Notable macro and industry-specific news items and price action from the restaurant space as well as our fundamental view on select names.





Corn stocks continue to nosedive. Analysts expect a 3% increase in consumption and although production is in its fifth year of record highs, supply won't match demand. Many see the steady increase in corn usage both as livestock feed, a biofuel, and the base of an ever growing group of other products as being the driving force behind the grain’s climb. In the next twelve months, it is estimated that Chinese consumption is 47% higher than a decade ago, adding to demand an amount greater than the entire crop of Brazil.



  • SBUX UK lost 34.2 million pounds sterling last year.  The chain suffered a 10 million pound hit related to the collapse of the Borders’ UK operations.
  • CMG has hired Mark Fabiani who will provide communications counsel related to an ongoing federal criminal investigation into whether the restaurant chain knowingly hired illegal immigrants. Chris Arnold, communications director for Chipotle, confirmed the hire in an email to PRWeek. Most recently, Fabiani was tapped by Goldman Sachs to help rebuild its image. He has also worked with Lance Armstrong to help defend the seven-time Tour de France winner against doping accusations.
  • JACK pulls toys from its kid's meals and redesigns the menu boards. They say they weren't bending to pressure to remove the toys, but that the toys weren't a driving factor for business. The chain’s new menu boards seek to draw attention to higher margin items and reduce clutter.
  • CBOU, PEET, KKD, TAST gained on accelerating volume on Friday. SONC and CMG declined on accelerating volume.


  • PFCB was cut to Equal Weight at Morgan Stanley. The price target embedded in the report is $51.
  • MRT and EAT gained on accelerating volume.  TXRH declined 1.5% on accelerating volume.
  • MS raises TXRH to Overweight. 




Howard Penney

Managing Director

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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