Call Details:
- Toll Free Number:
- Direct Dial Number:
- Conference Code: 974734#
- Materials: CLICK HERE
Our short thesis focuses on the following:
- Disappointing new unit productivity
- Cash burn necessitates the current new unit growth rate
- Rampant support from the biased bulls (read: high expectations, aggressive estimates)
- Significant insider selling
- Strong sell-side sentiment and unjustified premium multiple
- Significant food inflation (dairy, beef, avocados, produce)
- Overly optimistic consensus food and labor cost assumptions in 2H14
- A lack of leverage in the business model considering higher year-over-year G&A, D&A and pre-opening spend
- Aggressive 2H14 and 2015 EPS estimates
- Approximately 30-40% downside to the name
Howard Penney
Managing Director
Fred Masotta
Analyst