QSR - Big 3 Market Share Shifts

We learned today that Wendy’s company-operated July same-store sales improved sequentially to up 2.0% (up 3.4%, excluding the impact of 300 fewer restaurants serving breakfast compared to a year ago) from -1.2% in 2Q09 (up 0.6%, excluding the breakfast impact).  From the chart below, you can see that Wendy’s had been underperforming both MCD and BKC in the U.S. since about 2Q07.

 In the most recent quarters , Wendy’s has started to gain share from BKC as Wendy’s increased its value messaging at the same time BKC focused more heavily on its premium priced menu items.  MCD is scheduled to report its July comparable sales growth on Monday, but has said that it expects its U.S. segment to post a number that is similar to or better than June’s 1.8% result (see my post titled MCD – July Sales Preview for more details).  Assuming MCD reports about 2% same-store sales in the U.S., July will mark the first month since 1Q07 that Wendy’s matched MCD’s comparable sales growth level.  And, excluding the YOY breakfast impact, Wendy’s may have actually stolen market share from MCD in July.  

BKC does not report fiscal 4Q09 (calendar 2Q09) until August 25, but the chart below reflects my belief that BCK’s same-store sales growth continued to decline on a sequential basis in the quarter and in July.  BKC acknowledged that its focus on premium products has failed to drive traffic and has more recently increased its advertising around more value items, such as the $1 Whopper Junior.  TAST reported 2Q09 results earlier this week and its Burger King same-store sales growth (TAST is a franchisee of 314 U.S. Burger King restaurants) fell off a cliff during the quarter on a sequential basis, -4.7% versus +5.1% in 1Q09.  These less than favorable trends continued in July with comparable sales down about 5%.  Directionally, these TAST results do not bode well for BKC. 


QSR - Big 3 Market Share Shifts - big3

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more