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If the whisper number is to be believed, casual dining sales trends showed strength in September.

The optimistic tone being struck by management teams (PFCB, DRI, MRT) in the casual dining category over the past few weeks resonates with the trend in casual dining sales that began during the summer and is continuing into the fall months.  The whisper numbers for the first three weeks of September, combined with our estimate, leads us to an estimate of 1.5% for the Knapp Track September same-store sales number.  This would constitute an acceleration of 90 bps on a one-year basis and a two-year average trend improvement of 10 bps.  Incidentally, a 1.5% print for September would be the strongest Knapp Track casual dining same-store sales number since August 2007 when a +1.7% result was reported.

Hedgeye’s macro view does not support the thesis that overall consumption will remain robust as we progress over the immediate and intermediate term; however, it is worth noting that the restaurant industry’s share-of-wallet seems to be holding up versus other “discretionary” categories.  I will be posting specifically on share-of-wallet trends within consumer discretionary soon.


Howard Penney

Managing Director