Interacting with CEOs and their teams up close and personal is really fun stuff, as well as highly fascinating.
I am wrapping up four days of coverage of the ICR Conference (mostly of consumer companies) in Florida today.
The days have been mental grinds -- from popping into and out of 30-minute presentations, to authoring in-depth pieces to sitting with CEOs and CFOs in makeshift meeting rooms. During this time, I watched one CEO sit across from me visibly nervous to answer a question about profit margins. This CEO was rubbing his hands together and constantly looking down and off to the side, and he quickly changed the subject to something more positive. Super nice fella, but not sure I would recommend my mom go out and purchase the stock with $10,000 from her nest egg.
Another exec dismissed the impact that a slowdown in emerging markets would have on U.S. trade, and in turn, on the business he has overseen for years.
But amid the companies that gave me pause, there were several that stood out for a great presentation: warm and very knowledgeable CEOs, or something else that caught my attention and appreciation. Here are three of those standouts (outside of Shake Shack, who gave a sharp presentation and whose CEO, Randy Garutti, continues to impress me with his energy for the brand).
Mattress Firm (MFRM)
The company gave one of the most in-depth presentations I attended. There were real reasons to be optimistic on the company's prospects, as it attempts to become the first true national bedding retailer. First, the company's acquisition of Sleepy's is about to close, which will significantly boost its presence in many markets.
I think the Sleepy's brand will go away over time, and Mattress Firm will gain more efficiencies from the integration than it has articulated to Wall Street. Second, the reality is that people have not upgraded their mattresses going on 10 years. I believe the replacement cycle for mattresses is about to kick into high gear, which will benefit Mattress Firm.
The company did not present at the conference, but in my view its presence was felt. Organic grocer Hain Celestial (HAIN) slashed its sales and earnings guidance on Monday evening. I sat in on the company's presentation Tuesday afternoon and left with the sense that a raft of competitors -- from upstart organic brands to packaged food companies selling organics to private label organics from grocers -- will continue to weigh on performance in coming quarters. Hain Celestial 's founder and CEO, Irwin Simon, is a very nice guy with a great story. But, investors might want to refrain from buying the stock on weakness, right now.
On the other hand, Hain's news told me that Kroger, armed with a successful private-label organics brand in Simple Truth, continues to steal market share from more expensive products sold by Hain. It also benefits by selling Hain products, which may become a little cheaper soon in a bid to regain market share, inside of a thriving health and wellness space.
I continue to be a fan of the company, latching onto the name months ago following an in-depth testing of the entire menu and a chat with its CEO. There are multiple things to like here. One, the operations are simple -- some fryers in the back and limited labor. Both are great elements to have in a restaurant industry being hurt by rising wages and consumers demanding their food faster than ever before. Moreover, the menu is highly focused, and will likely stay that way for the foreseeable future. As icing on the cake, the company pre-announced a solid fourth quarter of sales that many in the restaurant business would love to have achieved.
Wingstop had a truck parked at the conference Monday night serving wings to guests while we all watched the college bowl game. I walked around the room informally asking people about how they liked the wings (I like them. In my view the quality is a cut above Buffalo Wild Wings (BWLD)) -- the majority loved them, and asked me (the CEO was also in attendance, but was under the radar, in a sweater) where they can visit the chain or when one might open. Not exacting research, here, but pretty interesting insight ahead of the chain's aggressive expansion plans.