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Notable news items/price action over the last twenty-four hours.

  • PFCB earnings are in and provide another example of a low quality beat in casual dining.  A lower-than-expected tax rate helped EPS come in at $0.64, while a normalized rate would have seen earnings in line with expectations, at $0.57.  Guidance - rev now saying +3-4%, prior was MSD growth; lowered Pei Wei openings to 6-8 from 10-12 EPS growth the same.
  • Denny’s and BOBE reported latest-quarter results Tuesday that included negative sales trends blamed on tough winter weather that kept guests at home.  DENN reported 4Q operating revenues at $135.9m versus the Street at $142.5m..
  • BOBE reported 3Q EPS at $0.51 versus the Street at $0.63.  Management reaffirmed 2011 sales forecast of approximately $1.7bn versus the Street at $1.68bn
  • Bob Evans comps (0.5%) vs consensus +0.5%
  • Mimi's Cafe comps (3.2%) vs consensus (4.0%)
  • SBUX price target raised to $40 from $36 at Piper Jaffray.
  • GMCR was upgraded to Buy form Hold at KeyBanc based on a potential partnership with Starbucks and stronger Q1 brewer sales.
  • CMG was downgraded to Neutral from Outperform at Cowen and Company. 
  • Recent news that travel and tourism spending has increased is positive news for the restaurant industry.
  • GMCR got a mention yesterday in an interview with SAC’s Steve Cohen.  GMCR is one of his top picks.
  • JACK has been performing well of late.  Yesterday the stock gained 0.6% on accelerating volume. 

TALES OF THE TAPE: PFCB, BOBE, SBUX, GMCR, CMG, JACK - stocks 216

Howard Penney

Managing Director