THE HBM: DNKN, BKC, CAKE

THE HEDGEYE BREAKFAST MONITOR

 

HEDGEYE VIRTUAL PORTFOLIO POSITIONS

 

LONGS: JACK, SBUX

 

SHORTS: 

 

MACRO NOTES

 

Employment

 

Initial jobless claims for the week ended 4/21 came in at 388k versus 375k expectations and 389k the week prior (revised from 386k). 

 

THE HBM: DNKN, BKC, CAKE - initial claims

 

 

Commentary from CEO Keith McCullough

 

Most Read (Bloomberg) = “Bernanke Prepared To Do More”, #sad – but our profession continues to beg for Dollar Debauchery:

  1. US Dollar – last I checked, nothing happened in Iran yesterday or on the demand side of oil other than the Buck Burning during Bernanke’s presser. This morning, you see the follow through on that as Oil and Gold push toward lower-highs.
  2. ASIA – you’d think Dollar Down = everything up, especially Tech related Asian Equity markets. Nope. Taiwan -0.55% and KOSPI up 0.1%; both remain bearish TRADE and TREND in our model which is interesting, to say the least. Hong Kong and Singapore Export demand is tanking y/y at -7% and -5% respectively for (March prints).
  3. EUROPE – 1-day squeeze and European Equities are reminded that AAPL isn’t in their indices; straight back down this morning with Spain crashing again (ie down -22% from the Feb top). DAX failing right at my intermediate-term TREND line of resistance (6688) and that’s probably the more impt callout on the margin. UK has stagflation w/ $119/brent.

 

Re-shorted the SP500 as we were waiting on the 1394 re-test.

 

SUBSECTOR PERFORMANCE

 

THE HBM: DNKN, BKC, CAKE - subsector

 

 

QUICK SERVICE

 

DNKN: Dunkin’ Brands reported $0.25 EPS ex-items versus $0.23 consensus.  Comps for Dunkin’ Donuts U.S. came in at 7.2%, with international comps growing 2.3%.  Baskin-Robbins U.S. comps grew 2.1% with international comps growing 7.6%. Management guided to U.S. comps for Dunkin’ Donuts of 4-5%.

 

BKC: Burger King announced an agreement Wednesday with the Humane Society of the United States to switch to eggs from hens not kept in cages, and to only use pork products from pigs also not kept and bred in small cages.

 

 

CASUAL DINING

 

CAKE: Cheesecake Factory missed on the top line with Cheesecake Factory concept comps coming in at 2.6% versus 2.7% consensus. Grand Lux was the big disappointment with comps of 0.3% for 1Q versus 2.8% consensus.  The company beat on EPS, however, reporting $0.37 versus $0.36 consensus thanks to operating margin coming in at 6.9% versus 6.6% consensus.

 

THE HBM: DNKN, BKC, CAKE - cake pod1

 

CAKE: Cheesecake Factory was upgraded to outperform from market perform at Raymond James.  The price target is $34.

 

THE HBM: DNKN, BKC, CAKE - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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