May 31, 2021
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About this Deal
The past year has been, shall we say, “less than kind” to the restaurant and hospitality industry, and when it comes to publicly traded chain restaurant groups, we know exactly how bad the bleeding has been. Five months ago it was hard for the industry to see light at the end of the tunnel, and yet here we are, slowly returning to something resembling normalcy, with a ravenous public desperate for never-ending pasta bowls and human contact.
Industry publication Nation’s Restaurant News rounded up last quarter’s earnings reports from some of America’s most popular restaurant chains, all of which include data from the last two weeks of March, when America’s mass-vaccination program was just beginning to take off; though it’s hard to determine what this industry might look like after our stomachs spend a summer making up for lost time, there’s an excellent chance that compared to last quarter, chain restaurants will be releasing the sort of sales reports that finally give the restaurant business something to cheer about.
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The good news
The biggest winner of the pandemic was delivery, so it should be no surprise that Papa John’s has been doing gangbusters; in its first fiscal quarter of 2021, the company has seen a same-store sales increase of 26%.
Not all the good news has to do with delivery; during its last quarter ending on April 11, Jack in the Box reported 20.6% same-store sales growth.
Back to pizza: Domino’s reported its same-store sales have gone up 13.4%, but things are not all wine and roses, NRN reports. CEO Ritch Allison says the company is facing “one of the most difficult staffing environments in a long time,” which could have something to do with wages.
In the sit-down sector, Texas Roadhouse reports that sales at company-owned locations have increased 18.5% when compared to 2020, and 8.6% compared to 2019.
Chipotle has been betting big on digital sales, and it’s been paying off: the company saw a sales increase of 17.2% during its first quarter, with its digital business growing 133.9% and accounting for more than half of sales.
McDonald’s reported a same-store sales growth of 13.6%...
And Wendy’s reported same-store sales growth of 13.5%. So close, Wendy’s! So close!
Starbucks saw its same-store sales increase by 9%, which is the first time its sales have trended positive since the pandemic began last March, meaning things are looking good as we head into Frappuccino season.
Fast food conglomerate Yum Brands had nothing but positive news to report: sales at Pizza Hut are up 12%, Taco Bell is up 9%, and KFC, 8%.
Shake Shack began the pandemic by inviting us to make our own ShackBurgers and is gliding into its next quarter with sales up 5.7%. Most of Shake Shack’s locations are in densely populated and tourist-heavy areas, which are slowly seeing traffic increase as local ordinances are lifted.
Shockingly, Restaurant Brands International Inc.—owner of Burger King, Popeyes, and Tim Hortons—did not do the kind of numbers its competitors did. Last quarter sales at Burger King’s U.S. locations was up 6.6%; and globally, a paltry 0.7%. Popeyes fared better globally with a 1.5% sales increase, but when international sales are excluded, that number shrinks to 0.9%. Both are doing better than Tim Hortons, though, which saw its sales decrease by 2.3% last quarter.
The not-so-good news
It should come as no surprise that the majority of hemorrhaging has been in the sit-down dining category. Darden Restaurants Inc. reported that same-store sales have declined 25.8% at Olive Garden, 12.6% at LongHorn Steakhouse, and 36.9% for its other brands in its fiscal quarter ending on February 28.
It’s not all bad news for Brinker International, which reports that Chili’s restaurant sales have increased by 0.6%. Maggiano’s Little Italy, on the other hand, has seen sales drop 29.6%.
When Denny’s first quarter closed on March 31, the company reported that same-store sales had declined 20%. But the good news is that the company has announce its sales April were only down 2%, so things are looking up!
Ruth’s Chris reports that while overall sales were down by 14.8% at the end of Q1 on March 28, the situation seems to be improving at an exponential rate, with sales shooting up 72% during the month of March. Seems like people are celebrating getting vaccinated with big, fancy steak dinners, and who can blame them? If there’s ever been a situation that warrants that kind of gustatory extravagance, it’s this.
And, finally, things continue to be terrible for Dave & Buster’s, which reported a same-store sales decrease of 70% for its fourth quarter ending on January 31. Perhaps things will get better in 2021, but we won’t know until the next report.