THE HBM: WEN, MCD, SBUX, YUM, BWLD, TXRH, CAKE

THE HEDGEYE BREAKFAST MENU

 

MACRO

 

Consumer

 

Today, the ICSC chain store sales index posted its second straight decline, falling 0.5% in the latest week. Year-over-year growth moderated to 3.6%, its lowest level in five weeks.

 

Confidence

 

Small businesses turned more pessimistic in July as the NFIB index fell from 90.8 to 89.9. The index has fallen for five consecutive months by a cumulative 4.7 points and puts the index below 90 for the first time since September 2010.

  • The net percent of small businesses planning to expand employment was 2%, compared with 3% in June and -1% in May.
  • Expectations for the economy to improve weakened, falling from -12% to -15% in July; this follows a sharp decline in June when expectations fell by 6%.

Subsectors

 

As earnings estimates continue to come in, Full Service continues to underperform.

 

THE HBM: WEN, MCD, SBUX, YUM, BWLD, TXRH, CAKE - subsectors fbr

 

 

QUICK SERVICE

  • WEN was reiterated Buy today by Deutsche Bank on improving brand positioning, discounted valuation, and sizeable cash position.
  • MCD was added to the Conviction Buy list at Goldman.
  • SBUX was raised to Outperform at Baird.
  • SBUX stores in New York City, at least the busy ones, have started blocking electrical outlets to discourage laptops users from taking up space for long periods of time.
  • YUM was raised to outperform at Baird.
  • On a relative basis the stock that outperformed yesterday were COSI, KKD, MCD PEET, THI, YUM, JACK and CMG.  MCD, PEET, THI and YUM stand out as being the best relative performers across multiple durations.

 

FULL SERVICE

  • BWLD was initiated Overweight at Barclays.
  • TXRH was cut to Neutral at Baird.
  • CAKE was cut to Neutral at Baird.
  • On a relative basis the stock that outperformed yesterday were: CEC, KONA, DRI, PFCB and BOBE.  KONA and DRI stand out as being two of the best relative performers across multiple durations.

THE HBM: WEN, MCD, SBUX, YUM, BWLD, TXRH, CAKE - stocks 89

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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