Casual dining traffic slowing
Casual dining traffic was down (1.9%) in August, down (3.87%) in September, and down by (6.14%) in October.
PTLO Slow Bleed
Management did a nice job propping up the stock with the NYC analyst meeting last week.
Portillo's is trading lower after hours on Monday as the company announced an underwritten public offering of 8M class A shares. Underwriters have a 30-day option to buy up to an additional 1.2M class A shares. Net proceeds will be used to buy limited liability company units of PHD Group held by existing holders and repurchase class A stock from certain existing holders, each in a synthetic secondary deal. As a result, Portillo's (PTLO) will not receive any proceeds from the offering. Once the offering closes, the total number of class A shares and class B stock will remain the same. But the number of class A shares will increase by the same amount as the decrease in the number of class B shares.
DNUT
I want to get LONG again; pricing will help, but too early to pull the trigger.
KKD reports 3Q22 adjusted EBITDA $38.5M, missing FactSet $40.3M on revenue above consensus. Margins improved significantly in the final period of the quarter "as we successfully implemented price increases in the U.S. and decreased promotional activity after Labor Day." Like many companies are saying, "Strong momentum continues into Q4 enhanced by further recent pricing actions in the U.S. and U.K. and a robust global Halloween performance." Reaffirms FY22 outlook: EPS $0.29-0.32 bracketing FS $0.30, revenue $1.49-1.52B with FS $1.51B, organic revenue +10-12% y/y, and adjusted EBITDA $189-195M below FactSet $189.0M at the midpoint; guidance includes an adjusted EBITDA impact of ~($10M)-($12M) from foreign currency translation and input costs as a result of the strengthening of the U.S. dollar or ($0.05).
