Several restaurant companies have reported earnings over the last few days, and the commentary about trends in April is much better than I would have expected. The only company talking about a tough April is PZZA, with TXRH and SHAK talking about April momentum. SG left SSS guidance unchanged, but that will likely be revised lower next quarter. Only three industry segments achieved positive year-over-year sales/traffic, fine dining, upscale casual, and fast-casual. QSR looks to be struggling the most in the current environment.
Westrock Coffee IPO Preview (RVAC)
We host a pre-IPO preview of Westrock Coffee on Tuesday at 12:30 PM ET.
Westrock Coffee Holdings goes public through a SPAC merger with Riverview Acquisition Corporation (RVAC). Coffee is a secularly growing category both domestically and internationally. It is also a large, fragmented $318B TAM. Coffee consumption is one of the few consumer habits that accelerated during the pandemic and grew as COVID-19's impact ebbed. Coffee companies have been among the few to have successful IPOs still trading above the IPO price over the past two years. Westrock Coffee will seek to repeat that success when it de-SPACs in Q3. Our preview will conduct a deep dive into the company's history, management's background, the business model, drivers of revenue and margins, its opportunity set, and its valuation framework.
DASH (SHORT)
There was nothing new/incremental on the call and continuous chatter about how big the TAM is!
The company said it invested aggressively in 1Q22, which helped drive growth in new categories and international markets well above company growth on a Y/Y and Q/Q basis - monthly active users are at all-time highs, DashPass members are at all-time highs, and order frequency is at all-time highs. Those metrics may speak to the resilience of the platform but also the need for continued investment. Spending will need to continue/accelerate to hit the current GOV guidance. Between April and Labor Day, or the summer season, when the weather is nicer, people go out for lunch and dinner more often and use delivery less. Given the incremental inflation causing a potential slowdown, will that have an outsized impact this summer?
DoorDash reported 1Q22 adjusted EBITDA $54M vs FactSet $39.9M, an EBITDA loss of ($117). Versus an EBITDA loss of ($108) million in 4Q21. 1Q22 Revenue $1.46B vs FactSet $1.38B and Marketplace GOV $12.35B vs year-ago $9.91B. Q2 Guidance of (A) EBITDA $0-100M vs FactSet $81.7M and Marketplace GOV between $12.1B-12.5B. FY Guidance (Dec 2022): Maintains adjusted EBITDA $0-500M vs FactSet $293.0M, and Marketplace GOV $49.0B-51.0B vs prior guidance $48.0B-50.0B
SG (SHORT)
SG held the line on guidance, which might haunt them in 2H22.
SG reported 1Q22 (A)EBITDA ($16.5M) vs FactSet ($18.4M), with revenue above and comps +35% beating FactSet +31.7%. Stock-based comp was $22MM in the quarter, making the EBITDA loss of ($38 million) versus a loss of ($36 million) in 4Q21. Food and beverage margin (170bps) lower than expected. Opened eight net new restaurants versus one net new restaurant in the prior-year Reaffirmed FY22 revenue $515-535M vs FactSet $530.5M and adjusted EBITDA ($40M)-($33M) vs FactSet ($37.5M); expects at least 35 net new restaurant openings, same-store sales change of 20%-26%, and restaurant-level profit margin between 16%-17%.
