Darden reported that industry same-restaurant sales increased +0.9% and industry same-restaurant guest counts decreased -4.2% during its fiscal 1Q24. The chain’s comps outperformed the industry by +4.1% and its traffic outperformed by +4.3% (= flattish traffic for Darden during the quarter).
Corporate Insights
Walmart Investor Presentation: Inflation Here to Stay
While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.
DoorDash 2Q23: Restaurant Biz Profits Improving
DoorDash reported very resilient growth in its core U.S. restaurant category with frequency at an all-time high, showing that restaurant delivery has legs post-covid.
US Foods Holdings 2Q23: Net Sales +2% & Adjusted EBITDA +17%
Modest y/y product cost deflation was driven by center-of-the-plate categories despite slight grocery inflation. +5% growth in independent restaurant cases and +7% growth in both healthcare & hospitality was offset by a -4% chain restaurant decline (reflecting weak traffic).
Checking on Retail Sales & The E-Commerce Mix
Aggregate advanced retail sales (including e-commerce) growth flatlined during 2Q23 & while government data for e-commerce sales performance by itself is unavailable during this period, Amazon’s performance during its recently released 2Q23 report looks solid.
eBay 2Q23: +47% Revenue Growth from Promoted Listings
While eBay makes good points about the strength of its positioning (especially during periods of economic stress), its pool of buyers and gross merchandise volume has been steadily trending down, providing an important clue to consumer spending patterns.
Marriott International 2Q23: Travel Recovers as Borders Begin to Open
Marriott’s 2Q23 systemwide constant dollar RevPAR (revenue per available room) comp increased +13.5% y/y worldwide, +6% in the U.S. & Canada, and +39.1% in international markets. This has important implications for consumer spending…
Economic Insights from FedEx’s 4Q23 Results
While consumer spending growth is currently running +7% to +8%, FedEx’s growth is closer to +2% to +3% because of the post-covid e-com reset & economic pressures which are shifting consumer spending share back towards in-store shopping for non-discretionary items (like groceries) & away from online purchases & delivery for discretionary goods.
Amazon’s 1Q23 Reports on the Consumer & AI
Customers seek to stretch their budgets further & are focused on value. This is not the case for enterprises looking to implement AI, and Amazon is ready to capitalize on helping implement this burgeoning tech which is poised to transform customer service.
Domino’s 1Q23 Results Shine Light on Low-Income Consumers
Domino’s reports that there is only a 15% customer overlap between delivery & carryout. With certain low-income consumers pulling away from expensive delivery fees to eat at home, there is apparently another low-income consumer segment stepping up for carryout.