Notable news items/price action over the past twenty four hours.
- MCD is raising prices by 0.8% in Germany on higher raw material costs, Bild reported.
- TXRH reported EPS of $0.14 versus expectations of $0.16. FY11 guidance is for EPS to grow by 10% versus prior guidance of up 5-15%. 10% EPS growth implies EPS of $0.88 versus consensus of $0.94. Comps came in at 3.1% versus expectations of 2.9% and guidance for FY11 comps is 3.5%.
- TXRH also declared an 8 cent dividend.
- PZZA reported 4Q results yesterday after the close. System comps came in at 0.7% versus the street's expectation of 0.5% and EPS came in at $0.51 versus consensus of $0.48. EPS guidance of $2.00-$2.12 was reaffirmed versus consensus of $2.07 as the company believes favorable impact of early year sales will substantially mitigate the unfavorable impact of currently projected commodity cost increases throughout the remainder of the year.
- DPZ is launching a new campaign promoting a new chicken menu. The company is replacing Domino’s Chicken Kickers with a boneless chicken option. Its chicken wing recipe is also changing.
- Restaurant stocks in general declined steeply yesterday on strong volume.
- WEN, PEET, and CHUX were the only three stocks to gain on strong volume. WEN and PEET are two names I have been vocal on as of late. I see PEET as a viable target for SBUX, as I have written about at length over the past couple of weeks. WEN is a classic turnaround story and I saw the recent Analyst Day (and announcement that the firm is selling Arby’s) as an inflection point for this company (WEN: FOCUSED, REAL & UNDERVALUED, 1/28/11).
- DIN declined on strong volume, as did CAKE, CPKI, CBRL, and many other casual dining stocks.
- In QSR, KKD, SONC, CMG, JACK, CBOU and YUM were among the notable decliners.
Howard Penney
Managing Director
