4Th Quarter 2015 SSS
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Restaurant Industry Commentary & 4th Quarter 2015 SSS What’s Inside This Commentary Family Dining: The family dining segment posted an average Same-Store Sales Discussion and Analysis 1 YOY same-store sales growth of 1.4% for Q4 2015. According to Knapp-Track, family dining guest counts were down 2.6%, Same-Store Sales Data 2 3.0% and 3.5% in October, November and December, Fast-Casual Pizza Industry Update & Outlook 4 respectively, which raises some concerns about the financial well-being of the family dining customer base. Don’t Overlook the Latest Technology Developments 5 Published: April 2016 Fast-Casual: While the trend remains positive, same-store sales growth in the fast-casual segment appears to be cooling down modestly. In Q4 2015, the average increase was 1.2% Same-Store Sales Discussion and Analysis YOY, which is the 25th consecutive quarter of positive comps. During the fourth quarter of 2015 (“Q4 2015”), the restaurant Most notably, Chipotle experienced a decline of 14.6% for the industry maintained positive momentum and now has 23 quarter as a result of the company’s food safety crisis and consecutive quarters of same-store sales growth. 69.9% of the temporary store closures. concepts we cover enjoyed positive same-store sales growth QSR: In the QSR segment, 21 of the 24 concepts we track in Q4 2015, with an average year-over-year (“YOY”) growth of 1.1% for the restaurant industry, which is roughly in line with showed positive same-store sales growth during Q4 2015, with U.S. GDP growth of 1.0%. Concepts are now fighting for the segment up an average of 3.1% YOY. Domino’s and market share since the overall pie is not growing, and the Starbucks continue to achieve best-in-class results with YOY same-store sales data on the following pages shows the same-store sales growth in Q4 2015 of 10.7% and 9.0%, winners and/or losers that are beginning to emerge in each respectively. segment. Cumulative Same-Store Sales Change by Segment 30.0% Fine Dining: The fine dining segment saw an average same- 20.0% store sales decrease of 0.4% YOY for Q4 2015, which is the first negative quarter to end a streak of 23 consecutive quarters of 10.0% positive growth. As the chart to the right illustrates, fine dining 0.0% sales have yet to fully return to pre-recession levels and -10.0% remains 2.4% below 2008 sales. Ruth’s Chris led the segment -20.0% with a positive 3.2% same-store sales increase in Q4 2015. -30.0% 2008 2009 2010 2011 2012 2013 2014 2015 Casual Dining: Average same-store sales in the casual dining Fine Dining Casual Dining Family Dining Fast Casual segment declined 0.5% YOY for Q4 2015. In fact, nearly half of QSR the concepts experienced negative growth for the quarter. Source: Restaurant Research LLC, Capital IQ, Technomic and According to Knapp-Track, casual dining guest counts were company filings down 2.9%, 1.9% and 1.6% in October, November and December, respectively. That amounts to negative guest Until the last couple of quarters, the restaurant industry was counts in 73 of the last 84 months, which indicates just how trending positively and outperforming the market during the challenging the last seven years have been for this segment. economic recovery. Now the industry appears to be mirroring Increasing prices to offset traffic declines is not a sustainable the U.S. economy, with anemic growth and signs of long-term solution relative to the more positive developments unsustainable vulnerabilities. The battle for market share will in the fast-casual and QSR segments. With that said, of the 26 only intensify in this environment, so operators need to focus concepts we track in the casual dining segment, there are a on product differentiation and value to stay ahead of the few concepts that are continuing to outperform, including competition. Dave & Buster's, LongHorn Steakhouse, Taco Cabana and Texas Roadhouse. Contributing Editor Michael Collins is an Associate for Trinity Capital. Page | 1 Restaurant Industry Commentary and 4th Quarter 2015 SSS Same-Store Sales ("SSS") Data FY 2013 FY 2014 FY 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Fine Dining Fleming's 5.4% 2.0% 4.2% 4.9% 1.7% 3.6% 4.8% 3.4% 3.0% 3.2% (0.6%) (0.3%) Ruth's Chris 6.6% 4.6% 4.2% 5.5% 2.6% 2.8% 4.8% 5.0% 2.8% 4.2% 3.3% 3.2% Capital Grille 3.0% 4.5% 3.2% 6.7% 0.1% 0.8% 3.9% 5.0% 6.1% 4.4% 7.2% 1.5% Del Frisco's 1.9% 5.9% 4.4% 5.2% 5.1% 5.2% 8.4% 4.9% 2.3% 1.0% (1.4%) (4.5%) Sullivan's (4.0%) (2.7%) (5.9%) (0.7%) (2.1%) 0.9% 0.6% 1.7% 4.8% (3.0%) 1.2% (1.8%) Mean 2.6% 2.9% 2.0% 4.3% 1.5% 2.7% 4.5% 4.0% 3.8% 2.0% 1.9% (0.4%) Casual Dining Applebee's (1.3%) 1.3% (0.4%) (0.3%) (0.5%) 0.6% 1.7% 2.8% 2.9% 1.0% (0.5%) (2.5%) Bahama Breeze (0.3%) (1.7%) 2.7% 6.2% 0.8% 4.1% N/A (0.6%) 3.2% 1.8% 1.8% 2.4% BJ's Restaurants (0.4%) 0.0% (2.2%) (2.7%) (2.9%) (1.7%) 0.3% 1.2% 3.2% 0.5% 2.3% 0.7% Bonefish 0.5% 0.2% (2.7%) 0.9% (1.5%) 0.3% 2.6% 0.7% 0.9% (4.6%) (6.1%) (5.4%) Bravo! Cucina Italiana (1.6%) (1.6%) (3.7%) (1.3%) (5.5%) (6.0%) (6.7%) (3.9%) (1.7%) (2.1%) (3.1%) (5.2%) Brick House Tavern + Tap N/A N/A 4.0% 6.6% 10.0% 8.5% 7.5% 5.7% 5.4% 2.8% (0.7%) (2.8%) Brio Tuscan Grille (3.2%) (4.0%) (5.1%) (1.5%) (4.4%) (4.5%) (5.2%) (4.2%) (1.0%) (1.6%) (3.8%) (4.3%) Buffalo Wild Wings 1.9% 4.0% 4.3% 4.0% 5.7% 7.0% 5.8% 5.5% 6.5% 3.3% 2.6% 1.0% Carrabba's Italian Grill (1.7%) 0.3% 0.0% 0.9% (1.8%) (1.2%) (1.2%) 0.3% 1.9% 0.9% (2.0%) (4.0%) Cheesecake Factory 1.6% 0.9% 1.0% 1.1% 1.2% 1.5% 2.1% 1.4% 4.2% 2.8% 2.2% 1.1% Chili's Grill & Bar (1.1%) (0.6%) (1.9%) 0.2% 0.5% 2.5% 2.3% 4.2% 2.2% 0.1% (1.1%) (2.1%) Chuy's N/A N/A 3.1% 3.0% 4.2% 2.4% 3.0% 3.8% 1.9% N/A 4.2% 3.2% Dave & Buster's 1.8% (0.9%) (0.9%) 2.4% 0.7% 4.7% 8.7% 10.5% 9.9% 11.0% 8.8% 6.0% Famous Dave's (1.8%) 3.8% (2.3%) (1.1%) (3.3%) (2.8%) (2.3%) (4.0%) (4.9%) (9.2%) (9.8%) (10.6%) Granite City 2.7% 2.5% 0.4% 0.6% N/A N/A 0.7% 0.6% 2.7% 2.1% (3.8%) 0.6% Joe's Crab Shack (2.0%) 0.7% 3.3% 1.9% (6.0%) (4.7%) (4.4%) (4.5%) (3.8%) (4.0%) (6.6%) (2.9%) Kona Grill (2.6%) 2.5% 2.6% 3.5% 6.2% 3.2% 2.7% 3.1% 2.2% 1.0% 1.6% 3.2% Logan's Roadhouse (1.4%) (3.9%) (3.9%) (5.3%) (3.2%) (4.5%) (2.6%) 0.1% (4.3%) (3.8%) (4.3%) N/A LongHorn Steakhouse (1.6%) 3.5% 3.2% 2.9% 0.3% 2.4% 2.8% 2.6% 5.4% 5.2% 4.4% 2.6% Maggiano's 0.4% 0.2% 0.6% 0.9% 0.2% 0.9% 0.6% 2.3% 0.1% (0.1%) (1.7%) (1.8%) Olive Garden (4.1%) 1.1% (4.0%) (0.6%) (5.4%) (4.2%) (1.3%) 2.2% 2.2% 3.4% 2.7% 2.8% Outback 2.5% 2.8% (0.3%) 1.1% 0.8% 0.9% 4.8% 6.4% 5.0% 4.0% 0.1% (2.2%) Red Robin 1.4% 3.6% 5.4% 3.7% 5.8% 1.6% 1.4% 4.3% 3.8% 3.6% 3.7% (1.6%) Ruby Tuesday (2.8%) (3.1%) (11.4%) (7.8%) (1.9%) 0.4% 1.1% (1.0%) (0.3%) (1.7%) 0.6% 0.8% Taco Cabana 2.0% 1.1% 1.8% (2.9%) 0.8% 2.8% 3.5% 6.1% 3.8% 5.6% 4.8% 3.3% Texas Roadhouse 3.7% 4.7% 2.9% 2.5% 3.0% 3.0% 5.8% 6.8% 8.7% 8.0% 7.0% 4.4% Mean (0.3%) 0.7% (0.1%) 0.7% 0.2% 0.7% 1.3% 2.0% 2.3% 1.2% 0.1% (0.5%) Family Dining Bob Evans 0.0% (0.6%) (1.9%) (1.8%) (4.1%) (2.0%) 0.0% 3.8% 2.1% (0.3%) (3.2%) (3.6%) Chuck E Cheese N/A N/A (2.1%) N/A N/A N/A N/A (1.4%) (5.0%) 3.0% 0.7% 1.3% Cracker Barrel 3.1% 3.1% 2.8% (0.6%) (0.7%) 1.3% 3.3% 7.9% 5.2% 3.8% 2.5% 0.6% Denny's (0.7%) 0.6% 1.2% 0.9% 1.8% 1.9% 2.4% 4.7% 7.2% 7.3% 6.1% 2.9% IHOP (0.5%) 1.9% 3.6% 4.5% 3.9% 3.2% 2.4% 6.1% 4.8% 6.2% 5.8% 1.4% Luby's (0.1%) (0.1%) 1.0% 2.4% 1.2% 2.0% 0.4% 0.2% 3.1% (1.0%) 0.2% 1.2% Peter Piper Pizza N/A N/A N/A N/A N/A N/A N/A 3.4% 6.8% 5.3% N/A 3.6% Steak n Shake 1.3% 0.3% 4.2% 2.2% 3.0% 3.7% 2.6% 2.9% 6.0% 4.8% 3.0% 3.6% Mean 0.5% 0.9% 1.3% 1.3% 0.9% 1.7% 1.9% 3.5% 3.8% 3.6% 2.2% 1.4% Page | 2 Restaurant Industry Commentary and 4th Quarter 2015 SSS SSS Data (Cont'd) FY 2013 FY 2014 FY 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Fast Casual Chipotle 1.0% 5.5% 6.2% 9.3% 13.4% 17.3% 19.8% 16.1% 10.4% 4.3% 2.6% (14.6%) Cosi (4.5%) (2.7%) (3.6%) (4.6%) (9.5%) (4.7%) (1.9%) 4.2% 4.4% 2.1% (0.3%) 0.7% El Pollo Loco N/A N/A 3.7% 6.5% 7.2% 5.5% 7.9% 7.6% 3.5% 1.3% 0.0% 1.8% Fuddrucker's N/A N/A (0.4%) (2.3%) (2.7%) (3.9%) (4.6%) 0.2% 2.1% 0.2% 1.7% 1.3% Noodles & Company 2.2% 4.7% 2.1% 3.9% (1.6%) 0.2% 1.7% 1.3% 0.9% 0.1% (0.9%) (1.1%) Panera Bread 3.3% 3.7% 1.3% 1.1% 0.1% 0.1% 1.4% 3.0% 0.7% 1.8% 2.8% 2.3% Pie Five N/A N/A N/A N/A 4.4% 12.9% 17.0% 16.9% 9.5% 6.7% 1.5% (1.6%) Potbelly N/A N/A 2.5% 0.7% (2.2%) (1.6%) 0.5% 3.7% 5.4% 4.9% 3.7% 3.7% Qdoba Mexican Grill (1.5%) 1.3% 2.0% 2.3% 7.0% 7.5% 7.7% 14.0% 8.3% 7.7% 6.6% 1.5% Shake Shack N/A N/A N/A N/A N/A N/A N/A 7.2% 11.7% 12.9% 17.1% 11.0% Zoe's Kitchen N/A N/A N/A N/A 5.7% 7.5% 5.9% 7.8% N/A 5.6% 4.5% 7.7% Mean 0.1% 2.5% 1.7% 2.1% 2.2% 4.1% 5.5% 7.5% 5.7% 4.3% 3.6% 1.2% QSR Chicken Bojangles N/A N/A N/A N/A N/A 4.2% 5.3% 7.0% 7.9% 4.4% 4.1% 0.6% Church's (2.0%) 1.8% 1.2% 0.9% (0.7%) 0.3% 1.7% 3.6% 2.8% (2.6%) (4.8%) (4.6%) KFC 4.5% 3.0% (4.0%) (5.0%) (3.0%) (2.0%) 2.0% 6.0% 7.0% 3.0% 0.0% 3.0% Pollo Tropical 3.8% 6.4% 6.5% 7.0% 6.3% 6.7% 5.9% 7.7% 6.4% 4.3% 4.2% 0.4% Popeye's 0.5% 4.3% 5.1% 0.3% 4.3% 3.8% 7.2% 10.7% 7.0% 7.9% 5.6% 2.0% Mean 1.7% 3.9% 2.2% 0.8% 1.7% 2.6% 4.4% 7.0% 6.2% 3.4% 1.8% 0.3% Coffee/Snack Baskin Robbins (4.4%) 1.6% 4.2% 2.2% 0.5% 4.2% 5.8% 9.3% 8.0% 3.4% 7.5% 4.4% Dunkin Donuts 1.7% 4.0% 4.2% 3.5% 1.2% 1.8% 2.0% 1.4% 2.7% 2.9% 1.1% 1.8% Jamba Juice 1.3% 1.7% (3.4%) 0.3% 0.6% 2.5% 3.7% 4.9% 5.0% (5.9%) 6.6% 3.9% Krispy Kreme 11.4% 10.0% 3.7% 1.6% 3.3% 2.3% 3.7% 3.6% 5.2% 5.5% 3.4% 1.6% Starbucks 7.0% 9.0% 8.0% 5.0% 6.0% 6.0% 5.0% 5.0% 7.0% 8.0% 9.0% 9.0% Tim Horton's (0.5%) 1.4% 3.0% 3.1% 1.9% 5.9% 6.8% 4.1% 8.9% 7.0% 4.3% 6.3% Mean 2.8% 4.6% 3.3% 2.6% 2.3% 3.8% 4.5% 4.7% 6.1% 3.5% 5.3% 4.5% M exican Del Taco N/A N/A N/A N/A N/A N/A N/A N/A 7.7% 6.0%