06/02/14 11:14 AM EDT

Monday Mashup: PLKI, BNNY and More

INVESTMENT IDEAS

The table below lists our current Investment Ideas as well as our Watch List – a list of potential ideas that we are in the process of evaluating. We intend to update this table regularly and will provide detail on any material changes.

Recent Notes

05/27/14 Post-Memorial Day Mashup

05/27/14 BOBE: M&A Activity Heating Up In The Food Business

05/27/14 DRI: Fighting The Good Fight

05/28/14 MCD: All The Hype For This?

05/29/14 PLKI: Delivering The Goods

05/30/14 BNNY: Still A Short, But On A Leash

Events This Week

06/02/14 KKD Earnings Call 4:30pm EST

06/03/14 BJRI Annual General Meeting

06/05/14 PNRA Annual General Meeting 8:30am EST

06/05/14 ZOES Earnings Call 5:00pm EST

Chart of the Day

Popeye’s Louisiana Kitchen (PLKI) increased its market share in the domestic chicken-QSR segment to 22.3% from 20.2% a year ago. We believe an industry wide increase in promotional focus featuring chicken products benefited the chain by bringing attention to its superior product. PLKI’s success moving forward will depend largely on its ability to continue driving top line sales which we believe they will achieve through a combination of new units, remodels and resonant promotional efforts.

Recent News Flow

Monday, May 26^th

PLKI announced the return of its most successful LTO, Chicken Waffle Tenders, which will be served with fries and a biscuit for $4.99. The offer will be available at participating locations until June 29^th.

Tuesday, May 27^th

NDLS announced an agreement to acquire 16 franchised Noodles & Company restaurants from Sagamore Dining Partners, LLC, for $13.4 million. The 16 restaurants are located primarily in the Indianapolis region. Sagamore now plans to develop new restaurants in the greater Louisville, KY area.
MCD announced its 3-year total cash return target. With this, management revealed several new initiatives they will undertake to enhance shareholder value including optimizing the capital structure, optimizing the ownership structure and scrutinizing G&A. The company also expects to return $18 to $20 billion to shareholders between 2014 and 2016 through a combination of dividends and share repurchases.
PZZA Papa John’s introduced a Mediterranean-style, New Greek Pizza.
CBRL WSJ’s Ahead of the Tape column wrote positively about Cracker Barrel, citing the company’s success in fending off activist Biglari and achievable guidance.

Wednesday, May 28^th

BAGL announced a new line-up of seasonal menu items for the summer, including “new gourmet Panini sandwiches, better deli favorite sandwiches and refreshingly sweet Strawberry Drinks.”
BAGL announced the resignation of COO Emanuel Hilario. The Board will not fill the vacancy until it has named a new President and CEO.

Thursday, May 29^th

DIN announced its Board declared a second quarter cash dividend of $0.75 per share, payable on June 27, 2014 to shareholders of record on June 18, 2014.
EAT announced its Board declared a quarterly dividend of $0.24 per share, payable on June 26, 2014 to shareholders of record on June 13, 2014.

Friday, May 30^th

WEN shareholders elected each of the ten nominees at its Annual Meeting on May 28^th and rejected a stockholder proposal regarding an independent Board chairman.
SBUX senior unsecured debt rating was upgraded by Moody’s to A3 and its short-term commercial paper rating was reaffirmed at P-2.

US Macro Consumption

The XLY (+1.7%) slightly outperformed the SPX (+1.6%) last week, but both casual dining and quick service stocks underperformed the broader XLY index.