Consumer Discretionary
John Zolidis updates his best Long and Short ideas in Retail and Restaurants to start Q2. This follows a successful first quarter, where his average Short fell 11%, while his average Long was flat. Both compared favourably to his universe, which was down 6%, on average. The key change this quarter sees John turn bearish on TXRH as the business decelerates, margins inflect negatively and consensus forecasts appear too high. Compounding matters, the shares also trade at a premium to historical levels. Additional Short ideas include Cava, Dollarama and Tractor Supply, while on the Long side, he continues to be bullish on names such as Ollie's Bargain Outlet, Sprouts Farmers Market and Walmart.
Edition: 209
- 18 April, 2025
Consumer Discretionary
Gordon Haskett Research Advisors
TXRH is due to report Q2 earnings on July 27th and Jeff Farmer is looking for SSS / EPS upside - he models Q2 EPS of $1.24 with SSS +9% which reflects 1) the already reported +8.6% Apr SSS, 2) HSD% average SSS in May and Jun with GHRA’s traffic data showing that Y/Y average traffic growth was similar to Apr and 3) 5.6% menu pricing, down from the 5.9% menu pricing in Q1. He forecasts +6.6% Q3 SSS and EPS of $1.08. TXRH remains Jeff’s top casual dining pick. He sees it as the lone casual dining concept delivering MSD SSS, positive traffic, MSD% unit growth and mid-teens% EBITDA growth across 2023 and 2024.
Edition: 165
- 21 July, 2023