THE HEDGEYE BREAKFAST MONITOR
MACRO NOTES
Consumer
Initial jobless claims came in at 351k for the week ended 2/18 versus expectations of 355k and 351k the week prior (revised from 348k).
SUBSECTOR PERFORMANCE
QUICK SERVICE
JACK: Jack in the Box reported comps ahead of expectations: +5.3% at Jack in the Box and +3.8% at Qdoba versus expectations of +4.1% and +2.9%, respectively. EPS came in at $0.27 versus $0.25 expectations.
JACK: Jack in the Box was reiterated “Buy” at Lazard. The firm notes that average check appears to be improving along with better traffic, which could indicate a successful shift from heavy discounting, according to Street Account. The price target is $28.
THI: Tim Hortons reported 4Q EPS of C$0.65 versus consensus C$0.62. Comps in Canada grew +5.5% versus consensus 4.8%. U.S. comps came in at +7.2% versus 4.2% expectations. The company announced a new $200m share repurchase program.
CBOU: Caribou reported 4Q EPS of $0.14 versus consensus $0.16. Comps increased 5.6% in the quarter.
NOTABLE PERFORMANCE ON ACCELERATING VOLUME:
SONC: Sonic traded down -3.3% on accelerating volume.
PZZA: Top-line miss pushed the stock down -6.9% on accelerating volume.
CASUAL DINING
DRI: Darden prereleased 3Q (quarter ended 2/26) earnings of $1.23-1.25 versus consensus $1.19. Blended U.S. same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse for 3Q will increase approximately 4% versus 2% consensus. FY12 blended comps guidance was reaffirmed at +2.5-3.0% and FY12 EPS growth from continuing operations guidance was reaffirmed at 4-7%, consistent with prior guidance.
TXRH: Texas Roadhouse was reiterated “Buy” at Miller Tabak and the price target was raised to $21 from $19.
CBRL: Cracker Barrel PT raised to $62 at Morgan Keegan. The stock is rated “Outperform”.
NOTABLE PERFORMANCE ON ACCELERATING VOLUME:
TXRH: Texas Roadhouse gained 6.7% on accelerating volume on strong 4Q EPS.
CBRL: Cracker Barrel took a step back after trading strongly on 2QFY12 EPS.
CAKE: 1Q12 guide-down hurt the stock yesterday.
Howard Penney
Managing Director
Rory Green
Analyst