Tuesday, March 9, 2021

Ten months ago, Calcbench introduced Restaurant Week — a series of posts exploring how firms in the restaurant business were faring, given the brutal disruption of the pandemic.

Now that most of the world has weathered one full year of COVID-19, we decided to revisit the restaurant industry again and see how those firms are doing.

To start, we looked up all firms identified as “Retail Eating Places,” otherwise known as the SIC 5812 filing category. We found 113 firms, and 30 of them have already filed their 2020 annual reports. Then we compared both yearly results (2019 against 2020) and recent quarterly numbers (Q3 2020 against Q4 2020).

At the annual level, the results are not good. Most firms saw both revenue and net income for 2020 well below 2019 levels. For example, Aramark ($ARMK) saw annual revenue drop 20.9 percent, while net income went from $448.5 million in 2019 to a $461.4 loss for 2020. McDonald’s ($MCD) saw its revenue drop by 8.9 percent, net income by 21.5 percent.

Not all the news is grim, however. Many restaurant firms seem to have found their footing in the second half of 2020 as we all grew accustomed to new eating habits under the pandemic.

For example, Ruth’s Hospitality Group ($RUTH) saw its annual revenue plunge 40.7 percent compared to 2019 — but revenues in Q4 2020 were 22 percent higher than those in Q3. Net income also went from a $5.3 million loss in Q3 to a $1.4 million profit. Yes, that’s still only a fraction of the $14.5 million net income Ruth’s enjoyed in fourth-quarter 2019, but small profit is better than no profit.

Likewise, Jack in the Box ($JACK) net income fell by 4.95 percent from 2019 to 2020; but it rose 34.4 percent from Q3 2020 to Q4 2020.

And not all firms had a bad 2020. Apparently we ate many pizzas during lockdown; annual revenue for Papa Johns ($PZZA) actually increased in 2020 by 12 percent, and net income soared from $4.8 million in 2019 to $57.9 million last year. Chipotle Mexican Grille ($CMG) also saw annual revenue increase by 7.13 percent, net income by 1.6 percent.

Attached is the spreadsheet we used to conduct the analysis. Download and use it to find your own slice of analysis.


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