4. Look who’s outpacing the pack
The Chicago Cubs could have been the inspiration. Or maybe everything is topsy-turvy in the exasperating current environment. Whatever the reason, yesterday’s goats lay claim this week to being the industry’s outstanding financial performers, and they’re showing no mercy in strutting that distinction.
Olive Garden was the butt of stand-up comedy routines two years ago, when investors blamed the chain’s lackluster financial performance on such damnable practices as giving away too many breadsticks and not salting its pasta water. Now the Italian chain is capo dei capi again, outpacing most of casual dining, albeit with a 2% same-restaurant sales gain for the most recent quarter.
And the rest of its Darden Restaurants family is similarly faring well, with all five of the smaller brands posting positive comps. In the context of today’s casual-dining market, the group is the X-Men squad, squaring off against the gang from Peanuts.
Darden CEO Gene Lee raised some eyebrows when he observed to analysts that more shutdowns in the sector would be a welcomed break. He spoke after this week’s rash of bankruptcies, noting, “We could use some inventory to come out. That would be helpful.”
The other stunning performance was turned in by KFC’s U.S. operations, which hadn’t been a frontrunner since Colonel Sanders’ white suits were in style. Yum Brands’ chicken chain posted a 6% domestic same-store sales gain for the quarter ended Sept. 3, a period in which many quick-service brands yelped loudly about the difficulties of the times.