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Notable news items, macro data points, and price action pertaining to the restaurant space.



On Friday, ISM-Chicago employment index was a big disappointment, falling from 58.7 to 51.5. The decline put the index at its lowest since December 2009 and provides further confirmation that the labor market failed to improve from June to July.  Also on Friday, despite the headline ISM-NY showing business conditions improved in July, layoffs in New York City's financial services picked up in July; conditions are still notably weaker than they were a few months ago, and the employment data show that large-scale layoffs have resumed in the city's important financial services industry.


The University Of Michigan Survey Of Consumer Confidence Index collapsed in July.  Looking at the components of the Index, it was telling that expectations came down so sharply, from 64.8 in June to 56 in July.  This is the lowest level since November 2009.  The overall Sentiment Index declined 7.8 points to 63.7 in July.  This month brought the largest decline since March and the lowest level for the Index since March 2009.   Current Attitudes declined by 6.2 points to 75.8, the lowest level since November 2009.


Full service restaurants continue to trade poorly, underperforming other food, beverage, and restaurant categories over the past month.

THE HBM: DPZ, CBRL, KONA, BWLD - subsectors fbr


  • DPZ is starting a new campaign continuing its focus on accountability and consumer feedback by posting recent direct customer feedback from its online ordering Domino’s Tracker – good and bad – on a 4,360-square-foot billboard in Times Square.


  • CBRL has named Sandra B. Cochran as President and Chief Executive Officer.  Currently she is President and Chief Operating Officer.  She will assume her new role on September 12th.  Michael Woodhouse, currently Chairman and Chief Executive Officer, will become Executive Chairman upon Cochran assuming her new role.  James Bradford has been appointed to the Board of Directors, effective immediately.  Robert Hilton and Jimmie While have informed the company that they do not intend to stand for re-election at the 2011 AGM.
  • KONA has closed a restaurant in West Palm Beach that had been underperforming.  Interim President and Chief Executive Officer Mike Nahkunst said that the company believes that the closure will ultimately improve further profitability.  As a result of the closure, KONA lowered its sales guidance by $400,000.
  • BWLD may rise to $74 as the NFL labor dispute ends and a full schedule of games begins, according the Barron’s “The Trader”, citing Deutsche Bank.

THE HBM: DPZ, CBRL, KONA, BWLD - stocks 81

Howard Penney

Managing Director

Rory Green