EATZ: 1st Quarter 2023 Portfolio Review
Performance
EATZ had a strong 1st quarter, finishing up 9.65% (NAV) and outperforming the S&P 500, which was up 7.50% for the same period.
Portfolio
The restaurant industry continued to grow despite the Federal Reserve’s approach to curbing inflation, as well as labor shortages. Consumer demand is there but the rebound to pre-pandemic levels is still delayed.
Winners and Losers
The leaders for the quarter were Fat Brands Inc. (FAT) up 42.51%, Shake Shack Inc. (SHAK) up 33.61%, and One Group Hospitality (STKS) up 28.57%. The biggest drags on the portfolio during the quarter were RCI Hospitality Inc. (RICK) losing 16.12% for the quarter and SweetGreen Inc (SG) losing 8.52%.
New Positions
A new position in Brinker International Inc. (EAT) was added to the portfolio. Other trades were smaller tactical adjustments to the portfolio.
Market Update
Restaurant sales remained elevated, despite inflation, with consumers continuing to spend on experiences and services.
Top Holdings
| Ticker | Security Description | Portfolio Weight % |
| ARCO | ARCOS DORADOS HOLDINGS INC-A | 8.91% |
| BLMN | BLOOMIN’ BRANDS INC | 6.18% |
| DRI | DARDEN RESTAURANTS INC | 5.17% |
| CHUY | CHUY’S HOLDINGS INC | 5.06% |
| YUM | YUM! BRANDS INC | 5.00% |
| CMG | CHIPOTLE MEXICAN GRILL INC | 4.93% |
| MCD | MCDONALD’S CORP | 4.88% |
| BROS | DUTCH BROS INC-CLASS A | 4.77% |
| DPZ | DOMINO’S PIZZA INC | 4.74% |
| QSR | RESTAURANT BRANDS INTERN | 4.69% |
As of 03.31.2023. Cash is not included. Subject to change.
Please see our complete Fund holdings at advisorshares.com/etfs/eatz. The holdings details are updated each market day.
Definitions:
The S&P 500 Index is a broad-based, unmanaged measurement of changes in stock market conditions based on the average of 500 widely held common stocks. One cannot invest directly in an index.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
Investing involves risk including possible loss of principal. The hotels, restaurants & leisure industry is highly competitive and relies heavily on consumer spending for success. The prices of securities of companies in the industry may fluctuate widely due to general economic conditions, consumer spending and the availability of disposable income, changing consumer tastes and preferences and consumer demographics, in addition may be affected by the availability and expense of liability insurance. Legislative or regulatory changes and increased government supervision.
The success of companies owning and operating restaurants depends heavily on disposable household income and consumer spending, and changes in demographics and consumer preferences can affect the success of such companies. These companies may be subject to severe competition, which may have an adverse impact on their profitability. In addition, restaurants may be affected by nutritional and health concerns, and federal, state and local food inspection and processing controls. Changes in labor laws and other labor issues, such as increased labor costs, could adversely affect the financial performance of such companies.
Shares are bought and sold at market price (closing price) not NAV and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined), and do not represent the return you would receive if you traded at other times.
Holdings and allocations are subject to risks and to change.
The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or anytime thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.