Dashboard: Capital Markets

Oct 4, 2022 | Dashboard, Restaurant Research

Capital Markets Dashboard - Sep 2022

Stock Performance


The consumer is certainly under pressure, with tepid disposable income growth insufficient to keep-up with inflationary pressures generated by significant increases in product prices, gas prices, rent, interest payments, utilities and forthcoming home heating costs. We can see from the table below that this is translating into a lower savings rate and higher consumer debt levels. In any case, the CEO of Dollar General believes the consumer could weather this economic storm if they remain employed even though it will be difficult for the next quarter or so. Unfortunately, the Fed has made it abundantly clear its intention to increase unemployment levels to fight inflation! 

We see macro-economic prospects weighing-in heavily on restaurant stocks with a -33% median YTD decline for QSR stocks and a -25% median drop for FSR stocks. Simply put, struggling consumers cannot absorb menu price increases sufficient for restaurant operators to pass along their tremendous cost pressures (which are fortunately expected to moderate). This point is well illustrated by Darden’s recent FY1Q23 reporting when management took solace in the fact that the company is sufficiently diversified beyond the struggling lower-income demo. Let’s hope the afflictions of the lower-income demo does not catch-up with the rest of the country!

No Bull Economics
Restaurant Research

Email Sign-up

Jack in the Box Corporate Insights

Jack in the Box results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night.

How to Circumvent Food Shortages?

The vulnerabilities of a long-distance supply chain have become very evident over the last couple of years, especially when it comes to farming.

This Week in Summary 11/18/2022

We want to spotlight Target this week which provides valuable insight on consumer spending.

How Would You Value the Federal Reserve?

Here is an idea: let’s take the Federal Reserve public in the world’s largest IPO.

How to Pass Along Inflationary Costs Without Losing Traffic?

Wendy’s is avoiding standardized menu price increases and turning to strategic increases designed not to price out lower income consumers.

Investors in Retail Stocks Think Consumers are Back

Recent retail stock gains would suggest that investors are confident in consumer strength, despite continuing inflationary issues.

Papa John’s & Chili’s Reveal the Plight of Cash Strapped Consumers

The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?

This Week in Summary 11/11/2022

Market melt up & the midterm elections

DoorDash’s Grip on Labor Costs is Funding New Investments

Doordash’s platform generated +10% of all restaurant industry sales.

3Q Results for Bloomin’, Texas Roadhouse & Cheesecake

Full serve restaurant sales performance is currently a function of customer demographics.

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company