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RR Dashboard Capital Markets: Restaurant Stocks Had a Mediocre February

Investors were less than wowed with 4Q results for the restaurant chains that continue to trickle-in. However, it is our opinion that 4Q restaurant financial performance (which has mostly been reported at this point) has been pretty good, with all things considered. While industry sales certainly softened in January (mostly attributed to bad weather), a healthy 2024 sales outlook reflects that the consumer demo above $50k continues to show resiliency. While traffic remains negative (the primary concern), margins are recovering. Admittedly, the chains have work remaining to balance the provision of value needed to restore traffic & unit-level profits needed for operators to recover from the post-covid beating inflicted on the restaurant industry.

Capital Markets Dashboard March 2024

Wingstop 4Q23: U.S. Comps +21.2%, Restaurant Operating Margin Improved 1.3%

Wingstop’s impressive 4Q comp growth was especially notable because it was primarily driven by traffic during a time when the industry was suffering traffic losses. Management further noted that its sales benefit from competitive wing promotions which act to draw consumers into its own stores. Top-line growth is supported by an expanding marketing budget (the company’s 2023 ad expense increased +35% y/y) fueled by an AUV closing in on the $2MM mark, together with an abundance of unit development (1,400 restaurant commitments under development agreement at the end of 2023).

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What the U.S. Can Learn from Argentina? Everything!

Argentina’s newly elected President Javier Milei (a trained economist) was able to implement a plan to help his country avoid a certain destiny with hyperinflation & default by implementing a radical economic plan centered around: severe fiscal tightening; the removal of foreign exchange restrictions & the implementation of a “dollarization”; and the privatization of state-owned enterprises. After 1 month in office, Argentina was able to generate a $589MM government surplus!

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Review Of Billionaire Hedge Fund Manager Ray Dalio’s Book On the Debt Cycles of Empires

In this post, we review Ray Dalio’s 2021 book “Principles for Dealing with The Changing World Order – Why Nations Succeed and Fail”. The bad news is that Ray is not bullish on the prospects for the United States based upon his multivariate analysis. In his estimation, the U.S. empire and its global reserve currency is getting ready to go the way of the previous British empire and the countless empires before that. The good news is that China is standing ready to fill the vacuum…  

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NoBull 4Q23 Consumer Economic Dashboard

While the consumer continues to hang in according to the recently released 4Q23 NoBull Consumer Economic Dashboard, persistently high interest rates are a mounting problem.

Consumer Economic Index

Panera 2024

Panera is the 2nd largest fast casual player that is well known for its healthful “food that tastes good & is good for you” positioning, augmented by a “3rd place” oasis atmosphere (beyond home & workplace). While Panera is well positioned for the long-term with a healthy halo and digital strength, intermediate-term results may be tempered by the need for more value in a difficult economy and the need for a higher level of labor efficiency to support store-level profitability.

Panera Building Image

Church’s Texas Chicken 2024

Church’s Texas Chicken is a 70-year-old brand that enjoys strong brand equity built around its hallmark hand-breaded, fried chicken made in small batches throughout the day and scratch-made Honey-Butter Biscuits. Church’s new management team is executing around a well-conceived strategic plan that shows signs of driving a rebound – that is, so long as the economy cooperates.

Churchs Building

Wendy’s 4Q23: U.S. Comps +0.9%, U.S. Company Store Margin -1.6%

Wendy’s reported that while the consumer is under pressure (resulting in a soft 4Q23 for the industry), prospects are looking up. The brand’s barbell menu strategy is working well to address the traffic decline for low-income consumers (under $75k) with its Biggie Bag value platform while ensuring higher-income consumers are well served with premium Made to Crave offerings.

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The Correlation Between U.S. Money Printing & Wealth Creation

Are the super-rich creating wealth or are they simply riding the wave of money creation? The following chart reveals an incredibly tight correlation between money supply and the net worth held by the top 0.1% richest…  

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A Primer on Banking, Past to Present

From its start with the European financial families, banking has been around for a long time. Sometimes it’s good to review the origin of a thing to better understand where we are today…

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