THE HBM: JACK, DPZ, SBUX, MCD, CBOU, PEET, SBUX, DNKN, DRI

THE HEDGEYE BREAKFAST MENU

 

MACRO

 

Economic Releases

 

Yesterday, it was reported that the Chicago Fed's national activity index indicates that the U.S. recovery has weakened considerably since April and is at risk of slipping further; improvement in the labor market has ground to a halt.  By contrast, the Texas Manufacturing Outlook was consistent with the weakness and uncertainty of the national economy on the one hand and the relative strength of Texas on the other.  In particular, the Employment outlook picked up significantly last month, which is consistent with our positive bias on JACK.

 

 

Commodities

 

The smallest hay crop in more than 100 years is withering under a record drought in Texas, according to Bloomberg, boosting the cost of livestock feed for dairy farmers and beef producers across the nation.

 

 

Subsectors

 

Restaurant stocks continue to trade softly with the food, beverage and restaurant categories all trading down yesterday.

 

THE HBM: JACK, DPZ, SBUX, MCD, CBOU, PEET, SBUX, DNKN, DRI - subsectors fbr

 

 

QUICK SERVICE

  • DPZ today announced 2Q EPS of $0.40 versus the Street at $0.36.  Domestic same-restaurant sales came in at +4.8% versus +3.0%.
  • SBUX Seattle’s Best Coffee cafes within Borders locations ceased operation late last week as close to 400 remaining bookstores across the country began liquidation sales over the weekend.
  • MCD is announcing plans today to provide a serving of fruit or vegetable with every Happy Meal sold in the U.S., according to the Chicago Tribune.
  • CBOU, PEET, and SBUX traded well yesterday ahead of the DNKN IPO tonight.  I published a note early this morning looking at the bubble in coffee stocks. 
  • COSI traded down 9.2% on accelerating volume.

 

FULL SERVICE

  • DRI’s Red Lobster has launched a new national advertising campaign featuring the “real people of Red Lobster”, employees and others associated with the brand sharing “unscripted” stories about the concept.


THE HBM: JACK, DPZ, SBUX, MCD, CBOU, PEET, SBUX, DNKN, DRI - stocks 726

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


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