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Keith bought Brinker in the Hedgeye Virtual Portfolio today at $24.34. 

As I wrote in this morning's Early Look, Brinker is my favorite name in the restaurant space.  Top-line stabilization and an ongoing remodeling initiative will add to the ground the company has already made from a margin perspective.  After meeting with senior management and viewing remodeled stores in Oklahoma this past week, I am confident that this turnaround story has legs to carry on further.  The remodeling and “team service” initiatives will benefit both margins and employee morale.  The strides being made in food preparation processes will likely improve traffic and customer loyalty, and the kitchen technology improvements will enable the units to operate more efficiently. 

On the DRI earnings call, senior management emphasized that industry sales trends continues to get better.  While DRI may be underperforming today due to some issues specific to the company, it is possible that the improved performance of Chili's could be exacerbating some of Darden's problems!


Howard Penney

Managing Director