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






Initial jobless claims came in at 398k for the week ended 7/23, down 24k from the previous week’s revised number of 422k.  The four-week rolling number declined by 8.5k to 414k.


THE HBM: WEN, MCD, GMCR, EAT, PFCB, KONA - initial claims 728





Coffee was weighed down by growing inventories at European ports and assessments of crop positions in top producer Brazil improved.





Eurozone economic sentiment worsened more than expected this month.  Optimism faded in all sectors, according to the data collected by the European Commission. The European Commission Economic Sentiment Indicator has been declining since February.  The monthly index, based on a survey of businessmen and consumers across the 17-nation euro zone, fell to 103.2 in July from 105.4 in June.





Restaurants continue to underperform, confirming further a change in how these sectors trade.  For much of the past year, restaurants have been outperforming; now it seems that the space is underperforming food and beverage categories.


THE HBM: WEN, MCD, GMCR, EAT, PFCB, KONA - subsector fbr




  • WEN rated “New Buy” at Janney on accelerating same-store sales.  We wonder if the QSR industry is doing that well; MCD is also seeing strong SSS.
  • GMCR reported after the close yesterday and blew away expectations. We expect some positive flow through for the coffee space today. 



  • EAT was upgraded to “Buy” from “Hold” at Miller Tabak.  This stock has been a Hedgeye favorite for some time.
  • PFCB was cut to sector perform at RBC Capital after it put up a terrible quarter and guidance yesterday.
  • KONA is the Teflon Don of the space, at least for now.  KONA gained 7.5% on accelerating volume in a horrible tape.  We believe that there is more to come from this company in 2011 and that their remodel program will support improved trends.




Howard Penney

Managing Director


Rory Green


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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