THE HBM: THI, DNKN, BWLD

THE HEDGEYE BREAKFAST MENU

 

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

 

MACRO

 

Consumer

 

The University of Michigan Consumer Sentiment Index came in at 54.9 versus consensus of 62 for August.  This is the lowest level for the index since the 1980’s.

 

THE HBM: THI, DNKN, BWLD - UMICH CONF

 

 

Recent gyrations in the stock market are impacting consumer preferences, as the chart below shows.

 

THE HBM: THI, DNKN, BWLD - ground beef steak

 

 

Restaurant Employment

 

Restaurant employment has hit its highest levels since the third quarter of 2007, a surprising trend that suggests operators face a difficult task in attracting and retaining employees.

 

 

Subsectors


To end a very volatile week, the full service sector underperformed.  The underperformance can be traced to the severe decline in consumer confidence and RRGB suggesting that consumer my be reacting to the decline in the market over the past three weeks.


 

THE HBM: THI, DNKN, BWLD - subsector fbr

 

 

QUICK SERVICE

  • THI raised to “Buy” at Edward Jones.
  • DNKN, according to Bloomberg News, is seeking to replicate its cult-like following in the Northeast in new regions in the U.S., particularly out west.  Hedgeye has been clear in our belief that this will be extremely difficult and costly given the existing brands in the western U.S.

CASUAL DINING

  • BWLD raised to “Buy” at Sterne, Agee, & Leach.

 

THE HBM: THI, DNKN, BWLD - STOCKS 815

 

Howard Penney

Managing Director

 

Rory Green

Analyst


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