The NEW CEO has a big Challenge
We have often said that many casual dining companies (restaurant companies in general) were over earnings coming out of the pandemic, and EAT confirms that thesis.
EAT reported SSS of 3.1% in FQ4 (FactSet +2.8%), consisting of a 0.3% for the Chili's (FactSet +1.2%) and Maggiano's +30.1% vs FactSet +18.8%. Restaurant margin of 10.3% declined 300bps versus consensus and 690 bps YoY. Operating margin came in at 4.4% vs. FactSet's 6.9% and year-ago 10%. "Chili's Company restaurant expenses, as a percentage of Company sales, increased primarily due to higher commodity costs, sales deleverage, advertising, utility expenses, rent expenses, and increased restaurant labor costs, including wage rates. Lower manager bonuses partially offset these increases."
Management is sees 2023 revenue of $3.9B to $4.0B vs. $4.0B consensus and 2023 EPS of $2.45 to $2.85 vs. $3.65 consensus. Notably, the company did not offer up FY2023 same-store sales guidance. The company's earnings power is back to where it was in FY2014. In FY2014, EAT reported EPS of $2.71 on $2.8B in revenues versus the current guidance of $3.9-$4.0B in revenues and $2.45 to $2.85 in EPS.
It's early days for the new CEO, but significant changes are needed to get the business back on track.
We would look to cover the short 50% lower or around $15.
DASH Voice Ordering
DoorDash is getting into voice ordering for its enterprise merchants using its white-label DoorDash Drive service. According to a job posting, "the critical service allows merchants to outsource taking orders over the phone, while also increasing order conversion rate and delivering a best in class consumer experience." The future product roadmap includes features like pay-by-text. In May, UberEats announced a similar service on Android that allows commands like "OK Google, order from Sweetgreen."
About the Role
As a Manager on the Voice Ordering team, you will play a critical role in building and scaling the #1 voice ordering solution. This critical service allows Merchants to outsource taking orders over the phone while also increasing order conversion rate and delivering a best-in-class consumer experience. The team has seen early success, and we're looking for a Manager to:
- Lead Merchant relationships from pitch to pilot to full store rollouts
- Set and maintain volume and quality goals that surpass Merchant expectations
- Partner with Product & Eng to shape the product roadmap to maximize the value proposition of the service to Merchants
- Rollout new product features (e.g., AI voice automation, pay-by-text, etc.) and measure the business impact
You are a first-principles thinker who is both a strategist and a builder. You'll help define the vision, own and scale this massive opportunity, and work with product, sales, operations, business development, finance, and other teams to make that vision a reality.
THE SBUX strategy is clear
The company sends employees the message: "if you unionize, you will lose your job."
SBUX has informed workers at two locations that their stores will be closing. Like in the past, the company blamed safety issues for the Kansas City location's closure, the location where results are still pending is being closed. But the union insists that some closures are more than safety, referring to a list with 19 Starbucks, and Eighteen of the closing locations have filed for or started to form unions. Last month, the Seattle-headquartered coffee giant announced that 16 locations across the United States, including California, would close by the end of July. These closures also come on the heels of Starbucks asking the National Labor Relations Board to suspend all mail-in ballot union elections nationwide. About 200 of Starbucks' roughly 9,000 locations in the U.S. have voted to unionize as of August 2022.
