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





“Deflating the Inflation” - U.S. wheat futures closed at a six-and-a-half-month low Monday as the advancing harvest increased inventories of the grain.


With corn planting now complete, 97% of corn in the top 18 producing states has emerged according to the USDA’s latest Crop Progress report released June 20.  70% of crops were in “good” to “excellent” condition, compared to 69% last week and 75% last year.




  • MCD UK say the introduction of Wraps  is the biggest introduction to its permanent menu in four years and says it has made more changes to its menu in four years than in the previous 30. The range includes a Grilled Chicken Salad Wrap and a Sweet Chilli Crispy Chicken Wrap, and has been packaged to make them easy to eat on the move. McDonald’s is also running a wrap of the day promotion offering one wrap at £1.99.

Hedgeye: Globally, MCD continues to try to build sales around the shoulder periods of lunch. 




  • BWLD - Buffalo Wild Wings has pledged that if the players and owners compromise on their differences and come to an agreement to return to the field by July 20 - the first day players are scheduled to report to training camp - everyone who signs the "Save Our Season" petition will be awarded six free wings to be redeemed when the return of professional football is celebrated in September. 

Hedgeye:  I like this promotion, but it also tells you that sales trends without football are not going to be good. 


  • DRI - Interesting call out of Wells Fargo; Darden Restaurants estimates increased.  “Firm cites the new Seafood Feast promotion at Red Lobster and raises FQ1 and F12 estimates.”  As I wrote a few weeks back, the $15 price point at RL is an “extreme” discounting for that brand. 

Hedgeye: I know the SSS have accelerated, but the question remains about consumer preference for the promotion, especially given the double digit inflation the company is experiencing in seafood.


  • CBRL: Right when the company faces pressure from an activist investor CBRL names Coleman Peterson, apparently known as “America’s Top People Person,” to their Board of Directors. Previous executive experience includes time as the chief human resources officer for Wal-Mart Stores, Inc. 

Hedgeye: Maybe an indication the Mr. Woodhouse is just ignoring the thorn in his side.


  • DIN plans to expand IHOP to the Middle East.


  • TXRH gained on accelerating volume while PFCB and RUTH declined on accelerating volume. 




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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