Quarterly results announced over the past two weeks by some of the largest restaurant and fast-food operators—including Yum! Brands, McDonald’s, Starbucks and Dunkin’—show that sales are increasing incrementally month by month. That indicates diners across the U.S. are returning, even as quarterly results declined significantly due to Covid-19. While certain segments of the hard-hit restaurant industry are suffering more than others, some companies are figuring out how to operate more effectively and avoid the worst of the pandemic. For example, fast-casual chains, such as Chipotle, that are marrying investment in digital with a message of cleaner food are reporting promising numbers.Meanwhile, McDonald’s released results that were disappointing, given the company’s operating prowess historically. Breakfast, in particular, has taken a hit, said CFO Kevin Ozan during an earnings call. It’s not yet known whether that is entirely due to Covid-19 or the result of increased competition.Wendy’s, which has yet to report its numbers, launched breakfast just prior to the pandemic. In the couple of weeks before restaurants began shutting down or limiting service, the company’s CMO Carl Loredo told Adweek comparable sales were up 15% in part due to breakfast.Pizza sales are also faring better than most—Domino’s, for example, said same-store sales grew some 16% during its most recent quarter—but the coffee business needs a jolt. Starbucks continues to get beaten up by the pandemic with a 40% same-store sales decline both globally and in the U.S. in its most recent quarter. Dunkin’, likewise, saw revenue, system sales and comparable sales all fall between 18% and 20%.We won’t know the full story until Wendy’s and Restaurant Brands International, the parent of Burger King, Popeyes and Tim Hortons, release their quarterly results next week. Until then, here’s how some of the leading restaurant chains’ numbers break down.Yum! BrandsThe parent of KFC, Taco Bell and Pizza Hut said revenue for its second quarter ended June 30 declined 9% to nearly $1.2 billion. Net income, though, fell 29% to about $200 million.Yum said total system sales globally, including owned locations and franchisees, declined 12% during the quarter. KFC (down 18%) took the biggest hit, while Pizza Hut declined 10% and Taco Bell was down 6%.Same-store sales at Yum, meanwhile, were down 15% globally, with KFC declining 21%, Pizza Hut down 9% and Taco Bell off 8%.For the U.S. market, however, Yum had plenty positive to report.KFC’s system sales were up 8% in the second quarter and same-store sales grew 7%, while Pizza Hut’s system sales were up 1% during the period and same-store sales grew 5%.“Digital sales were a big driver of the dramatic improvement in sales from the initial impact of Covid-19, reaching an all-time high of $3.5 billion for the quarter, an increase of more than $1 billion over the prior year,” said David Gibbs, the company’s CEO, in a statement.McDonald’sThe burger chain said revenue fell 30% year over year in the second quarter ended June 30 to about $3.76 billion, while net income fell 68% to about $480 million.Global comparable sales at McDonald’s, meanwhile, declined 23.9%, and system sales decreased 24%. Comparable sales in the U.S., though, were relatively better, down 8.7%.There was also a sequential improvement on a monthly basis in the U.S. during the quarter, with a same-store sales decrease of 19.2% in April, a decline of 5.1% in May and June down only 2.3%.“Our strong drive-thru presence and the investments we’ve made in delivery and digital over the past few years have served us well through these uncertain times,” said Chris Kempczinski, McDonald’s CEO, in a statement.Domino’sThe pizza chain continues to be one of the biggest gainers during the pandemic. For the second quarter ended June 14, revenue at Domino’s grew in the neighborhood of 13.5% year over year to $920 million, while net income increased 12.9% to nearly $120 million.Continue Reading
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