• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

The resignation of CFO Chuck Sonsteby was surprising to me but it does not spell disaster for Brinker.

Last night, news of Sonsteby’s departure hit the tape.  While I expected him to stay at the company for a few more years, his leaving for Michaels Stores probably offers him some significant monetary upside – particularly if he gets cheap equity and leads the charge on an initial public offering of the private company.  Furthermore, the Bar & Grill industry is a difficult area in this current environment, and while the operational initiatives at Chili’s will generate rewards for the company, Michaels Stores may have provided a more appealing experience (with a possible big IPO payday).

While I am yet to speak with anyone at the company, I do not think this implies any major issues within Brinker.  If anything, it may shorten the odds of a take-out – something I did not think was likely prior to Sonsteby’s resignation.  I will follow up with further details shortly.

EAT: UNEXPECTED DEPARTURE - chuck share price

Howard Penney

Managing Director