THE HBM: PNRA, YUM, SBUX, CBRL, DIN

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

MACRO

Commodities

While coffee prices have declined -3.3% over the last week, prices have increased 24% since August 8thand near peak YTD levels.

THE HBM: PNRA, YUM, SBUX, CBRL, DIN - coffee 913

Subsectors

Full service restaurants outperformed peer food, beverage and restaurant subsectors as DIN and CBRL traded strongly.  CBRL reported a poor quarter this morning and is set to decline on the open, trading down -5% premarket.

THE HBM: PNRA, YUM, SBUX, CBRL, DIN - subsectors fbr

QUICK SERVICE

  • PNRA has been reiterated Overweight by Piper Jaffray with a price target of $148
  • YUM expects its Indian operations to be around $1 billion by 2015.
  • SBUX short interest has increased by 61% as of the August 31stdata versus the data as of two weeks prior.

CASUAL DINING

  • CBRL reported $1.00 in EPS for 4QFY11 versus expectations of $0.91.  The board has authorized $65mm for share repurchases.  Restaurant comps came in at -1.4% versus consensus of -0.7%.  Retail comps came in at -0.7% versus consensus of +1.2%.  Traffic declined 4.2% during the quarter while average check gained 2.8%.  Operating margins, at 6.2%, were 60 basis points below consensus. 
  • DIN’s Applebee’s Neighborhood Grill & Bar has teamed with sports channel ESPN for a fall Monday night football “Check In and Win” promotion.

THE HBM: PNRA, YUM, SBUX, CBRL, DIN - stocks 913

Howard Penney

Managing Director

Rory Green

Analyst