THE HBM: TXRH, SBUX, BKC, CMG

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

 

THE HEDGEYE BREAKFAST MENU

 

Consumer

 

The increase in gas prices seen in July has been arrested by global economic growth concerns.  Despite weakness in the dollar of late, gasoline prices have still been trending down so far this month.

 

THE HBM: TXRH, SBUX, BKC, CMG - gasoline chart

 

 

Subsector

 

Casual dining continues to underperform peer groups in the food, beverage and restaurant spaces.  EAT is the only name in casual dining to have outperformed the SPX over the past month.

 

THE HBM: TXRH, SBUX, BKC, CMG - subsectors fbr

 

 

QUICK SERVICE

  • CMG was raised to Outperform from Market Perform at Morgan Keegan.  The 12-month price target is $330.
  • CMG was moved to reveal that bacon is an ingredient in its pinto beans by the tweeting of journalist Seth Porges, who was surprised to learn – as a non-pork eater – that the pinto beans he had been eating for 10 years contained bacon.
  • BKC has ousted its King character as the first of many steps towards reinventing itself over the next year.  A new ad campaign is set to air this weekend rolling out the California Whopper.
  •  SBUX has agreed to pay £45,000 to settle a disability discrimination case brought on behalf of a Texan barista who claimed she was fired because she has dwarfism.

 

CASUAL DINING

  • TXRH CEO G.J. Hart is leaving the company to assume the role of Chairman and CEO of CPKI.

THE HBM: TXRH, SBUX, BKC, CMG - stocks 819

 

 

Howard Penney

Managing Director

            

 

Rory Green

Analyst


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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