This is an English adaptation of a FoodBud historical article originally published on May 7, 2022.
FoodBud previously reviewed first-quarter results from China-listed restaurant-chain groups and related supply-chain companies. This article looks at the first-quarter performance of restaurant-chain groups listed in North America.
The contrast was stark in 2022: many restaurant chains in China were under pressure from COVID disruption, with profit declines and weaker same-store sales not limited to one or two brands. Starbucks China, for example, had seen net new-store openings decline for two consecutive quarters, while revenue had also fallen for two consecutive quarters.
FoodBud also compiled first-quarter data for 15 restaurant groups listed in North America, including McDonald's and Starbucks. All 15 reported year-on-year revenue growth in the quarter. Yum! Brands stood out for scale, with more than 50,000 restaurants globally. On net openings, only The Cheesecake Factory, a large-format operator, posted a negative number, ending the quarter with two fewer restaurants than at the end of the prior year.
Below is a closer look at 10 North American restaurant groups.
Yum China's core brands, KFC and Pizza Hut, are franchised from Yum! Brands. Yum China had already reported first-quarter revenue of $2.67 billion, about RMB17.6 billion, up 4% from $2.56 billion a year earlier. System sales fell 4%, with KFC down 4% and Pizza Hut down 1%. Same-store sales fell 8%, with KFC down 9% and Pizza Hut down 5%.
Yum China's adjusted operating profit was $193 million, about RMB1.28 billion, down 44% from $345 million a year earlier. Net profit was $100 million, down 57% from $230 million.
Yum! Brands' own first-quarter revenue was $1.55 billion, up 4% year on year, while net profit was $400 million, up 22%.
Across Yum! Brands, system sales rose 8% and same-store sales rose 3%. Excluding China, same-store sales at both KFC and Pizza Hut rose 10%, and the overall group rose 6%. Digital sales reached $6 billion, up 15%. The group opened 997 restaurants, added 628 net new units, and reached 54,052 restaurants globally.
Yum! Brands' portfolio includes KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
As of the end of March, KFC had 27,372 restaurants globally. In the first quarter, it opened 587 restaurants across 49 countries, and system sales reached $7.73 billion.
Among the 12 markets listed by the company, China was the largest, but it was also the only market that declined.
Taco Bell had reached 7,831 restaurants globally and opened 63 restaurants across 13 countries in the quarter. First-quarter system sales were $3.1 billion. U.S. system sales rose 7% year on year, while international system sales rose 37%.
Yum China also said in the first quarter that it planned to accelerate Taco Bell's development in China. Yum China targeted at least 100 Taco Bell restaurants in China by the end of 2022 and at least 225 by the end of 2025, with capital support from Yum! Brands. If those milestones were achieved, Yum China would receive a 50-year exclusive operating and sublicensing license for Taco Bell in China.
As of the end of March, Pizza Hut had 18,518 restaurants globally. In the first quarter, it opened 334 restaurants across 40 countries, and system sales reached $3.16 billion.
Pizza Hut's largest market remained the United States. Among its nine listed major markets, the United States and China declined in the first quarter.
Restaurant Brands International's portfolio includes Burger King, Tim Hortons, Popeyes and Firehouse Subs. As of March 31, Burger King had 19,266 restaurants, Tim Hortons had 5,320, Popeyes had 3,771, and Firehouse Subs had 1,219. Nearly 100% of the restaurants were franchised. Annual system sales exceeded $35 billion, the total restaurant base was above 29,000, and the group added 120 net new restaurants in the first quarter.
First-quarter system sales were $1.556 billion for Tim Hortons, $5.818 billion for Burger King, $1.383 billion for Popeyes, and $272 million for Firehouse Subs. Same-store sales rose 8.4% at Tim Hortons and 10.3% at Burger King, while Popeyes same-store sales fell 3%.
RBI's first-quarter revenue was $1.45 billion, up 15% year on year. Tim Hortons contributed $830 million, Burger King $440 million, Popeyes $150 million, and Firehouse Subs $31 million. Net profit was $270 million, roughly flat year on year.
For the fiscal third quarter ended February 27, Darden Restaurants reported revenue of $2.45 billion, up 41% year on year, and net profit of $250 million, up 92%.
Its two main brands, Olive Garden and LongHorn Steakhouse, generated revenue of $1.14 billion and $600 million, respectively. Olive Garden's same-store traffic rose 23.5%, while average check rose 5.2%. LongHorn Steakhouse's same-store traffic rose 24.6%, while average check rose 5.6%.
As of February 27, Darden had 1,855 restaurants, with only three net new openings.
Texas Roadhouse is a steakhouse chain. It previously opened a restaurant in Shanghai, but that location had closed by 2021. Under its China franchise arrangement, Texas Roadhouse held a 40% equity interest in the China franchisee, which at the time operated four restaurants under non-Texas Roadhouse brands.
For the first quarter ended March 29, Texas Roadhouse reported revenue of $990 million, up 23% year on year, and net profit of $75.2 million, up 17%.
Same-store sales rose 16%, driven by 7% traffic growth and 9% average-check growth.
As of March 29, Texas Roadhouse had 672 restaurants, including 576 company-operated units and 96 franchised units. It operated three brands: Texas Roadhouse, Bubba's 33 and Jaggers. Of the company-operated restaurants, 536 were Texas Roadhouse, 36 were Bubba's 33, and 4 were Jaggers. All 96 franchised restaurants were Texas Roadhouse units, including 63 in the United States and 33 in international markets.
Texas Roadhouse had signed franchise development agreements across nine markets, including mainland China, Taiwan, the Philippines, Mexico, South Korea, Brazil and Puerto Rico. As of March 29, 2022, it had 15 restaurants across five Middle Eastern countries, 5 in the Philippines, 5 in Taiwan, 4 in South Korea, 3 in Mexico and 1 in China.
In the first quarter, Texas Roadhouse opened three company-operated Texas Roadhouse restaurants and two franchised restaurants. It also acquired seven franchised restaurants. As of March 29, 11 restaurants were under construction. The company expected to open 25 company-operated Texas Roadhouse and Bubba's 33 restaurants in 2022, plus 7 franchised Texas Roadhouse restaurants, mainly in international markets.
In 2021, the average investment to open a Texas Roadhouse restaurant was $5.7 million. For 2022, the expected average investment was $6.4 million, mainly because of higher costs. The average investment to open a Bubba's 33 restaurant was $7.4 million in 2021, and the expected 2022 investment was $7.3 million.
As of March 29, Texas Roadhouse's average annual sales per restaurant were $1.745 million, while Bubba's 33 averaged $1.398 million.
For the first quarter ended March 27, Sweetgreen reported revenue of $100 million, up 67% year on year. Its net loss widened to $49.2 million.
In the quarter, Sweetgreen generated $43.93 million from owned digital channels, $34.44 million from in-store non-digital ordering, and $24.22 million from third-party delivery channels, including Caviar, DoorDash, Grubhub, Postmates and Uber Eats. Digital channels accounted for 66% of revenue, while owned digital channels accounted for 43%.
As of quarter-end, Sweetgreen had 158 restaurants after adding eight net new units in the first quarter. Same-store sales rose 35%. As of March 27, annualized sales per restaurant were $2.79 million.
For the first quarter ended March 26, chicken chain Wingstop reported revenue of $76.205 million, up 7.8% year on year. Net profit was $8.676 million, down 34%.
As of March 26, Wingstop had 1,791 restaurants, 98% of which were franchised. That included 1,754 franchised restaurants and 37 company-operated restaurants. The chain added 60 net new restaurants in the first quarter.
Wingstop's first-quarter system sales were $630 million. Company-operated restaurants contributed 3% of system sales. As of March 26, average annual unit volume in the United States was $1.6 million.
Papa Johns reported first-quarter revenue of $540 million, up 6% year on year. System sales reached $1.3 billion, up 5.3%. Net profit was $10.49 million, down 69%.
As of March 27, Papa Johns operated 5,524 restaurants across 49 countries and regions, including 608 company-operated restaurants and 4,916 franchised restaurants.
In the first quarter, Papa Johns added 62 net new restaurants. Rapid unit growth over the previous year contributed about half of its system-sales growth.
Shake Shack reported first-quarter revenue of $200 million, with system sales of $309 million, up 31% year on year. It recorded a net loss of $10.16 million, compared with net profit of $1.31 million a year earlier. Digital-channel sales fell 5.7% to $84.3 million, accounting for 43.1% of total revenue.
As of March 30, Shake Shack had 382 restaurants, including 225 company-operated units, 27 franchised units in the United States, and 130 franchised units in international markets.
In the first quarter, Shake Shack opened seven company-operated restaurants, two U.S. franchised restaurants and four international franchised restaurants. Of the four international openings, three were in China: Shanghai, Beijing and Nanjing.
Shake Shack was also preparing to enter Thailand, with a plan to open 15 restaurants over the following 10 years.
Bloomin' Brands' portfolio includes Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar, mainly in casual dining and premium dining. Outback Steakhouse had franchised restaurants in Hong Kong.
In the first quarter, Bloomin' Brands reported revenue of $1.14 billion, up 15.5% year on year. Net profit was $75.51 million, up 9.7%.
As of March 27, Bloomin' Brands had 1,166 company-operated restaurants and 333 franchised restaurants and delivery outlets. It added 25 net new units in the first quarter.
Fast-casual chain Portillo's reported first-quarter revenue of $130 million, up 14.5% year on year. Compared with a loss in the prior-year period, it turned slightly profitable, with net profit of $190,000.
As of March 27, Portillo's had 70 restaurants, after adding one net new restaurant in the first quarter. Its average annual unit volume was $8.3 million.
Note: forward-looking expansion targets, capital-support arrangements, equity holdings and investment figures above are historical figures from the 2022 source article.