KNAPP NUMBERS SLOW IN OCTOBER

The Knapp Track report for October shows a sequential deterioration in casual dining trends from September. 

Our estimates for Knapp Track October comparable sales and traffic were +0.5% and -0.5%, respectively.  Actual comps and traffic came in at +0.8% and -0.7%, respectively.

Estimated Knapp Track casual dining comparable restaurant sales grew +0.8% in October versus a final accounting period number of 1.9% (versus the prior estimate of 2.0%) in September and +1.2% in October 2010.  The sequential change from September to October, in terms of the two-year average trend, was -60 basis points.

Estimated comparable guest counts were -0.8% versus a September number of -0.2% (versus a prior estimate of 0.0%) and -1.2% in October 2010.  The sequential change from September to October, in terms of the two-year average trend, was -20 basis points.

We  are maintaining a favorable view of EAT on the TRADE, TREND, and TAIL durations and see the company’s positive traffic trends, at a time when the industry is seeing declining traffic, to be a positive sign.

Howard Penney

Managing Director

Rory Green

Analyst