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Restaurant Earnings Show Continued Recovery  

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Restaurant Earnings Show Continued Recovery  

Foodservices’ latest quarters have seen mixed results as restaurants continue to cope with pandemic-related losses.

In 2020, restaurant and foodservice industry sales fell by $240 billion, from an expected level of $899 billion, according to the National Restaurant Association’s 2021 State of the Industry Restaurant Report. As of Dec. 1, 2020, more than 110,000 eating and drinking places were closed temporarily, or for good, while the sector finished the year nearly 2.5 million jobs below its pre-coronavirus level.

However, some brands are certainly faring better than others. In particular, fast food is recovering at a better rate than casual or full-service dining. Here are a few recent earnings reports from major brands:

STARBUCKS

Starbucks’ U.S. same-store sales fell 5% during its fiscal first quarter. The coffee giant reported net income of $622.2 million, or 53 cents per share, down from $885.7 million, or 74 cents per share, a year earlier.

Although a surge of new COVID-19 cases led to harsher dining restrictions, the company managed to open 278 net new stores in the first quarter, yielding 4% year-over-year unit growth, ending the period with 32,938 stores globally.

However, net sales dropped 5% to $6.75 billion. Worldwide, same-store sales fell 5%. The company saw 19% fewer transactions during the quarter, but the average ticket jumped 17%. Notably, the Starbucks Rewards loyalty program’s 90-day active members in the U.S. increased to 21.8 million—up 15% year-over-year.

BRINKER INTERNATIONAL

Brinker International, which owns casual dining chains such as Chili’s Grill & Bar and Maggiano’s Little Italy, reported that company-owned, same-store sales were down 12.1% in its fiscal second quarter, reported Seeking Alpha (Jan. 27).

Company-owned comparable sales fell 6.3% at Chili’s and were down 47.0% for the Maggiano’s chain, while restaurant margin came in at 11.3% of sales versus 12.2% consensus, and operating margin was 7.2% vs. 4.4% consensus and 6.9% last year.

As of Jan. 20, approximately 82% of Chili’s and 69% of Maggiano’s restaurants were operating with open dining rooms, though capacity restrictions were often in place, as noted in a company press release.

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MCDONALD’S

On Thursday, McDonald’s reported its U.S. same-store sales were 5.5% in its latest quarter, reported CNBC (Jan. 28). For the fourth quarter ending Dec. 31, the fast-food giant had net income of $1.38 billion, down from $1.57 billion a year earlier.

In the U.S., same-store sales were positive for the second quarter in a row at 5.5%, while global comparable sales declined 1.3%. The company credits the U.S. sales with marketing investments and promotional activity, specifically those focused on its core items such as the Big Mac.

In 2021, McDonald’s performance could be bolstered by digital and menu advancements made in 2020. KeyBanc Capital Markets analysts said the company is using technology for more effective marketing, including its Travis Scott meal deal, reported MarketWatch (Jan. 27).

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