Restaurant Research

McDonald’s 2024

McDonald’s 2024

McDonald’s enjoys substantial brand equity as the largest and possibly most influential restaurant chain with its “I’m lovin’ it” positioning and iconic brands including the Big Mac, Quarter Pounder, chicken nuggets & fries. While McDonald’s is well positioned in QSR as the go-to brand, the chain may have to make more margin unfriendly price adjustments for its lower-income customers in the near term while it continues its very important work of improving its service speed.

RBI 1Q24 Revenues +9.3% & Operating Income +7.7%; Burger King U.S. Comps +3.9%; Tim Hortons Comps +6.9%; Popeyes U.S. Comps +6.2%; Firehouse Subs U.S. Comps Flat

RBI 1Q24 Revenues +9.3% & Operating Income +7.7%; Burger King U.S. Comps +3.9%; Tim Hortons Comps +6.9%; Popeyes U.S. Comps +6.2%; Firehouse Subs U.S. Comps Flat

Burger King’s results reflect traction from investments in remodels, digital, & equipment. Tim Hortons seeks to improve its afternoon menu offerings, Popeyes is riding the success of its wing platform & Firehouse Subs is making a big push to have a 100% digital mix (currently at 40%) while providing franchisees with incentives to develop new stores.

Starbucks Corporation 2QFY24: Could be Better…

Starbucks Corporation 2QFY24: Could be Better…

Starbucks reported that it continues to feel the impact of a more cautious consumer, particularly as it relates to occasional customer visits during the afternoons & evenings. 2QFY24 results further reflected a deteriorating economic outlook, weak industry traffic & bad weather. Going forward, Starbucks will seek to offer more coffee variety & value to bolster its occasional customer business while seeking to add peak AM capacity.

Subway 2024

Subway 2024

Subway is the largest sub sandwich chain by far and continues to progress with a brand repositioning including a new menu, marketing, and remodel program. While Subway has turned the corner in terms of improving its relevancy and market positioning, the chain has a lot of work to do to improve its unit level economics in a crowded sub sandwich field.

Restaurant Research’s Capital Markets Dashboard for May 2024

Restaurant Research’s Capital Markets Dashboard for May 2024

The S&P 500 declined -4% in April, slightly bested by QSR’s median -3% results but far outperforming FSR’s -8% median decline. Granted, there are a lot of disappointing macro, macro global & national political/military concerns. Further, there is the issue of the Fed’s reluctance to give the working poor a break by cutting rates. However, the companies are not doing so bad and the stock market is about earnings, right??

2024 Remodel Report

2024 Remodel Report

A historically slow remodel pace reflects: significantly higher construction & equipment costs; lower store level profitability; and less favorable borrowing terms which has resulted in less than half of system units incorporating the current image.

IHOP 2024

IHOP 2024

IHOP is well positioned as the largest player in the $1B+ family chain segment whose brand awareness reflects its positioning around: an unexpected twist on “all things breakfast, any time of the day”; world famous pancakes; flavored syrups; and the never empty coffee pot. While IHOP’s strategy and execution provide a solid long-term positioning, the potential need to pivot further towards value given the current economic environment could be constrained by the system’s unit level EBITDAR margin which significantly underperforms its own 2015 best.