THE HEDGEYE BREAKFAST MENU
Notable macro data points, news items, and price action pertaining to the restaurant space.
This past week Cheese prices have declined 14.9%. On the margin this is bullish for CAKE and the company ability to hit guidance in 4Q11.
- SAFM EPS - Overall market prices for poultry products were lower in 3Q11 as cash prices for corn and soybean meal increased 84.7% and 25.8%, respectively. Management commentary - “Market prices for poultry products were significantly lower than last year’s Q3. While retail grocery store demand has remained steady, food service demand remains sluggish, and will likely remain that way until the employment market gains traction and consumers regain their confidence and return to restaurants. We also incurred significantly higher costs for corn and soybean meal, our primary feed ingredients, compared with the same period a year ago.”
- HRL reports Q3 EPS $0.36 vs Reuters $0.35; Guidance of EPS $1.70-1.75 vs prior guidance $1.67-1.73 and Reuters $1.72
- The QSR names continue to be the go-to group on market up days. See below for the names that are outperforming.
- KKD announced that it has signed new development agreements with its Japanese franchisee, Krispy Kreme Doughnut Japan Co., pursuant to which the franchisee has agreed to build 73 new locations in the Kanto, Kansai and Chubu regions of Japan over the next five years.
- YUM - The Daily Telegraph reports that KFC Australia will announce it is removing toys from its children's meals in all 600 stores Down Under. The move comes three years after the chain committed to stop advertising or actively promoting its kids menu.
- YUM - The Anti-monopoly Bureau of the Ministry of Commerce is looking into Nestle SA's takeover of Chinese candy maker, Hsu Fu Chi International Ltd, and Yum Brands Inc's acquisition of Chinese hotpot chain, Little Sheep Mongolian Hot Pot.
- DNKN and EA said they are teaming up on a six-month initiative that will feature Dunkin’ Donuts products in a version of EA’s Sims Social Facebook game.
- MCD has launched its developmental franchise business on the Chinese mainland as it seeks to accelerate development in the world's most populous market. Kunming North Star Enterprise Co, based in southwest China's Yunnan Province, on Tuesday signed a developmental franchise agreement with McDonald's - China Daily
- BH is now in a war of words with CBRL management. CBRL responds to the BH letter that we are doing nothing wrong and that you don’t know our business model very well. CBRL’s Management views restaurant and retail operations as two related and substantially integrated product lines. Furthermore, many of the operating expenses of a store cannot be broken down between restaurant and retail operations. Company states they have concluded that “separate segment disclosure of our restaurant and retail businesses is neither required nor appropriate.” (Just go away!)
- Ruth's Hospitality Group Inc. has named Cheryl J. Henry chief branding officer, replacing former chief marketing officer Jill Ramsier.