POSITION MONITOR UPDATE
On Friday, October 7 @ 12:30, we are hosting a Restaurants & Consumer Staples Position Monitor update call ahead of the Q3 earnings reports.
We see opportunities for several companies with an improving earnings outlook, at the same time, we still see further downside for other companies on the short side of our position monitor. Our changes will reflect where we see the upside/downside in Quad 4. We still think it is too early to invest for what is on the other side of Quad 4. In Consumer Staples, we anticipate a Q3 earnings season that will be more selective over winners and losers. The Consumer Staples sector is historically one of the best performing sectors in Quad 4. However, the unique challenges in the current Quad 4 environment suggest to us that a basket approach to owning the entire sector is not the way to go. Elevated agriculture commodity prices, strained consumer budgets, a generational high in food inflation, fading transfer payments, and supply chain bottlenecks have created a Quad 4 environment that likely rhymes but does not repeat recent Quad 4s. We expect the list of Consumer Staples stocks outperforming in Quad 4 will narrow this Q3 earnings season as investors have less patience for companies having new issues. With heightened anxiety over the Fed's actions and the economy's resiliency, there is little tolerance for slowing outlooks. At the same time, several Consumer Staples companies will see margins inflecting in Q3 with improving top-line projections. With so many challenges in the broad market, we see a narrower group of Consumer Staples companies will be perceived as the "best house on the block."
Restaurants Subscribers CLICK HERE for event details (includes video and materials link)
BYND New Product
BYND can barely sell fake burgers, but how about Steak Tips? How big is the market for steak tips? Beyond Meat has been testing its much-anticipated plant-based Beyond Steak tips and a new variant of Beyond Chicken – ‘Beyond Popcorn Chicken’ – in select stores ahead of a wider launch. Food Navigator
SBUX Winter Menu
(One Instagram user comments, "Feel like innovation is stale, they should shake up the menu a bit.")
The same Instagram account that leaked the SBUX fall menu is back with the part of the winter lineup. "Don't mean to be the Fall Grinch," @markie_devo writes, "but here's your preview of the Starbees Winter menu." (While this information is not yet official, the account's previous fall menu prediction ended up being an accurate account of the seasonal offerings, so do with that what you will). Here's what might be in store. According to the Instagram post, consumers can expect to see the Peppermint Mocha return for its 20th year via New York Post. Last year, Starbucks rolled out its first-ever dairy-free holiday drink, the Iced Sugar Cookie Almondmilk Latte. In 2022, the beloved bevy will reportedly be back, along with the Caramel Brulée Latte, Chestnut Praline Latte, Toasted White Chocolate Mocha, and the Irish Cream Cold Brew. Consumers will once again be able to pick up packages of the seasonal Thanksgiving Blend, Christmas Blend, and Holiday Blend ground coffees. Meanwhile, the Reserve Christmas 2022 Blend will feature notes of citrus, marmalade, and "seasonal spice." Although it looks like no new drinks will be joining the 2022 Holiday lineup, Starbucks is introducing a new food item this year: the Chocolate Pistachio Swirl, a cinnamon-roll-style pastry with cream cheese filling. The kid-friendly Snowman Cookie and Reindeer Cake Pop will be returning; So will the Sugar Plum Cheese Danish and the Cranberry Bliss Bar.
