Coverage

All Reports:

Cheesecake Factory (CAKE)
Mark Kalinowski

CAKE (Post-Call): Margins Coming Back as Guests Come Back

After Tuesday’s market close, The Cheesecake Factory reported adjustedQ2 EPS of $0.80, ahead of our $0.63 forecast and sell-side consensus (according to Consensus Metrix) of $0.77. Factors contributing to the Q2 EPS outperformance relative to our forecasts include: (1) Cost of Sales/Revenues 22.0% actual vs. 22.5% projected, (2) Labor Expenses/Revenues 35.7% actual vs. 36.1% projected, and (3) D&A/Revenues 2.9% actual vs. 3.3% projected. Second-quarter same-store sales for brand Cheesecake Factory rose by +150.0%, slightly exceeding

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Starbucks Corp. (SBUX)
Mark Kalinowski

SBUX (Post-Call): A Crisp Quarter, Although Shares Have Been Frothy as of Late

After Tuesday’s market close, Starbucks reported fiscal Q3 (calendar Q2) adjusted EPS of $1.01, easily topping our $0.79 forecast and sell-side consensus (according to Consensus Metrix) of $0.78. The fiscal Q3 tax rate of about 18.2% was more favorable than our 25.5% estimate (and consensus of 25.6%). We calculate that the difference between the 18.2% tax rate and our 25.5% estimate accounted for about nine cents of the 22-cent EPS outperformance relative to our $0.79

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

DPZ (Post-Call): Saucy Same-Store Sales and Tangy Earnings

Earlier today, Domino’s reported adjusted Q2 EPS of $3.12, surpassing our $2.90 forecast and sell-side consensus (according to Consensus Metrix) of $2.88. U.S. same-store sales rose by +3.5% in Q2, successfully lapping the tough Q2 2020 figure of +16.1% (the second-best quarterly showing for Domino’s U.S. in the last 90 quarters through Q2 2021). This is helping to give investors comfort as Domino’s will lap challenging, double-digit numbers from Q3 2020, Q4 2020, and Q1

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McDonald's Corp (MCD)
Mark Kalinowski

MCD: McDonald’s Franchisee Survey Part 2 Focuses on Labor Availability

Today we publish part 2 of 2 of the July 2021 edition of our proprietary McDonald’s Franchisee Survey. Much of this report focuses on challenges around labor availability. We asked our franchisee respondents “By what percent (if any) were your stores’ sales hampered by lack of labor availability?” The responses were quite surprising to us, with — of the 20+ respondents — the average coming out to -9.5 percentage points, and the median working out

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McDonald's Corp (MCD)
Mark Kalinowski

MCD: McDonald’s Franchisee Survey Leads to Updated Estimates

McDonald’s plans to release its Q2 earnings before the market open on Wednesday, July 28th. For Q2E, we retain our existing McDonald’s U.S. same-store sales forecast of +24.3%. According to Consensus Metrix data, sell-side consensus has drifted upward in recent days to +24.0% — nearly coming to equal the Q2E projection we went to this past April 22nd. However, with this note we do raise our Q2E same-store sales forecasts for McDonald’s International Operated Markets

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Restaurant Industry
Mark Kalinowski

Restaurants: BlackBox Index a Little Stronger in June 2021

Earlier today (Thursday, July 15th), we learned that the BlackBox Index of same-store sales for June 2021 — importantly, these data points are on a two-year basis — was up by +6.6%, with two-year traffic off by -4.2%. This +6.6% figure is about +120 basis points sequentially better than the +5.4% two-year number from May 2021. Since the June 2020 BlackBox Index was down by -18.7%, the two-year figure for June 2021 of +6.6% implies

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