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Darden Restaurants, Inc. 3QFY24: Revenue +6.8% y/y, Olive Garden Comps -1.8%, LongHorn Steakhouse Comps +2.3%, Fine Dining Comps -2.3%

Darden Restaurants, Inc. 3QFY24: Revenue +6.8% y/y, Olive Garden Comps -1.8%, LongHorn Steakhouse Comps +2.3%, Fine Dining Comps -2.3%

Darden’s difficulty driving lower-income consumer traffic was especially challenging for its fine dining segment and the company plans to lean on menu consistency and everyday value at LongHorn & Olive Garden going forward. The company’s Fine Dining mix declined -2% during the quarter, subsequently improving to a low 100 bps decline at the start of the current quarter.

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Sonic 2024 Abbreviated Report

Sonic 2024 Abbreviated Report

Sonic Drive-In enjoys strong brand equity (particularly in core South & Central Plains markets) around its drive-in format with car stalls, friendly carhops and a plethora of specialty drinks & frozen treats. While Sonic is executing well around its strong & distinct brand equity while strategically increasing its value game, the opportunity remains for the chain to drive a higher check by increasing its food mix and to improve its new build economics.

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Jack in the Box 2024 Abbreviated Report

Jack in the Box 2024 Abbreviated Report

From burgers to tacos to egg rolls to flat sour dough carriers, Jack in the Box’s menu is known for variety and innovation. While Jack is doing an admirable job of executing around a solid strategic plan, the chain is challenged to hold the line on menu price increases during a turbulent macro environment that is badly aggravated by operating cost increases driven by California’s impudence.

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Chili’s 2024 Abbreviated Report

Chili’s 2024 Abbreviated Report

Chili’s (5th largest casual segment player) enjoys core brand equity as a sit-down Southwest (Tex-Mex) chain that specializes in Big Mouth burgers, sizzling fajitas, chicken crispers and margaritas. While Chili’s has been able to distinguish itself in a crowded FSR space with an attractive Tex-Mex menu, fun experience, leading value and digital strength, the chain has more work to do to bolster its store-level profitability at a time when stressed consumers are looking for more value, not less.

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Dine Brands Global, Inc 4Q23: Applebee’s Comps -0.5%, IHOP Comps +1.6%

Dine Brands Global, Inc 4Q23: Applebee’s Comps -0.5%, IHOP Comps +1.6%

Both Applebee’s & IHOP generated positive 2023 y/y comps in a difficult FSR operating environment. Applebee’s going forward sales should benefit from its new website & mobile app (improving the brand’s digital experience) and an emphasis on value & alcohol promotions. IHOP looks to build upon its 11 straight quarters of positive comps by recruiting more customers to its loyalty program (which represents a substantial growth opportunity).

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Sweetgreen, Inc 4Q23: Comps +6% & Revenues +29%

Sweetgreen, Inc 4Q23: Comps +6% & Revenues +29%

Sweetgreen, an emerging “Better for You” fast-casual dining chain that includes 225 restaurants in 18 states & D.C., is moving towards profitability. Notably, the chain’s new “Infinite Kitchen” automation, capable of improving store-level margins by +7% by generating 500 bowls/hour, points to a new future for restaurant operations.

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Pizza Hut 2024 Abbreviated Report

Pizza Hut 2024 Abbreviated Report

Pizza Hut enjoys substantial scale and strong brand equity as the 2nd largest national player in the $1B+ chain pizza segment by domestic system sales and is currently repositioning towards a modern delivery concept. While Pizza Hut’s positioning is improving, the brand must still compete around value in a tough economic environment while it simultaneously completes its asset conversion sufficient to finish its evolution into a relevant competitor in the very challenging pizza segment.

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