Takeaway: Editor’s Note: We added Annie’s (BNNY) and Restoration Hardware (RH) to our list of Investing Ideas, and we removed Melco Crown Ent, (MPEL).



BNNY: Consumer Staples analyst Matthew Hedrick is bullish on Annie’s (BNNY), a producer and distributor of organic foods and snacks. We added Annie’s to the Investing Ideas list this week. Please click here to view that Stock Report.



FDX: FedEx took delivery of its first 767 Freighter, an aircraft that is a key component of the firm’s fleet renewal strategy, writes Industrials sector head Jay Van Sciver.  One reason why FedEx Express’ margins lag those of competitors has been its operation of a high cost aircraft fleet.  The 767-300Fs offer up to a 30% cost improvement versus older MD-10 aircraft.  FedEx has already been converting 757s to replace less efficient A310s, which offer up to 20% improvement.   FedEx expects a $300 million annual profit improvement by  fiscal year 2016 from modernizing its air fleet.



HCA: Hospital employment continues to decelerate with yesterday’s labor report.  On the margin, this is a negative update, but a minor one.  We’ve begun tracking monthly data on Medicare Part A payments, or those for Hospital care. 

We’ve seen some steep deceleration in Medicare Part A payments, which has shown up in company results across all the publicly traded hospitals, although HCA has done much better than others.  We’ll get the next update to this important series next week. 


We did some additional work to understand Medicare trends, adding a prescription tracking tool that should show us the shorter term trends as they occur.  As we mentioned previously we’ve been running a monthly survey of OB/GYN offices which has been showing doctors are seeing some better results in patient volume and maternity. We could be finally seeing the recovery Medical Economy that has been frustrating healthcare investors for over five years.



HOLX: Thursday, the Health Care sector team lead by sector head Tom Tobin updated market data for mammography industry growth.  In terms of the total number of facilities and mammography boxes in the field, both continue to show acceleration.  Our proprietary Tomo-Tracker also showed solid growth for August.  We’re expecting Medicare to issue a reimbursement code for 3D Tomo this Fall, clearing the path for a big surge in demand. 


Additionally, Obamacare gets going at the start of next month.  We believe HOLX is one of the best positioned players to take advantage of newly insured heading to the doctor’s office. 



MD: Employment trends for women aged 20 to34 continues to improve on the employment report released yesterday.   As employment recovers in this age group we expect to see improving maternity trends and improving revenue growth for MD.  We noticed the US Census updated 2012 birth data earlier this week showing a flat 2012, the first year without a decline since 2008.  We think there are one million or more mothers who deferred having a child the last few years and a turn would be a big deal for MD.



NKE: The latest Nike US Footwear retail sales data leaves us less than inspired. Specifically, it shows that footwear sales are growing, but are in a clear downward trend. Two factors keep us optimistic:

  1. Even though the intermediate-term trend is easing, the latest week was up 9%, which is a number we’d consider to be respectful by any means.
  2. US footwear is only 25% of Nike’s total sales – there’s a LOT more to the story.  The punchline here is that we’re going to raise a yellow flag to see how the next two to three weeks weeks perform. They’ll be critical with Nike reporting earnings in late September.


NSM: Nationstar Mortgage hit a new high this week, rising to a closing price of $52.44 on Thursday. Our value estimate for the stock remains in the $67 to $70 range, implying approximately 30% further upside from that level.


We continue to expect that the company will announce further servicing acquisitions between now and year-end and into the first half of 2014. Historically, these acquisitions have been catalysts to push shares higher. For reference, the big three specialty servicers (NSM, OCN, WAC) all raised their acquisition pipeline estimates during their most recent second quarter 2013 results (by a combined $145 billion). Interestingly, NSM accounted for 70% of the increase.


The main risk to keep tabs on with Nationstar is interest rates rising. The reality is that rates continue to rise on the back of strengthening US economic data and a growing expectation that the Fed will begin tapering asset purchases sooner than previously expected.


Rising rates are inversely correlated with mortgage origination volumes, as refinancing activity drops rapidly in response to higher rates. Nationstar derives a significant portion of its earnings from mortgage origination, but is more defensive than a traditional mortgage bank as their originations are largely sourced through the HARP channel, which is less rate-sensitive than the traditional refinancing channel. Nevertheless, origination volumes are likely to come under pressure amid further increases in rates and this will weigh on earnings upside going forward.

  • TRADE: In the short-term, the two main drivers of NSM shares will be interest rates and deal announcements.
  • TREND: Over the intermediate term, the stock will key off 3Q13 earnings results and deal announcements.
  • TAIL: In the long-term, there is still a tremendous opportunity for non-bank servicers like Nationstar to roll-up the servicing business. NSM is well positioned to be a prime beneficiary. We continue to think consensus earnings estimates remain too low for 2013/2014.


RH: We added Restoration Hardware (RH) to our Investing Ideas list this week. Click here to see the full Stock Report on the company.



SBUX: Hedgeye Restaurants sector head Howard Penney has no update on Starbucks (SBUX) this week.



TROW: Hedgeye Financials director Jonathan Casteleyn has no update on T. Rowe Price (TROW) this week.



WWW: The catalyst calendar is lining up for Wolverine World Wide (WWW). In the upcoming quarter, we’re modeling $1.20 earnings per share, which compares to the Street estimates of $1.02. That’s something that we’re known for several months now, as the Street is far underestimating the accretion of its recently-acquired PLG brands (Sperry, Keds, Stride Rite, Saucony).


But now the company bolstered the catalyst calendar by adding an analyst meeting on Oct 15, which is within a week of reporting earnings. A powerful catalyst calendar, indeed.


INVESTING IDEAS NEWSLETTER - Screen Shot 2013 09 07 at 7.22.05 AM



(Editor’s Note: Below is a column from Hedgeye CEO Keith McCullough that ran in Forbes this week. We believe the column is prescient, and that’s why we wanted to include it in today’s newsletter.)

“The physicists have known sin; and this is a knowledge which they cannot lose.”

-Robert Oppenheimer



Do you have introspective accountability?


Six decades or so ago, shortly after he began to fully grasp the unspeakably fearsome reality of the nuclear weapons he helped unleash, Robert Oppenheimer—“The Father of the Atomic Bomb”—became a rather unpopular man with the U.S. government.


After provoking the ire of politicians with his outspoken opinions during the Second Red Scare, Oppenheimer’s security clearance was revoked in a much-publicized hearing in 1954, and he was effectively stripped of his direct political influence.


Oppenheimer once remarked that his creation brought to mind words from the Bhagavad Gita: "Now I am become Death, the destroyer of worlds." In essence, Oppenheimer ultimately held both himself and the government to account.


Now stop for a moment and ask yourself: Can you imagine a central planner of the Bernanke epoch holding themselves accountable for the highest levels of food, energy, education, etc. inflation in world history?


Most likely, the answer is no. That would require an incredibly uncomfortable un-spinning of the truth.


And the truth is that American “political scientists” who systematically engaged in devaluing the purchasing power of the American people to four-decade year lows in 2011 know that sin. It is market knowledge that history will not soon forget. Facts don’t lie, politicians do.


If you’ve ever sat across the table from me and my macro research team during the monetary mayhem and tumult of these last few years, you’ll know that I refuse to have a debate about mean reversion risks without contextualizing the post-Nixon low in the world’s reserve currency (see chart):


  1. Got Causality? Of course, when a country cuts rates to zero then whispers to everyone front-running their next move that zero really isn’t zero (for Bernanke 0 = 0 minus 1, 2, 3, 4? QE5?), its currency goes down, hard.


  1. Post Nixon (i.e. post his devaluing the Dollar by abandoning the Gold Standard in 1971, purely for political gain), the US Dollar Index has never seen a lower-low versus the 2011 low. Surprise, surprise. That’s also when gold hit its all-time high.


Since most global commodities settle in Dollars, why there’s been raging inverse correlation (Dollar Down = Commodities InflationUp) alongside causality in this relationship is trivial to everyone other than the people who should be held responsible for it.


What is less trivial is all of the unintended consequences associated with the ultimate central planning sin (an un-elected overlord confiscating the purchasing power of The People). Here are some of the big ones:


  1. Commodity Bubble
  2. Bond Bubble
  3. Emerging Market Bubble


Yep, that’s going to be a lot for Bernanke’s children (and theirs) to noodle over for the next century. That is, of course, unless the next guy or gal running the un-elected agency does what no modern Federal Reserve Chairman has ever not done – raise rates.


For the last year or so, I’ve spent a considerable amount of time ranting about these Global Macro Themes:


  1. Commodity Deflation
  2. Rising Interest Rates
  3. Emerging Market Outflows


These are relatively easy long-term risk calls to make because all three of them are basically about unwinding all three of the aforementioned bubbles.


Once prices stop making all-time highs (commodities, bonds, or currencies), there’s this big little risk management critter Ben Bernanke has never mentioned under oath called asymmetry.


So, at this stage of the cycle this is what you get:


  1. US Dollar making a series of intermediate-term TREND higher-lows (off her all-time lows in 2011)
  2. US Interest Rates making a series of intermediate-term TREND higher-lows (off their all-time lows in 2012)
  3. Gold and food prices making a series of intermediate-term TREND lower-highs (off their all-time highs of 2011-2012)


All the while, what we still get from the consensus TV circus that is “Government Access Media” is a bunch of uninformed people begging for more of the drugs that the political scientists got rich selling us.


If I am not clear on my long-term policy view, let me state it plainly – stop devaluing the Dollar. Stop trying to smooth economic gravity. Stop the monetary madness. Start tapering. Now.


If you ever want to see US growth expectations come back (yes, markets and business run on expectations, fyi), you have to let the US Dollar come back and let rates rise right alongside her.


Just this morning, we received additional support that the economy doesn’t need any more of the Fed’s monetary amphetamines. In case you missed it, the US jobless claims trend is near a six-year low. Meanwhile, Q2 US economic growth was revised up to a 2.5% annualized rate.


What will it take to get the Fed out of the way once and for all?


We are at a critical crossroads in America right now. Unwinding the monetary sin embedded in Bernanke’s post 2012 Jackson Hole policy is what markets have been doing for 10 months.


Collectively, we either have the responsibility within all of us to rise up against the tyranny of easy money and currency debauchery, or we do not. At this point, I can only hope the people who voted for this government hold it to account.


Robert Oppenheimer eventually got it. He had introspective accountability. The $3,600,000,000,000 question is whether Ben Bernanke ever will.

The Week Ahead

The Economic Data calendar for the week of the 9th of September through the 13th is full of critical releases and events.  Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.


The Week Ahead - weekahead

The Draghi Shift: Door Open for An Interest Rate Cut

Bullish: Germany (EWG) and UK (EWU) equities


Draghi pivoted substantially in the ECB’s tone on monetary policy expectations in his press conference yesterday in which he kept rates on hold, presenting a dovish tone in which he said that interest rates should remain “at present OR lower levels for an extended period of time.”  In his commentary, he referred to the green shoots of economy (terminology he has not used this year) as “very, very green” and that there’s still no indication of domestic demand recovery across the whole of the Eurozone.


In short, Draghi has reset market expectations that were suggesting a hike in rates over the intermediate term, rather than a cut. Our assessments is that Draghi will continue to watch the data roll in and will need a number of months to confirm or change his outlook that could influence his monetary policy stance.  


Two pressing areas of concern remain the repayment schedule of LTROs and lack of credit across the region. While the swift repayment of the LTROs has boosted the health of the ECB’s balance sheet, it represents a tightening of liquidity, some of which is reflected in the poor data observed from ECB loans to corporations and households (chart directly below). The larger credit clog across the region should continue to suppress economic expansion and we believe that in the coming months Draghi may issue a facility to better extend loans to small and medium sized enterprises, the lifeblood of the Eurozone economy.  [Draghi’s full prepared remarks can be found here.]


The Draghi Shift: Door Open for An Interest Rate Cut - zz. rates


The Draghi Shift: Door Open for An Interest Rate Cut - zz. ECB balance sheet


The Draghi Shift: Door Open for An Interest Rate Cut - ZZ. LOANS



UK and Germany Bulls on Gradual Eurozone Improvement

As we’ve noted in previous notes, Eurozone data has improved over recent months, however we’ve tempered expectations that given the still very weak underlying structural state of the Eurozone, in particular the periphery, the data suggests an improvement off the bottom but still at low levels.  We see this clearly with PMI results, which we’ve forecast to make mild improvement and hover around the 50 level (dividing contraction and expansion), and outperformance from Germany and the UK given their stronger underlying fundamentals (see the chart below).


The Draghi Shift: Door Open for An Interest Rate Cut - ZZ. PMIS


We continue to be bullish on German and UK equities. Along with our U.S. call of #RatesRising, we’ve seen a similar trend in many European credit markets, which has solidified our call to stay in equities.  Of note, German’s 10yr bund yield reached a high of 2.04% this week (that level was last seen in DEC 2011!) and are up 26bp M/M, while UK 10yr Gilts are up 45bps M/M and France’s 10yr yield is up 30bps M/M.  While we expect yields to contract as follow-through to yesterday’s announcement, we do expect rates to remain elevated over the intermediate term as investor push into equities.



Given Draghi’s shift to a dovish interest rate outlook, we wouldn’t be surprised to see more follow-through selling in the EUR/USD, however we still very much think that Draghi’s OMT firepower has put great support in the common currency and expect the cross to trade in a tight range of $1.29 – $1.33 over the intermediate term.


Below we show CFTC data on the EUR/USD net non-commercial positions outstanding.  Regrettably the data is a bit stale (the newest as of 8/27), however the level suggests migration to the neutral level, consistent with an increasingly bullish outlook on the region’s improvement.


The Draghi Shift: Door Open for An Interest Rate Cut - zz.eur


The Draghi Shift: Door Open for An Interest Rate Cut - zz. cftc



An Italian Political Mess on Monday?

As a quick warning as you head into the weekend, we want to make you aware of what may develop on the Italian political front on Monday and the impact it could have on the market. Reuters has suggested that former PM Berlusconi has prepared a video message that could announce a decision (along with his PdL party) to bring down PM Letta’s coalition government (which has been in a tenuous state at best since elections in February) if on Monday the special Senate committee votes to strip Berlusconi of his seat in the chamber.


It’s hard to say just what may be decided on Monday, but certainly the situation creates potentially more downside than upside across Italian capital markets.  It’s such political risk that has largely kept us away from taking an investment position in Italy for many months. We’ll sleep deeply this weekend without a position in Italy.  We hope you can too.


The Draghi Shift: Door Open for An Interest Rate Cut - zz. silvio


Enjoy your weekend!


Matthew Hedrick

Senior Analyst

real-time alerts

real edge in real-time

This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

Stock Report: Annie's, Inc (BNNY)

Stock Report: Annie's, Inc (BNNY) - HE II BNNY table 9 6 13


Despite slightly disappointing top and bottom line Q1 2014 results (released on 8/8/13), the company maintained its FY revenue outlook of +18-20% and EPS range of $0.97 to $1.01. We believe that BNNY’s premium valuation is justified by higher growth rates across organic offerings, of which Annie’s is a leader, especially as it increasingly moves its products to the mainstream aisle from the organic aisle.


BNNY caters to a higher income demographic, one we think will continue to pay a premium for organic foods despite fluctuations in macroeconomic conditions. 


INTERMEDIATE TERM (TREND) (the next 3 months or more)

Q2 may see another quarter of challenged gross margins (expected to fall -100 to 150bps), however we expect a rebound in the top line (Q1 is typically the weakest revenue quarter) as advertising spend increases, and it further rolls out its frozen pizza and family sized frozen meal offerings, and continues to take share across mac & cheese, crackers and fruit snacks from more traditional branded players.


LONG-TERM (TAIL) (the next 3 years or less)

We believe that BNNY’s strategy to innovate everyday foods and create healthier and better tasting options than its competitors is one that should sustain long-term growth versus traditional CPG innovation that focuses on new and “different” SKUs that may miss consumer trends.


Organic product offerings will become more competitive in the coming years, however we believe that Annie’s can maintain its market leadership and take share from more traditional brand players as it moves more of its items to the center of the store. 


Stock Report: Annie's, Inc (BNNY) - HE II BNNY chart 9 6 13

Stock Report: Restoration Hardware (RH)

Stock Report: Restoration Hardware (RH) - HE II RH boxes 9 6 13


We think that RH is to home furnishings what Ralph Lauren is to Apparel and what Nike is to Athletic Shoes. It's the preeminent brand in the space, and sets/leads consumer style trends/wants/needs but with very little fashion risk. From a maturity perspective, we think that RH is 5-10 years behind RL, and 10-15 years behind NKE. Its got the runway. And even though it has such minimal market share across its categories, the competitive set is actually not very strong, and it is creating high competitive barriers.


INTERMEDIATE TERM (TREND) (the next 3 months or more)

There are some intermediate-term trends worth noting.

  1. RH announced last quarter that it is launching two new businesses -- again.  Does this sound familiar? In RH's first quarter out of the IPO gate it announced the launch of RH Tableware, RH Objects of Curiosity, and RH Fine Art. Now we've got RH Kitchen and Tableware and RH Antiquities. Both of these are massively fragmented businesses and present huge opportunities for RH. These are in addition to RH Leather and RH Rugs, two new catalogue drops this fall. #growthaccellerating
  2. RH managed to snag Richard Harvey from Williams-Sonoma to be CMO for RH Kitchens and Tableware. The simple fact that RH's share of this category is close to zero today, and they went ahead and hired the person with the best track record in the world in brand-building, sourcing and merchandising in the kitchen space….that's just huge.
  3. RH is fresh off the ICSC conference in Vegas and it proved to be a game-changer for the company. They not only had far better success in finding landlords/properties to fit their new Design Galleries. But they found that there are more opportunities for larger properties (as large at 50k square feet) at far lower prices than their business model originally called for. Not only does it take up the number of Galleries we're likely to see over time (over 50), but we think it also takes up the average size per store. These two factors are a critical on a combined basis as it relates to our margin of safety on the RH growth algorithm (see below). With more favorable availability of sites comes more favorable rents and cap rates -- it's economics 101.

LONG-TERM (TAIL) (the next 3 years or less)

One thing that makes the RH model stand out is the growth algorithm over the next 5-years. Specifically…

  1. Square footage has not grown for five years. But RH should finally start to report square footage growth starting in 3Q13 – at which point it should start to climb aggressively.
  2. But our point is that today it is the comp that's driving the model. We can clearly see where that's coming from.  We can map out additional sales as new businesses come on line, and we can draw out the comp curves for new higher productivity entering the comp base and hitting more mature productivity levels. We're modeling sales per square foot going from $846 last year to just shy of $1,500 in year 5.
  3. Ultimately, comps will slow. It's a mathematical certainty. But at the time comps slow we're likely to see square footage growth accelerating to peak rates of growth. Square footage is shrinking slightly today, and should be up at a rate near 20% by year 3.
  4. So you see…we can safely model the comp today due to reasons discussed above. Then as that starts to level off, we have square footage ramping up. We can safely model that too. As the second chart shows, that gets us to just over 20% annual revenue growth with comp and square footage flip-flopping their importance to the model as time passes.


Stock Report: Restoration Hardware (RH) - HE II RH chart 9 6 13

BNNY - Bullish on Annie’s

There’s lots to like about Annie’s, even with a rich valuation. Highlights include:

  • Q1 results were disappointing, but typically Q1 is its weakest quarter of the year; management reaffirmed its FY revenue growth guidance of 18-20% and adjusted diluted EPS range of $0.97 to $1.01
  • We believe that BNNY’s premium valuation is justified by higher growth rates across organic offerings, of which Annie’s is a leader, especially as it increasingly moves its products to the mainstream aisle from the organic aisle
  • BNNY is in a bullish breakout, with the stock price trading above our immediate term TRADE and intermediate term TREND levels (see chart directly below)
  • The company remains ahead of health and wellness trends in its product offerings
  • BNNY’s innovation is focused on taking everyday foods that people like to eat (ex. mac & cheese and cheddar snacks) and making healthier and better tasting products than its competitors; we think this strategy should be advantageous and sustain long-term growth versus traditional CPG innovation focused on new and “different” SKUs that may miss consumer interest
  • The company caters to a higher income client who can afford or trade up to the premium pricing of organic, despite swings in the macroeconomic landscape
  • It is poised to take a greater share across mac & cheese, crackers and fruit snacks; the introduction of frozen pizza early in the year and last month’s release of four new frozen meals offer excitement to the category. It is yet to be seen if BNNY can buck the trend of low profitability in the frozen section

BNNY - Bullish on Annie’s  - zz. bnny



Performance Outlook

Annie’s reported Q1 pro forma EPS of $0.13 on (8/8), one cent below Bloomberg consensus and revenues underperformed expectations (13.8% versus consensus 17.1%). Despite the softness in the top-line, management reiterated its FY guidance and we expect with its increased advertising spend slated for 2H (especially on pizza), a rebound in top-line in the coming quarters.  Note too that Q1 is typically its lowest revenue quarter of the year.


We continue to state that despite the lofty valuation of Annie’s (P/E of 37.4x vs food peer group average of 18.0x), organic food companies are deserving of a premium over the group due to their outperforming growth profile. BNNY enjoyed revenue growth greater than 20% over the last three years and has grown revenues at an average rate of 17.5% over the last 5 years. These figures are simply not anywhere near the much lower rates of growth for its peers in the food category,  most of whom have recorded average revenue growth south of 10% over the past five years. 


For a company that is virtually debt free, investing in cap-ex to grow the business, and increasing its work force, while maintaining a leading position in organic foods as it expands to the mainstream aisle to meet consumer demand for organic, we think BNNY rightly deserves to trade at a premium multiple.


For reference, below we show how BNNY stacks up against its competitors in the food category. Admittedly we are comparing BNNY, a small cap, to large cap non-organic companies, yet this snapshot serves as a reference point.


While gross margins slipped -190 bps to 37.8% in Q1, and we expect Q2 to be down slightly less (~100-150bps) versus the year ago comp of 38.3%, we expect a slow rebound towards 40% in the back half of the year.


BNNY - Bullish on Annie’s  - zz. comp sheet



On the Annie’s Brand

What’s not to love about a company that has been able to get ahead of the biggest consumer trend of customers better understanding what they’re eating and how what they eat may affect their overall health? 


Health and wellness is the industry’s buzzword and has been the focus of all consumer companies over the last 3-4 years. While some portfolios have been challenged to meet this trend (think: PEP, KO, CEE), BNNY is now enjoying the movement of its products from the natural and organic aisle to the mainstream (center of the store) aisle and the opportunity to take share from traditional branded players, especially those without organic offerings.


With 47% of its sales from Meals, 39% from Snacks, and 14% from Dressing, Contaminants, and Other, Annie’s sales growth has come from its strategy to take everyday products that consumers love to eat and improve the taste while using all natural and organic ingredients.  We see this as a huge competitive advantage as its innovation is focused on improving what the consumer already likes, rather than innovation for the sake of creating something “new” that may fail with the customer. We think this innovation should equate to increased household penetration.


And the movement of its products to the mainstream aisle (Mac & Cheese was first to do so in 2011) has not only met consumer demand for organic but also benefitted retailers (offering in most cases a higher margin structure). Annie’s now enjoys number one share position in national organic products in mac & cheese, snack crackers, gram crackers and fruit snacks.


Annie’s has over 135 products in 26,500 stores in the U.S., with initial inroads into Canada, across all major retailers (mass and grocery) and natural and organic stores. Given its nationwide distribution, its focus is on adding SKUs to existing channels and driving products to the mainstream aisle.


We like Annie’s ability to maintain and grow its market share as it caters to a higher income customer (typically better educated and more health conscious) that has the discretionary dollars to pay up for the price premium of organic.  Broader U.S. economic trends, with the unemployment rate at 7.6% and record highs in food stamps, suggest that lower income earners remain very price constrained since the economic downturn. Therefore, BNNY is in less competition with its branded rivals that cater to a lower income demographic. (Note: Annie’s products are sold on average at a 25-30% premium to more traditional brands across categories).



New Product Inroads

In January 2013 Annie’s launched frozen pizza in Whole Foods. In the same month it issued a voluntary recall of its frozen pizza after small metal fragments were identified in the pizza dough from a third-party flour mill it sourced.  Despite the challenges of its launch, frozen pizza is making strides (with build-out in Target and natural retails in particular), and a strong repeat rate of 70% according to the company. The one great challenge for BNNY will remain the value perception within the frozen pizza case, but the company is optimistic that television advertising slated for 2H 2013 will help to drive sales.


The company also just launched four varieties of family sized frozen meals, intended for parents who  need a quick dinner option, but still want a “healthy” meal. We acknowledge that BNNY may be competing for a different (higher income) consumer with its frozen meal offerings versus traditional frozen offerings, but we are well aware of how challenged frozen has been for the industry. We’ll have to wait and see how performance plays out.


Finally, the company is reporting strong results in snacks, in particular Cheddar Squares, launched two months ago, that target an older aged customer (versus the success of Cheddar Bunnies for kids).



Matthew Hedrick

Senior Analyst

the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.