2Q22 Investor Calls indicate significantly higher prices and labor shortages (impacting both operating hours & delivery service) are impeding traffic (especially for low end consumers) and not able to fully compensate for current commodity and labor cost inflation. Fortunately, several companies indicated that commodity costs are peaking and expected to moderate later this year.
1Q:22 investor conference calls indicate staffing and commodity cost challenges somewhat off-set by higher menu prices and increased dine-in business.
All you need to know about 4Q21 Investor Conference Calls
All You Need to Know About 3Q21 Investor Conference Calls
● Losing stigma as a “burger place” by product innovation within breakfast, chicken products & snacks
● Diverse menu gives Jack a leg up on competition
● Strong unit economics
● Healthy development potential
• While relatively weak sector performance over the last 30 days is notable given loosening government restrictions, it may reflect the expiration of stimulus benefits which provided a tailwind over the previous 3 months.
• In any case, the tech sector’s performance (Olo, PAR Tech & Grubhub) was propelled by Olo’s post IPO strength.
• Results for 1Q21 were very positive as the industry slowly, but surely gets back to normal.
• Off-premise seems able to retain elevated sales levels even as the sit-down business returns.
• An acceleration in digital adoption is not only improving convenience, but also operator efficiency.
• Labor & food inflation continue to be a major concern.
• Stock prices in the restaurant/grocery space have come-off their 52-week highs as investors pause to better assess long-term fundamentals in the new world.
• All-the-same, stock recoveries from their 52-week lows are substantial.
● The industry continued an uneven recovery as healthy consumer demand for dine-in occasions was interrupted by vacillating government dine-in restrictions which tightened at year-end.
● Fortunately, restrictions began to ease again at the start of 2021 and, despite some uncooperative weather, 1Q dine-in comps seem to be back on track for recovery.
● QSR had a great year as any chain with a drive-thru made-out ok.
QSR names continue to benefit from an asset-light model which insulate these companies from store-level margin compression. This segment also benefits from healthy post-lockdown performance as strong drive-thru and digital access solutions translate into solid valuation multiples with many stocks trading close to their 52-week highs.