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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 24, 2012


As we look at today’s set up for the S&P 500, the range is 25 points or -1.45% downside to 1331 and 0.41% upside to 1356. 

                                            

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - one

 

THE HEDGEYE DAILY OUTLOOK - two

 

THE HEDGEYE DAILY OUTLOOK - three

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 07/23 NYSE -1601
    • Down versus the prior day’s trading of -1007
  • VOLUME: on 07/23 NYSE 742.90
    • Decrease versus prior day’s trading of -25.90%
  • VIX:  as of 07/23 was at 18.62
    • Increase versus most recent day’s trading of 14.44%
    • Year-to-date decrease of -20.43%
  • SPX PUT/CALL RATIO: as of 07/23 closed at 1.23
    • Down from the day prior at 1.99 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 36
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.43%
    • Unchanged from prior day’s trading
  • YIELD CURVE: as of this morning 1.22
    • Unchanged from prior day’s trading

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook retail sales
  • 8:45am: Fed’s Bernanke speaks to the Children’s Defense Fund National Conference on early childhood education via prerecorded video
  • 10am: Markit US PMI Preliminary, July, est. 52 (prior 52.9)
  • 10am: Richmond Fed Manuf Index, July, est. -1 (prior -3)
  • 10am: FHFA House Price Index M/m, May, est. 0.4% (prior 0.8%
  • 11am: Fed to purchase $1.5b-$2b notes due 2/15/36-5/15/42
  • 11:30am: U.S. to sell 4-wk, 52-wk bills
  • 1pm: U.S. to sell $35b 2-yr notes
  • 4:30pm: API inventories 

GOVERNMENT:

    • House, Senate in session
    • Senate hearing on consumer impact of broadcast-cable disputes: CBS, TWC
    • Senate Judiciary holds hearing on super PACs, 2:30pm
    • Senate Energy holds hearing on natural gas and transportation, 10am
    • House Energy hears from Chairman Allison Macfarlane, three NRC commissioners at oversight hearing, 10am
    • House Financial Services’ Consumer Credit subcommittee hearing on legislation to create a federal charter for non- depository lenders, 10am
    • House Financial Services Insurance Subcommittee hearing on Dodd-Frank Act’s impact on insurance industry, 2pm
    • Senate Banking Subcommittee on Financial Institutions and Consumer Protection holds hearing “Private Student Loans: Providing Flexibility and Opportunity to Borrowers;” Sallie Mae President Jack Remondi to testify, 2:30pm
    • NHTSA hearing on proposal to mandate anti-rollover technology in heavy-duty trucks, 10am
    • U.S. Chemical Safety Board releases preliminary findings from the investigation into BP’s 2010 Macondo well explosion in the Gulf of Mexico, 9:05am
    • International Swaps and Derivatives Association holds a Dodd-Frank Transaction Reporting Conference to review requirements’ impact on participants in the $648t global swaps market, 8:15am in New York
    • CFA exam level I & II results are e-mailed after 9am 

WHAT TO WATCH: 

  • Germany pushes back after Moody’s lowers rating outlooks
  • Goldman Sachs, Bain Capital and Carlyle urged federal judge to dismiss lawsuit accusing largest investment banks, P/E firms of conspiring to rig bids on leveraged buyouts
  • Treasury Secretary Timothy Geithner said President Obama “absolutely committed” to letting tax cuts for wealthiest Americans expire as scheduled, in interview on “Charlie Rose” show yesterday
  • Apple lost Dusseldorf appeals court bid to ban sales of Samsung Electronics’s Galaxy 10.1N tablet computer
  • Rosneft starts talks with BP on buying stake in Russia venture
  • Compensation consultant to Best Buy’s board quit after company awarded more than 100 managers retention bonuses without tying them to performance
  • China manufacturing gauge shows slowdown may be ebbing
  • Spain’s borrowing costs rise at 3-mo. bill auction
  • Home values posted first Y/y increase since 2007 in 2Q as U.S. property market began to lift off bottom, Zillow said
  • Apple plans to send security manager to Black Hat USA 2012 to discuss iPhone, iPad, making first appearance at one of the hacking world’s largest conferences
  • U.S. Chemical Safety Board releases preliminary results from BP/Macondo investigation 

EARNINGS:

    • Spirit Airlines (SAVE)  5:45am, $0.47
    • RF Micro Devices (RFMD) 4pm, $0.01
    • Whirlpool (WHR) 6am, $1.69
    • Total System Services (TSS) 4pm, $0.32
    • EI du Pont de Nemours (DD) 6am, $1.46
    • FMC Technologies (FTI) 4pm, $0.48
    • Polaris Industries (PII) 6am, $0.91
    • Edwards Lifesciences (EW) 4pm, $0.65
    • Synovus Financial (SNV) 6am, $0.02
    • Buffalo Wild Wings (BWLD) 4pm , $0.68
    • Centene Corp (CNC) 6am, $(0.10)
    • Panera Bread (PNRA) 4pm, $1.43
    • NorthWestern (NWE) 6am, $0.29
    • Hatteras Financial (HTS)  4pm, $0.89
    • Potlatch (PCH) 6:45am, $0.09
    • Robert Half International (RHI) 4pm, $0.35
    • Rogers Communications (RCI/B CN) 6:47am, C$0.86
    • Norfolk Southern (NSC) 4:01pm, $1.53
    • Altria Group (MO) 6:58am, $0.57
    • Nabors Industries (NBR) 4:01pm, $0.37
    • Reynolds American (RAI) 6:58am, $0.76
    • Illumina (ILMN) 4:01pm, $0.37
    • EMC (EMC) 7am, $0.39
    • American Campus Com. (ACC) 4:01pm, $0.49
    • Simon Property Group (SPG) 7am, $1.81
    • Ezcorp (EZPW) 4:01pm, $0.62
    • Biogen Idec (BIIB) 7am, $1.56
    • Questcor Pharmaceuticals(QCOR) 4:02pm, $0.65
    • Lexmark International (LXK) 7am, $0.88
    • Thoratec (THOR)  4:02pm, $0.44
    • Penn National Gaming (PENN) 7am, $0.64
    • TripAdvisor (TRIP) 4:03pm, $0.41
    • Western Union (WU) 7am, $0.43
    • Broadcom (BRCM) 4:05pm, $0.67
    • Ametek (AME) 7am, $0.46
    • Netflix (NFLX) 4:05pm, $0.05
    • Regions Financial (RF) 7am, $0.14
    • Juniper Networks (JNPR) 4:05pm, $0.16
    • Husky Energy (HSE CN) 7am, $0.36
    • Tempur-Pedic International (TPX) 4:05pm, $0.38
    • Under Armour (UA) 7am, $0.05
    • Riverbed Technology (RVBD) 4:05pm, $0.21
    • Pentair (PNR) 7am, $0.80
    • Polycom (PLCM) 4:05pm, $0.20
    • Waters (WAT) 7am, $1.16
    • Aflac (AFL) 4:07pm, $1.61
    • AT&T (T) 7:25am, $0.63
    • Compuware (CPWR) 4:13pm, $0.07
    • Rockwell Collins (COL) 7:30am, $1.15
    • Aaron’s Inc (AAN) 4:15pm, $0.47
    • Domino’s Pizza (DPZ) 7:30am, $0.46
    • CH Robinson Worldwide (CHRW) 4:15pm, $0.71
    • Anixter International Inc (AXE) 7:30am, $1.50
    • International Game Tech. (IGT) 4:15pm, $0.29
    • FirstMerit (FMER) 7:30pm, $0.28
    • Altera Corp (ALTR) 4:15pm, $0.39
    • PrivateBancorp (PVTB) 7:30am, $0.16
    • Cymer (CYMI) 4:25pm, $0.04
    • Lockheed Martin (LMT) 7:30am, $1.91
    • WR Berkley (WRB) 4:29pm, $0.61
    • United Parcel Service (UPS) 7:45am, $1.17
    • Apple (AAPL) 4:30pm, $10.37
    • Ryder System (R) 7:55am, $0.93
    • Unisys (UIS) 4:30pm, $0.51
    • Illinois Tool Works (ITW) 8am, $1.10
    • Trustmark (TRMK) 4:30pm, $0.44
    • Sigma-Aldrich (SIAL) 8am, $0.97
    • Linear Technology (LLTC) 5pm, $0.45
    • Paccar (PCAR) 8am, $0.81
    • Ctrip.com (CTRP) 5pm, $0.20
    • Peabody Energy (BTU) 8am, $0.53
    • Range Resources (RRC) 5pm, $0.06
    • Six Flags Entertainment (SIX) 8am, $0.73
    • Bell Aliant (BA CN) 5pm, $0.43
    • Gentex (GNTX) 8am, $0.29
    • Acadia Realty Trust (AKR) 5pm, $0.24
    • Lennox International (LII) 8am, $0.96
    • Valmont Industries (VMI) 5:30pm , $2.16
    • Liberty Property Trust (LRY) 8am, $0.63
    • Cabot Oil & Gas (COG) 5:31pm, $0.06
    • Wabtec (WAB) 8:05am, $1.23
    • Suncor Energy (SU CN) After-mkt, $0.73
    • Avery Dennison (AVY) 8:30am, $0.54
    • Community Bank System (CBU) Aft-mkt, $0.50
    • Neogen (NEOG) 8:45am, $0.26
    • Newfield Exploration (NFX) Aft-mkt, $0.64
    • Carlisle (CSL) Bef-mkt, $1.28
    • UMB Financial (UMBF) Aft-mkt, $0.69
    • Jarden Corp (JAH) Bef-mkt, $1.10
    • Rock-Tenn (RKT) Aft-mkt, $1.02 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – bearish TREND; bullish TRADE; we’ll stay short it with a wall of TREND line resistance up at $108.37 Brent. The only thing that can get US and Chinese Growth back on track is a sustainable drop in Brent back below $90. With Qe drug addictions in this market’s whisper, good luck with that. 

  • Europe Heat Wave Wilting Corn Adds to U.S. Drought: Commodities
  • China Ousts U.S. in Canada Oil Market With Bid for Nexen: Energy
  • Investors Plow Cash Into Crops as Gold Jilted: Chart of the Day
  • Crude Trades Near One-Week Low on Worsening European Crisis
  • Copper Seen Rising as China Factory Contraction May Be Slowing
  • Corn, Soybeans Tumble on European Risk, Forecast for Some Rains
  • LNG Goes Extra 9,800 Miles as Europe Spurs Record Rates: Freight
  • Cocoa Climbs on Speculation El Nino Will Cut Output; Sugar Falls
  • U.S. Gas Futures Near Seven-Month High on Warm Weather Forecasts
  • U.K. Natural Gas for Today Advances as Norwegian Imports Decline
  • Illinois Corn, Soy Yields Drop From 2011, Doane Crop Tour Shows
  • South Korea Buys 6,000 Tons of High-Grade Aluminum in Tenders
  • Cocoa Usage Seen Falling as Processors Erode World Butter Glut
  • Copper Gain Seen as New-Home Sales Spur Demand: Chart of the Day
  • Gold Set to Decline in London as Europe Concern Bolsters Dollar
  • Morgan Stanley Increases 2012 U.S. Gas Price Forecast by 14% 

THE HEDGEYE DAILY OUTLOOK - four

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - five

 

 

EUROPEAN MARKETS


GERMANY – for once we actually agree with a Moody’s move on the margin; Germany’s #GrowthSlowing slope has accelerated on the downside in the last 6 weeks, and that matters. This morning’s PMI print of 43.3 for July in Germany is an absolute bomb (45.0 in June) – German GDP growth could easily go negative y/y in Q3 (consensus has it up +0.5%).

 

THE HEDGEYE DAILY OUTLOOK - six

 

 

ASIAN MARKETS


HANG SENG – nasty 2-day 4% drop in a major leading indicator in our model that certainly trumps whatever flash there was in the made-up HSBC PMI print of 49.5; Hang Seng, like KOSPI, is now back into a Bearish Formation (both of these indexes have led the SP500 and German DAX since March, so watch them both closely – Asian Growth is Too Big to Bail).

 

THE HEDGEYE DAILY OUTLOOK - seven

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - eight

 

 

 

The Hedgeye Macro Team

 



Too Big To Bail

“It occurs at first very slowly, then all at once.”

-Ernest Hemingway

 

That’s what Hemingway said about going broke. That’s also what I said in response to my research team’s questions in the morning meeting yesterday about levered sovereign nations and their banks. From a time and price, this entire thing becomes Too Big To Bail. If it wasn’t, why are the Spaniards banning short selling?

 

But do people really believe they won’t be bailed out? Listening to the sad whisper of Qe Begging each and every market day, I’m not so sure. While the likes of Timmy Geithner may believe “deeply” that it would be “irresponsible” to not raise taxes, this economy is digging into a deepening hole that some of these banks may not be able to exit without the government’s hand.

 

But how many hands does the US government have? How many Spanish and Italian banks is Geithner going to have to attempt to bailout via the US tax payer backstopped IMF? How much time does the government have in a stagflating economy to bailout a domestic bank like Morgan Stanley? If it’s happening All At Once, neither you nor I know.

 

Back to the Global Macro Grind

 

As Keynesian central planners around the world continue to spin their wheels looking for the next “growth policy”, they continue to perpetuate #GrowthSlowing by piling more debt-upon-debt.

 

As Growth Slowing’s Slope accelerates on the downside, some of the few remaining leading indicators that were relatively stable for the last 6 weeks are now showing signs of the same economic gravity that has gripped them since March:

  1. Hong Kong’s Hang Seng Index – down -3.8% in the last 2-days has once again snapped intermediate-term TREND support
  2. Italy’s MIB Index – down -13% from its July high has snapped its YTD closing lows established at the end of May
  3. USA’s Russell 2000 – down -5% from its early July high has snapped both its TRADE and TREND lines of support

Oh snap.

 

All the while, some investors are obviously getting whipped around, buying high and shorting low. But that institutional performance chasing problem isn’t nearly as problematic as the causality driving the whip.

 

The worse the global economic data gets, the more Qe begging for bailouts the market hears. The more they beg, the more the government creates an expectation that they’ll be there to bail them out. These expectations are now in and of themselves becoming the market’s biggest risk.

 

Now, you could say that “growth expectations are low and stocks are cheap.” If I hear that a dozen times a day, I see it tweeted 100x over. So that’s consensus. It’s also what consensus has been saying since March. Growth continues to surprise on the downside and “cheap” stocks keep getting cheaper.

 

Looking at the Big Macro Data this morning, you can say whatever you want to say – but the data is the data:

  1. German PMI (manufacturing index) tanked in July at 43.3 versus 45.0 in June
  2. Chinese “flash” PMI rose in July from 48.2 to 49.5
  3. Brazilian inflation rose “surprisingly” on the mid-July reading back up to 5.2%

Hedgeye Playbook: get the slopes of Growth and Inflation right (sequentially) and you’ll get a lot of other things right:

 

1.   GROWTH: given that any PMI reading below 50 is just plain bad, you can call the growth data better than awful in China – but, at the same time, agree with Moody’s that Germany’s economic growth picture is, well, awful.

 

2.   INFLATION: that’s the most important Global Macro inflation data point we’ve had so far in July (primarily because it’s one of the few July numbers that have been reported!). This is the first sequential uptick in Brazilian inflation since September.

 

Does anyone remember September 2011? Ooh-lah-lah. Lots of bad stuff started happening to markets All At Once. In a #GrowthSlowing global economy, marginal food/energy price inflations also slow growth further.

 

Whether you go back to the July 2011 highs in stocks or commodities (and trace a draw-down line to the October lows), you’ll see the same thing. The world’s growth slowed, All At Once, after the Qe2 sponsored commodity price inflation shocks of July-August.

 

Now, I’ll be the first to agree, this is not 2011. This isn’t 2008 either. This Time Is Different! This is 2012. And, oh my, does the entire world have more sovereign and bank liquidity issues today than Lehman or Greece did in either of those periods. In 2012-2013, this globally interconnected web of debt, banks, and broken political promises might just be Too Big To Bail.

 

My immediate-term support and resistance risk ranges for Gold, Oil (Brent), US Dollar, EUR/USD, Hang Seng, and the SP500 are now $1, $98.39-108.37, $83.22-83.98, $1.20-1.22, 184, and 1, respectively.

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Too Big To Bail - Chart of the Day

 

Too Big To Bail - Virtual Portfolio


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%

Where's The Growth?

 

Hedgeye Risk Management CEO Keith McCullough went on CNBC’s The Kudlow Report to discuss how getting the dollar right affects many other aspects of the market. A stronger dollar equates to lower prices at the pump and that’s something almost every American can get behind.

 

There are three major issues going on that have evaporated confidence from our capital markets. Growth continues to slow, abysmal job creation and the debate over the fiscal cliff continue to drag on. Luckily, there’s hope in the US Dollar (affectionately known as #KingDollar on Twitter).

 

 


HedgeyeRetail Visual: UA's Got a Spine

Regardless of the print, expect to hear a lot about the launch of the 'Spine' lightweight runner. Early trends are positive. Here's some context on the product.

 

While apparel is still (unfortunately) the overwhelming driver for UA, you should expect Plank to allocate a good amount of the conference call's real estate to UA’s new “Spine” lightweight running shoe. Here's some context so you know what he's talking about. 

 

Consider the Following:

  • The “Spine” represents UA’s initial entrance into the lightweight running market. The new design is more of an entry level lightweight shoe weighing 9.7oz vs. Nike’s Free at 8.6oz and Saucony’s Kinvara at 7.7oz but remains UA’s lightest shoe to date.
  • Importantly, the launch of the “Spine” lays the foundation for the Spine technology (minimal material sole) which will be implemented into other UA FW designs including Football and Basketball.
  • HIBB noted on its 1Q12 call ahead of the launch that UA “hit the market well this time” referencing the Spine and indicated they would carry the shoe in more doors than past releases.
  • The “Spine” sells at an ~$100 ASP compared to the Charge RC at $120, the Micro G Split at $90, Micro G Stealth at $80 and Assert at $70.
  • UA currently has ~1% market share in the running category, down from ~1.2% in 2010- UA need’s to execute on its launches in order to reaccelerate share gains.
  • Taking into account the scope of the sample, UA’s “Spine” unit volume in its first 3-weeks in the market has been well above that of Micro G split/Stealth and Charge RC launches on both an absolute basis and as a percent of total units sold.
  • While week 3 volume is on par with the UA Assert which launched at the beginning of 2011, the “Spine” is sold at a $30 premium to the $70 Assert.

 

HedgeyeRetail Visual: UA's Got a Spine - UA COTD

 

HedgeyeRetail Visual: UA's Got a Spine - UA running share

 

UA "Spine"

HedgeyeRetail Visual: UA's Got a Spine - Spine

 

Legacy Launch

HedgeyeRetail Visual: UA's Got a Spine - legacy launch


SBUX: NERVOUS NELLY

We’re nervous about this quarter and the remainder of FY12.  The Street’s FY12 expectations imply a strong second half of the year.  We believe that reality is likely to be at odds with those expectations as same-store sales are slowing and the company is ramping up expenditure through investment in several new initiatives. 

 

Here are the key topics we will be focusing on heading into earnings on 7/26:

  • Guidance: Management is expected to provide its initial outlook for FY13 financial targets
  • Evolution Fresh: The Company previously stated that it intended to have Evolution Fresh beverages available across the Starbucks U.S. retail store system this summer.  We have seen several stores in the NY/NY/CT region without the beverage line and it is almost August!
  • Refreshers:  The new “refreshers” beverage offering has been on offer now for a couple of weeks. 
  • G&A: The Global Leadership Conference that the company is hosting in October is expected to cost $35-40mm.
  • La Boulange: Additional details on the acquisition are expected and we the company to quantify the dilutive impact of the acquisition to FY13 EPS.
  • Accelerating unit growth: The Company’s business is becoming more complex with five concepts in four different segments of the food and beverage industry. 
  • China: Given the recent macroeconomic commentary from list of consumer companies, Starbucks will likely address its performance in China during the second quarter.
  • Europe: MCD had nothing good to say about Europe.

 BULLISH SELL-SIDE

 

While 80% of the 31 analysts covering Starbucks rate the stock “Buy”, we are of the opinion that management is too optimistic. 

 SBUX: NERVOUS NELLY - sbux sell side sentiment

 

 Below, we discuss some of the forward-looking commentary recently offered by management:

 

HEADWINDS

 

“Now importantly with these headwinds I've spoken about with the fact that in this back half of the year commodity costs are still higher than they were relatively speaking a year ago, with the EMEA headwinds that I've have just spoken about, with the investments that we're making in things like La Boulange, food program overall, the continued integration of the Evolution Fresh business, which we acquired earlier this year, with all those headwinds we're accelerating earnings growth in Q3 and further in Q4.”

 

HEDGEYE – The Company has said that it expects company-operated comparable restaurant sales to grow at “mid-single digit pace”.  We believe that a 4-5% number would likely fall short of providing the leverage the company needs.  According to Consensus Metrix, the street is looking for 8%, -1%, and 18% growth for the Americas, EMEA, and CAP, respectively. We believe that, on all three counts, the Street is too aggressive.

  

EARNINGS OUTLOOK

 

“Now specifically to fiscal 2012, we are expecting earnings per share in the current year of $1.80 to $1.82, that represents about 18% to 20% earnings growth over the $1.52 that we earned a year ago and you can see the big hit that commodity cost take out of this first year right out of the gate, north of $200 million of commodity cost pressure in this fiscal year. Now, specific further to the second half of 2012, growth in earnings is expected to accelerate as we move into this third quarter. Accelerating from the first half of the year to 22% to 25% we expect in Q3 and 24% to 27% earnings growth expected in the fourth quarter. That reflects EPS of $0.44 likely we believe now in the third quarter with upside of that at $0.45. I'll come back to that in just a moment and in the fourth quarter our expected range is $0.46 to $0.47 EPS.”

 

HEDGEYE – We believe that there is a strong possibility of another guide down when the company reports on Thursday.

 

G&A OUTLOOK

 

“Our total business unit G&A as a percentage of total net revenue increased slightly over last Q2 due largely to growth in our Channel Development segment as we ramp up support of the high growth business.” 

 

HEDGEYE – We know they are building five different concepts and investing in the core food offering.  If the economic malaise persists or worsens, we would expect the company’s margins to deteriorate as a result.

 

EMEA

 

“It's clear that we'll have increased pressure from EMEA in this third quarter… we are living in a tough EMEA environment here for a while.”

 

"In March, our EMEA team launched what we're calling the Renaissance plan, our blueprint for turning around performance in that important region, which is modeled after the success of our transformation agenda in the U.S."

 

HEDGEYE – We remain skeptical on a turnaround in Europe absent a stabilization of the economic environment there.   The 2Q12 McDonald’s earnings call does not inspire much confidence that a rebound is forthcoming. 

 

CAP - China/Asia-Pacific

 

“Operating income in CAP was also strong, increasing 59% to $70 million in the second quarter. Operating margin grew 660 basis points to 39.8% despite higher commodity costs of approximately 140 basis points. This quarter's results were also impacted by the favorable timing of income for certain of our joint venture operations which we do not expect to occur in future. Our team is continuing to do an excellent job of following our growing revenue through to the bottom line, despite continued inflationary pressure in key Asian markets like China.”

 

HEDGEYE – The one-time items that benefitted results in 2QFY12 are less likely to repeat going forward.  Continuing economic sluggishness, as highlighted by McDonald’s, is likely to impede Starbucks’ progress in the region.

 

Conclusion

 

We believe that, over the near-term TRADE and intermediate-term TREND, the Street is too bullish on Starbucks.  There are pockets of hype that continue to buoy sentiment; K-Cups for example, will continue to generate attention but as a relatively insignificant portion of the company’s earnings, that business is unlikely to offset the other major headwinds the company faces heading into FY13.  One tailwind that the company expects in FY13 is coffee costs.  The operating income tailwind should be in the order of more than $100mm and an additional year of favorable coffee costs is expected in 2014.

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


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