Our macro team is removing REITs (VNQ) and the U.S. Dollar (UUP) from Investing Ideas today.
Hedgeye CEO Keith McCullough (the guy who called the global growth slowdown) hosted a special, must-see RTA Live on Friday updating his latest market thoughts and levels.
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Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.
Zoës Kitchen (ZOES) is on the Hedgeye Restaurants Best Ideas list as a LONG.
Yesterday after the close, ZOES reported impressive 2Q15 numbers. If the street wants to point to one blemish, due to the continued success of the business and stock price appreciation, ZOES had to roll forward a few public company expenses as they are no longer labeled an emerging growth company under the JOBS Act. This is part of entering the big leagues and is more a positive than a negative in our view.
ZOES reported revenue of $54.5mm a 30% increase YoY, narrowly beating consensus estimates of $54.0mm. Comparable restaurant sales increased 5.6% versus consensus estimates of 5.2%. The 5.6% was built up by a +1.3% increase in traffic, a +3.5% increase in product mix and +0.8% increase in price. ZOES had impressive performance all the way down the P&L leading to EPS of $0.05 beating consensus estimates by a penny.
ZOES opened seven new company-owned restaurants in the quarter, bringing the total company-owned restaurants to 148, with three franchised locations. Through August, they have opened seven additional restaurants bringing the total to 158.
Looking forward, management revised their guidance up slightly. Management is now projecting Restaurant sales between $220mm and $224mm up slightly from the previous $218mm to $223mm. Comparable restaurant sales growth is expected to be in the range of 5.0% to 6.0% bringing up the low end of previous guidance between 4.0% to 6.0%.
Listening to this management team talk makes us feel even more confident in the success of this company. They simply get it, the team environment cornered in everyone working toward the same goal together is culminating in great success. This story is nowhere near over and we expect to see continued strong performance from this company.
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Editor's Note: The following chart and brief excerpt are from this morning's Early Look written by Hedgeye CEO Keith McCullough. It makes a lot of sense to subscribe. Trust us.
...As I look at what I call the downside of the “probable range” in Global Equity markets this morning, for the first time in my career I don’t think I want to be right.
That’s a tough thing for me to write because the goal of the game is to be right. We’ve spent the last 7-8 years trying to evolve the Global Macro risk management #process to the point where many aren’t unprepared for this. Unfortunately, many are.
Rather than depress you with words, let me just show you the numbers my models showed me...
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