I do agree labor will continue to be a pain point but I don't believe it will be a shock that will negatively affect sales like the start of Q3.
It appears from the commentary COS will remain under pressure in FY23. Debt is now quite high and the cost of debt is rising. Margins will continue to be squeezed.
Can they increase sales and revenue to offset this? After all chicken is a cheaper product and as families are squeezed with their mortgage repayments they will gravitate towards this.
I had thought about selling out and booking a modest profit at $3.10 but also thought that there is a good chance the stock price is the same in 9 months when I reach my 12 month holding period, creating a much more tax advantageous position.
In summary, the business is under pressure but I think you (baring any major event) would say this is the height of cost pressures they should face.
Pretz
ING Price at posting:
$2.97 Sentiment: None Disclosure: Held
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