FSR Commentary
Cheesecake | A challenging y/y comparison reflects last year’s “revenge buying” with heightened purchases of alcohol, dessert, and appetizers. |
| Texas Roadhouse | While management reports strong demand with consumers trading down into Texas Roadhouse, new customers are selecting value items, driving alcohol and entrée mix declines. |
Chili’s | 6.3% y/y growth for company stores reflecting +9.4% price and +4.6% mix offset by a -7.7% traffic decline. Notably, quarterly dining room traffic improved y/y. |
BJ’s Restaurants | BJ’s restaurant-level margins reached its highest level since covid, with better-than-expected COGS & labor margins. |
Darden | Darden reported that GDP weakness over the last 4 quarters is driving associated traffic declines across the restaurant and retail industries. |
| Denny’s | The return of its signature Super Slam (starting at $7.99) was a highlight of the quarter, with value mixing at 16%, up slightly from 15% during 1Q23. 75% of Denny’s restaurants operate 24 hours/day with a goal of getting to 90%. |
| IHOP | IHOP is focused on providing guests with more breakfast favorites, fresh ingredients, and great value. |
Applebee’s | Results reflected weak traffic trends, difficult comps and a slightly more hesitant consumer. |
QSR Commentary
| Wingstop | A clear line of sight to a $2MM AUV is based upon a strategy to: build brand awareness; drive menu innovation; expand delivery; and progress in digital transformation & data-driven marketing. Also, the brand has an opportunity to increase its penetration among heavy QSR users (those that drive 60%+ of all QSR visits) who have either not heard of, or have not tried Wingstop. |
| McDonald’s | The chain’s positioning benefits from leading value for money and affordability scores. |
| Burger King | Results driven by: effective marketing initiatives focused on its flagship Whopper; enhanced marketing analytics; and continued operational improvements which are helping to improve traffic trends. |
| Jack in the Box | Results reflected continued staffing and operating hours improvement, particularly during late-night which benefitted from Jack’s Snoop Dogg promotion. |
| Chipotle | As if Chipotle’s sales aren’t impressive enough, this leading fast-casual chain is investing in operational improvements sufficient to create additional throughput to meet demand. |
| Starbucks | Starbucks’ digital prowess helped facilitate an all-time high food attachment during its fiscal 3Q23, driving a higher ticket and record average weekly sales. |
| KFC | Building on 1Q momentum behind wraps, KFC launched its hand-breaded original recipe chicken nuggets (with 100MM nuggets sold in the first 8 weeks after launch) to expand its off-the-bone chicken offerings. |
| Wendy’s | Results benefited from: breakfast & late-night daypart strength; digital strength; and a focus on upselling big sandwiches & higher priced value offers. |
| Popeye’s | Sales benefited from: an extension of its chicken sandwich platform; Ghost Pepper Wings; beverage & dessert innovation; and +22% growth in digital sales. |
| Taco Bell | Results driven by: campaign to liberate Taco Tuesday in partnership with LeBron James; successful promotions of its $5 Cravings Trios & Deluxe Build Your Own Cravings Box; and extended hours that boosted breakfast & late-night daypart sales. |
| Shake Shack | 2Q23 in-Shack traffic increased +4.7% y/y with a +10.7% y/y increase in same-Shack sales in its in-Shack channel as more guests, who are migrating to their in-person habits, are using Shake Shack’s new kiosks which are driving mix & check. |
| Sweetgreen | The fast-casual chain, Sweetgreen, which serves food with seasonal & organic ingredients, continues to gain financial and operational ground even as its comps slowed during the quarter. |
| Pizza Hut | Results helped by incremental individual occasion transaction growth primarily driven by sales of its attractive priced Melts platform (with new flavor profiles added during the quarter). |
| Domino’s | Carryout comps increased +5.6% y/y while delivery comps declined -3.5% y/y. New Uber Eats partnership should help drive sales growth and extend reach to a higher income demo. |
| Papa John’s | Comp decline consisted of +2.2% company stores/-2.3% franchised stores. Company stores enjoyed ticket & traffic growth, while franchisee ticket growth (reflecting aggressive price increases) was offset by lower traffic. |
Order Report
