THE HBM: DPZ, CBRL, KONA, BWLD

THE HEDGEYE BREAKFAST MONITOR

 

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

 

MACRO

 

Economy

 

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.

 

 

Confidence

 

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.

 

 

Subsectors

 

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

 

 

QUICK SERVICE

  • 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.

 

CASUAL DINING

  • 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

Analyst


Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more