Restaurants’ Latest Quarterly Results Provide Clearer Picture of Covid-19 Impact

There were a couple of bright spots among major U.S. chains

McDonald's was among the major restaurant chains that reported earnings this past week. Getty Images
Headshot of Richard Collings

Key insight:

Fast food and coffee chains reported their latest quarterly earnings this week—namely McDonald’s, Yum Brands, Restaurant Brands International, Starbucks, and Dunkin’—providing a clearer picture of the repercussions the coronavirus pandemic has had on the industry.

Notably, same-store sales at several chains that broke out numbers for when stay-at-home orders began to be issued largely fell between 25% and 35%.

Bucking the prevailing trend, however, were Domino’s Pizza and Restaurant Brands International’s Popeyes.

The chicken chain’s same-store sales grew a mouthwatering 26% during the overall quarter, as the allure of its chicken sandwich is proving to be pandemic resistant.

Domino’s, which reported results last week, provided a snapshot of the first three weeks of its second quarter from March 23 to April 19, during which same store sales were up a promising 7% in the U.S.

It wasn’t all good news at Restaurant Brands, which also includes Burger King and Tim Hortons. Its first quarter results showed comparable sales for the quarter were down 3.7% at its flagship brand, and fell more than 10% for its Canada-based coffee chain.

McDonald’s, meanwhile, broke down its comparable sales for the first quarter into segments. Its same-store sales for the period most acutely affected by the pandemic fell 25% between mid-March and mid-April, its CFO Kevin Ozan said during an earnings call. For the first quarter as a whole, global comparable sales were down 3.4%.

Yum experienced flat same-store sales globally the first week of March, with a decline the following week as comparable sales fell 10%. From the second half of March and into April, same-store sales globally plummeted 30% on average, with 20% of its stores closed, the company’s CFO Christoper Turner said during its quarterly earnings call.

Yum’s individual brands reflected the company-wide results, with same-store sales down for Pizza Hut between 20% and 25% during the late March and early April timeframe, while Taco Bell declined nearly 30% and KFC fell about 35%, he said.

But improvement is in the offing for the fast food conglomerate: Turner said that “since that time period and in recent weeks, we have seen global sales trends improve significantly across all brands in restaurants that are open and operating.”

He said the company still has about 10,000 stores closed, and how the business fares going forward will depend on the pace of reopening in Asia and the U.S.

Same-store sales at U.S. locations of Dunkin’ declined a little more than 19% during the last three weeks of March. Comparable sales at sister brand Baskin-Robbins were down a little more the 23% during the same three-week period, according to the company’s earnings announcement.

Starbucks also reported same store sales results this week for its latest quarter, with a 3% decline in the Americas and the U.S., while internationally comparable sales fell more than 30%.

Chipotle, which reported its quarterly earnings last week, disclosed that while March began on a positive note, as Covid-19 restrictions became more prevalent, the company’s comparable sales fell 16% for the month, with the week ended March 29 in particular down 35%.

Domino’s said comparable sales for the U.S. in the first quarter increased 1.6% versus 3.9% for the same period a year prior, while internationally they were up 1.5% compared with 1.8% for the prior year. The company noted that nearly all of its U.S. stores remain open.

While the U.S. is a bright spot for the pizza delivery chain, it said that same-store sales for its international stores declined 3.2% during the first three weeks of the second quarter.


@RichCollings richard.collings@adweek.com Richard Collings is a retail reporter at Adweek.
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