Casual Dining Trends Not Spooking Stocks

Takeaway: The latest Knapp Track data showed same-restaurant sales and traffic numbers were their worst since July and September 2009, respectively.

This note was originally published March 19, 2013 at 09:31 in Restaurants

Knapp released his casual dining same-restaurant sales estimate for February and the results confirmed the trend implied by the sequentially-worse Black Box data we saw earlier in the month.  The Knapp Track same-restaurant sales and traffic numbers were the worst since September '09 and July '09, respectively.

 

Knapp Sequential Moves

 

February estimated Knapp Track same-restaurant sales growth came in at -5.4%.  If the accounting period number is unchanged from the estimate, that will imply a sequential change in the two-year average trend of -240 bps.  This would be the most significant sequential slowdown in the two-year average trend since December 2009.  It is important to note, however, that Knapp believes that snowstorms caused a drop of 1-1.5% in same-restaurant sales in February.

 

February estimated Knapp Track same-restaurant traffic growth came in at -6.3%.  If the accounting period number is unchanged from the estimate, that will imply a sequential change in the two-year average trend of -250 bases points.  This would be the most significant sequential slowdown in the two-year average trend since December 2009. 

 

 

Stock Prices Couldn’t Care Less

 

Perhaps in anticipation of sunnier times ahead, investors seem to be buying a casual dining recovery that is yet to materialize.  We continue to like Darden and Brinker, for very different reasons, but believe that many casual dining names are up on a rope at this point.  BWLD is one name we would avoid on the long side despite some recent strength that was prompted by decreasing wing prices.

 

Casual Dining Trends Not Spooking Stocks - KNAPP VS CAS INDEX

 

 


Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more