4Q:22 Investor Call Analysis

Mar 16, 2023 | Insights, Restaurant Research

Sales, Costs & Key Industry Commentary

Applebee’s	Operators have been keeping menu price increases to roughly half the inflation rate.
Chili’s	Company store comp of +8% consisted of +9.7% price and +5.5% mix offset by a -7.6% traffic decline (dine-in traffic remains slightly below covid levels).
Denny’s	Comps increase consisted of +7.5% price/+1% mix/-6.5% traffic. 67% of the system is now open 24/7, up +14% since midyear 2022. Notably, comps from 24/7 units outperform non-24/7 units by mid-teens.
IHOP	Value (a key construct currently) is provided with offers like: IHOPPY Hour program; BOGO crepes LTO; $6 Rooty Tooty at the beginning of the year; and customized loyalty value offers.

McDonald’s	Results driven by pricing & traffic with contributions from its Cactus Plant Flea Market promotion, McRib, Boo Buckets, digital (up +40% y/y) and delivery.
Jack in the Box	Results were attributed to: its hook-and-build menu strategy; higher staffing levels (particularly during late-night); improving service speed; and a reduction in service alert problems.
Wendy’s	Breakfast sales peaked at $3k+/week, driven by its first major breakfast innovation (French Toast Sticks) and its traffic-driving $3 Croissant promotion.
Burger King	Reclaim the Flame initiatives are starting to gain traction.

Papa John’s	Ability to hold-on to post-covid pizza demand spike during 2022 attributed to impactful menu innovations.
Pizza Hut	Results driven by: new ads highlighting both premium & value; growth from delivery partners; and its new Melts product.
Domino’s	Carryout comp was +14.3% during the quarter (+31% on a 3-year basis) while delivery comps declined -6.6% (+3.3% on a 3-year basis).

Wingstop	Efforts to increase AUV from $1.6MM currently to $2MM will be driven by: increased brand awareness; menu innovation; expanded delivery channel; data-driven marketing approach; and digital platform upgrades.
KFC	New wrap product enhances value positioning.
Popeye’s	Sales benefit from launch of its Black & Chicken Sandwich, digital and operational improvements.

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Total U.S. fixed income (FI) issuance declined -34% y/y to $8.8 trillion during 2022 as interest rates ramped up.

Bank Deposits Growing Much Faster than Business Loan Demand

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Nerdwallet Survey Shows an Indebted & Very Stressed Consumer

Consumers are combating the higher price of living & higher interest rates by driving less, buying store brands & taking on more debt.

The United States of America is Worth Saving

Americans need to be reminded about our heritage as the single most productive nation as measured by GDP/person with a unique capability to bless the entire world if we can simply get back to business.

Should Private Banks Go Extinct?

Since the 2008 Great Recession, 134 banks with assets of $1.25 Trillion have been closed by regulators. At the same time, the Fed’s ballooning balance sheet now amounts to nearly 50% of total domestic bank deposits.

What Happened to Silicon Valley Bank?

Don’t assume that SVB’s difficulties are symbolic of the entire banking industry.

What Does the End of the Petrodollar Mean?

The Saudi minister of finance announced that the Kingdom was ending the petrodollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal”. Yikes!