The COVID-19 pandemic might have benefited food retailers by driving up demand for processed food products but companies in the foodservice industry took a real hit from the crisis as they had to shut down most of their restaurants or operate under restricted hours. During the lockdown period, takeaway and delivery services saw a large uptick and those with strong delivery channels managed to use it to their advantage.
Darden Restaurants
Darden Restaurants (NYSE: DRI) saw sales decrease 19% year-over-year in the second quarter of 2021 with sales declines across all its segments. Same-restaurant sales fell 20.6%. Although the company had around 97% of its dining rooms open in the middle of the quarter, this fell to 80% by quarter-end, impacting same-restaurant sales by 200 basis points. This downtick in sales impacted operating income by around $15 million. For the third quarter of 2021, Darden expects total sales to range from $1.53-1.65 billion and EPS to range from $0.50-0.75.
Starbucks
Starbucks Corporation (NASDAQ: SBUX) reported an 8% decline in net revenues for the fourth quarter of 2020 mainly due to lost sales caused by the pandemic. Net revenues declined over 11% for fiscal year 2020. Lost sales amounted to around $1.2 billion for the fourth quarter and around $5.1 billion for the full year. For FY2021, Starbucks expects adjusted EPS of $2.70-2.90.
Chipotle Mexican Grill
After seeing its net sales drop 5% in Q2 along with a decline of 9.8% in comparable restaurant sales, Chipotle Mexican Grill (NYSE: CMG) managed to drive an uptick in sales by the third quarter of 2020, delivering a 14% growth in revenue along with an 8.3% increase in comps. Since the decline seen in late March, the company was able to retain 80-85% of its digital sales gains while recovering 50-55% of its in-store sales. Chipotle’s digital channel played a key role in helping it regain growth and the company has been investing significantly to improve its delivery services.
Yum Brands
Yum Brands Inc. (NYSE: YUM) too suffered from pandemic-related store closures and saw revenue fall 9% in the second quarter of 2020 along with declines across all its segments. However the company managed to improve its performance in Q3 with a net sales increase of 8% and sales growth in the Pizza Hut and Taco Bell divisions. KFC posted a sales decline of 4% in Q3 after seeing a 30% drop in Q2.
Yum has a strong digital channel which delivered a sales increase of more than $1 billion in Q3. The company’s delivery services played a significant role in the growth pickup during the most recent quarter.
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
Most Popular
Hormel Foods (HRL) to report Q4 2024 earnings results, a look at what to expect
Shares of Hormel Foods Corporation (NYSE: HRL) rose over 1% on Friday. The stock has gained over 5% in the past one month. The branded food company is slated to
What to look for when Hewlett Packard (HPE) reports Q4 2024 results
Information technology company Hewlett Packard Enterprise (NYSE: HPE) is actively innovating its product portfolio to better align with the AI-driven transformation currently sweeping the industry. In recent quarters, the company's
What to expect when Dollar General (DG) reports Q3 2024 earnings
Shares of Dollar General Corporation (NYSE: DG) rose over 1% on Wednesday. The stock has dropped 38% over the past three months. The discount retailer is slated to report its earnings