Takeaway: We reiterate our Best Idea shorts: BLMN, PNRA, PBPB, MCD.

No real surprises here.  Industry data points are continuing to confirm our bearish stance on casual dining.

Last night, Malcolm Knapp released his Knapp Track sales results for December, estimating that same-restaurant sales and guest counts declined -3.8% and -5.2%, respectively, versus December 2012.

On a two-year average basis, the results imply a sequential change of -235 bps and -360 bps for same-restaurant sales and guest counts, respectively.

Knapp noted that only one of four weeks in December had positive comparable sales, while all four weeks had negative comparable guest counts.  Poor weather conditions negatively impacted the month, particularly in the first week which was also the worst week of the month.

According to prior accounting period data and these December estimates, we estimate that comparable restaurant sales and comparable guest counts declined -0.7% and -2.5%, respectively, during the fourth quarter. 

We will release more data when Black Box Intelligence reports, including what companies have seen their same-restaurant sales estimates revised over the course of December.

Howard Penney

Managing Director