Darden Earnings
This week's big event in the Restaurant space is Darden earnings on Thursday, September 19th. DRI will report 1Q24 earnings (this is a JUN JUL AUG quarter.)BMO on Thursday. It is always an excellent intra-quarter read on sales trends for the industry. There is also a Regional Bank Conference today with some casual dining companies on the calendar to speak, which might also give a look into intra quarter trends. The DRI has given Financial Outlook for Fiscal 2024:
- Total sales for fiscal 2024 are expected to be between $11.5 billion and $11.6 billion (up 10% YoY), driven by the inclusion of Ruth's Chris, same-restaurant sales growth of 2.5% to 3.5%, and approximately 50 gross new restaurant openings, including four relocations. Street is at $11.5 billion. Total inflation of approximately 3% to 4%, which includes commodities inflation of approximately 2.5%, driven primarily by beef and produce, while most other categories are flat to deflationary. And hourly labor inflation in the mid-single digits. Street is at EPS of $8.78, up 8.9% YoY
- 1Q24 Traffic for both Olive Garden (slightly negative by (1%)) and Long Horn was slightly positive by +1% and did not change much QoQ. But both concepts have seen slowing along with the industry in September, so forward guidance will be muted. The street will certainly not raise guidance, but it might be early in the year to lower guidance.
- Street is at 3.8% SSS for 1Q24 versus 4.0% in 4Q23 and 2.8% for 2Q24.
Flash grocery (ACI, CART)
According to Bloomberg Instacart now plans to price IPO on Today and begin trading Tuesday
From @Hedgeye_ Staples: Albertsons has launched its new Flash grocery service, which enables customers to receive their delivery or curbside orders in as little as 30 minutes. The service is available at more than 2,000 stores across its banners. Pricing for the orders will “mirror in-store pricing.” Flash pickup orders carry a $3.95 fee, while Flash delivery fee is $11.95. Members of Albertsons’ FreshPass subscription program will receive free Flash pickup and a discounted fee of $2 for flash delivery. The FreshPass program costs $99 annually and provides free delivery for orders over $30. Having similar pricing to the stores is a notable savings compared to Instacart. Food retailers reward customer loyalty online, but Instacart’s digital proposition appeals to customers who spend at different chains.
We hosted an Instacart pre-IPO Black Book last week; for the webcast replay CLICK HERE.
PLAY Insider Selling
On September 12, 2023, PLAY Director Michael Griffith sold 6,470. Griffith's role as a Director means his insider trading activities garner more attention, potentially offering potential insights into the company's trajectory and financial status. However, over the past year's insider activity at Dave & Buster's displays a more bullish sentiment, with 23 insider purchases but only three sales, including Griffith's recent transaction.
