The California State Controller released the Statement of General Fund Cash Receipts and Disbursements for September 2011.
The monthly report issues yesterday by CA State Controller John Chiang covers the state’s cash balance, receipts and disbursements in September. Revenues came in below projections from the recently passed state budget. Chiang said that “September's revenues alone do not guarantee that triggers will be pulled. But as the largest revenue month before December, these numbers do not paint a hopeful picture.”
We focus on Retail Sales and Use Tax Receipts as one data point pertaining to the health of the consumer in the Golden State. For the quarter ending September 30th, this figure dropped over 21% year-over-year. Below, we chart this trend on a one- and two-year basis versus CAKE blended same-store sales. The 3Q11 CAKE number (yellow bar) is a hypothetical comp arrived at by assuming that the two-year average trend in CAKE’s comparable sales trend holds flat. We do not have access to enough data points to infer a meaningful correlation between these two metrics but certainly do not see the drop in retail sales tax receipts as bullish for the prospects of any restaurant/retail businesses with exposure to California. 20.7% of CAKE’s store base is in California. BJRI and PFCB also have 50% and 14%, respectively, of their restaurants in California.
Howard Penney
Managing Director
Rory Green
Analyst
