Tough restaurant year continues, especially for Papa John's
The restaurant industry landscape continues to be challenging for leading operators, according to Technomic's compilation and analysis of third quarter earnings reports. To date, approximately 60 companies have released their third-quarter financials with more than half reporting declines in comparable quarterly sales
On average, publicly held companies saw their third-quarter comparable sales drop by 1.3 percent, and full-service operators were the hardest hit with 24 of 32 companies posting negative quarterly comparable sales, Kevin Schimpf, industry research manager at Technomic, said in the release
"As we look to the fourth quarter, expect modest improvements in comparable sales as operators face easier quarterly comparisons from the prior year and also begin to turn a corner on hurricane-related performance issues," he said.
Below is a brief look at the operators who fared well in the third quarter and those who fell short.
3 big, beefy winners
McDonald's has seen its U.S. comparable sales increase for three consecutive quarters, rising from a second-quarter mark of 3.9 percent to 4.1 percent growth in the third quarter. National beverage and McPick 2 value promotions were noted as key factors driving sales growth.
Texas Roadhouse continues to be one of the few bright spots in the casual dining segment, posting 4.5 percent comparable sales growth in the third quarter, propelled by customer traffic gains of 3.5 percent.
Burger King's 4 percent growth is its highest U.S. comparable sales mark since the first quarter of 2016. Globally, comparable sales increased by 3.6 percent with strong unit expansion boosting quarterly system-wide sales growth to 6.6 percent.
A year to forget for Papa John's
Chipotle posted 1 percent comparable sales growth in the third quarter, which marks three consecutive quarters with decelerating same-store sales. While year-to-date comparable sales growth stands at 8.3 percent, the company projects to close out 2017 with comparable sales of 6.5 percent.
Papa John's has now observed four straight quarters of decreasing comparable sales growth and is also facing widespread criticism over attributing its declining performance to falling NFL TV viewership and negative sentiment surrounding the league. The company posted 1 percent North American comparable sales growth in the third quarter with year-to-date growth registering at 1.5 percent.
The fast casual segment continues to see a relative downturn in 2017, as eight of 11 publicly held fast casual chains posted negative third-quarter comparable sales, including key segment players Shack Shake, Potbelly and The Habit Burger Grill.
Topics: Financial News