Notable news items and price action over the past twenty-four hours.
- BWLD reported strong earnings on Tuesday after the close and the stock gained 12.9% yesterday on strong volume. I expect trends to decelerate in the back half of the year. See the note published yesterday on BWLD for more details.
- DIN reported same-store sales for the Applebee’s system at +2.9% for Q4. Franchise same-restaurant sales increased 3.4%. Company-operated same-restaurant sales increased 0.3%, with a decline in traffic offsetting higher average check.
- CMG is reporting today after the close after a low-volume gain yesterday. The stock is trading at over 18x EV/EBITDA NTM and consensus is calling for +9.9% comps for Q4, which would be a slowdown in two-year average trends from 3Q.
- CAKE is reporting today after the close after trading sideways yesterday.
- PNRA is reporting today after the close and investors will be keen to learn of their costs outlook given the level of inflation in wheat markets and almost-daily news items of inventory building and hoarding of wheat by governments.
- COSI outperformed the QSR category yesterday after its performance moderated somewhat over the last month. The 6.5% gain, complemented by accelerating volume, left the stock at $1.47, up 10% over the last thirty days.
- COSI was initiated outperform yesterday by Northland Securities in what I believe to be the first of many people to hop on this bandwagon.
- SBUX, PEET, and GMCR declined yesterday as coffee prices rose almost 2.5% in a day. The prospect of further prices raises is clearly a concern.
- EAT traded well yesterday, gaining 4.4% on strong volume. The stock is up 12% YTD. I maintain my positive outlook on the stock as margin enhancing initiatives are implemented and sales improve.
Howard Penney
Managing Director