nice (A) EBITDA miss coming in at $235-250M vs FactSet $264.6M. IHOP unit growth of between 50 and 65 restaurants and Applebee's franchisees are expected to grow little or no growth. An interesting comment from the company saying "In 2021, Applebee's concluded a strategic initiative to close underperforming domestic restaurants to improve the performance of the franchised system." While this may be true more units will need to close.
