THE HEDGEYE BREAKFAST MONITOR
MACRO NOTES
University of Michigan Consumer Confidence comes out today at 09:55 a.m. We’ll be watching for any indication of a further slump in confidence although, at least for the restaurant space, confidence hasn’t seemed to matter lately although it may begin to matter if it slumps much lower.
SUBSECTOR PERFORMANCE
QUICK SERVICE
SBUX: Starbucks announced the acquisition of juice company Evolution Fresh for $30 million in cash. The company hopes that the purchase will help Starbucks gain a foothold in the estimated $50 billion health food market. We believe that the company's strategy is to capture the upside in profits by owning these small brands in tangent categories. Starbucks' distribution channel provides a clear runway for these brands to grow rapidly.
SBUX: Starbucks is targeting 20% of customers in Malaysia to use the newly-launched pre-loaded Starbucks card. A spokesman for the company said that the card is a stored value card that offered customers convenience when purchasing merchandise at any Starbucks store nationwide.
MCD: McDonald’s is looking to capitalize on the depressed commercial property market and purchase more of the land and buildings where it operates, according to management commentary during an investor conference yesterday.
COSI: Cosi issued a letter to Brad Blum yesterday saying it would welcome his offer to lead the company for $1 if it were “sincere”.
WEN: Wendy’s was maintained “Overweight” at Barclays.
CASUAL DINING
BOBE: Bob Evans Farms was downgraded to Equal Weight from Overweight at Stephens.
Howard Penney
Managing Director
Rory Green
Analyst