Coverage

All Reports:

Restaurant Industry
Mark Kalinowski

Restaurants: Market-Share Gains Resume, at the Expense of Groceries and Supermarkets

Data out today from the U.S. Census shows that restaurants’ market share (with grocery stores/supermarkets making up the other component) was 56.4% in January 2025. This matches the all-time high, previously also set in November 2024. The January 2025 data marks a sequential reversal from December 2024, which is the only month in which the restaurant industry ceded market share to the grocery industry since pandemic-affected February 2021.

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Wendy's (WEN)
Mark Kalinowski

WEN (Post-Call): Expects Same-Store Sales to be Negative in Q1

Earlier today (Thursday), Wendy’s reported that its fourth-quarter adjusted EPS came to $0.25. This matched our $0.25 estimate and sell-side consensus (according to Consensus Metrix) of $0.25. Fourth-quarter adjusted EBITDA reached $137.5 million. This was above our $136.2 million forecast and consensus of $134.5 million.

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Denny's Corporation (DENN)
Mark Kalinowski

DENN (Post-Call): Soft Sales to Start Q1, Adjusted EBITDA Target for 2025 Below Consensus

Earlier today (Wednesday), Denny’s reported fourth-quarter adjusted EPS of $0.14. This was one cent below our $0.15 forecast and one cent below sell-side consensus (according to Consensus Metrix) of $0.15. We calculate that the adjusted tax rate amounted to 35.7% in Q4 – well above our 25.0% projection and consensus of 24.9%. By our math, Q4 adjusted EPS would have been +2 to +3 cents higher if the adjusted tax rate had matched consensus.

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Restaurant Inflation Back to Historical Average for First Time Since Mid-2021

The latest Consumer Price Index (CPI) data shows that prices for food-at-home (grocery stores and supermarkets) rose by +1.9% in January — sequentially up by +10 basis points from December’s +1.8%. This +1.9% number compares with price for food-away-from-home (restaurants) that increased by +3.4% year-over-year in January (sequentially down by -20 basis points from December’s +3.6%). This marks the 22nd month in a row for which restaurant pricing is outpacing grocery/supermarket pricing. However, the gap between grocery pricing and restaurant pricing in January 2025 was the smallest since April 2023’s -150 basis-point gap.

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Domino's Pizza, Inc. (DPZ)
Mark Kalinowski

DPZ (Post-Call): Adjusting Our Forecasts / Q4 Earnings Preview

Earlier today, McDonald’s management remarked on its Q4 earnings conference call that “with a strong US dollar that may continue to strengthen into 2025, we expect from foreign currency to be a full year headwind to 2025 EPS, totaling in the range of $0.20 to $0.30 based on current exchange rates.”

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McDonald's Corp (MCD)
Mark Kalinowski

MCD (Post-Call): Updating EPS Estimates Based on Currencies, Interest Expense

Earlier today (Monday), McDonald’s reported adjusted Q4 EPS of $2.83. This was fairly close to our $2.85 forecast and sell-side consensus (according to Consensus Metrix) of $2.84. We calculate that the adjusted Q4 tax rate was 19.9%. This was more favorable than our 20.5% projection and consensus of 20.6%. The lower-than-forecast tax rate helped Q4 EPS by about +2 cents, relative to our projection.

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