Red Robin: With Uncle Sam’s help, ready to resume the Donatos rollout
The combination of a $49.4 million tax refund and a sales rebound to 85.1% of a typical unit’s pre-COVID intake has led Red Robin Gourmet Burgers to re-start the addition of Donatos pizza to its menu. The unusual co-branding initiative—offering the signature product of another restaurant chain as a new core menu item—was expanded to 31 units in the Seattle area, Red Robin said in releasing its financial results for the third quarter ended Oct. 4.
“We virtually trained our teams to prepare Donatos products and placed already purchased equipment in 31 locations in the Pacific Northwest,” said Red Robin CEO Paul Murphy.
With those additions, 79 Red Robin restaurants are now featuring the second brand. The addition typically raises a unit’s sales by 600 to 700 basis points, according to Murphy. He anticipates rolling Donatos pies into another 100 Red Robin units in 2021.
Executives said the company qualified for the $49.4 million federal tax refund under a provision of the CARES Act, the federal government’s initial relief package, that extends a carryback provision for net losses. They added that Red Robin will seek a $12 million to $18 million deferral of payroll taxes until late 2021 and 2022, as provided under an emergency measure that President Trump extended to businesses through executive order.
Same-store sales sequentially improved to a -14.9% for the month ended Oct. 4. Company restaurants with at least a portion of their dining rooms open saw the gap from last year’s mark narrow to 9.5% for the month.
Six restaurants were permanently closed during Q3, leaving the chain with 547 units in operation on Oct. 4.
Overall, Red Robin lost $24.6 million for the quarter, compared with a year-ago loss of $5.2 million. Revenues dropped 31.9%, to $200.5 million.
J.Alexander’s: Customers now charged for packaging as sales near pre-pandemic levels
The operator of a namesake polished-casual brand revealed that it has started charging takeout and delivery customers a packaging fee after switching to new to-go containers in October. The new packaging is reusable and recyclable, the company said in announcing results for the third quarter ended Sept. 27.
Sales for the J. Alexander’s brand rose on a per-unit basis in September to just below 90% of year-ago levels before comps slipped 11.4% in October, the company said. Comparable sales for the operator’s secondary concept, Stoney River Steakhouse and Grill, fell for September and October by 10.4% and 10.3%, respectively.
“We estimate that approximately 60% of our seats are available for dining room guests and are cautiously optimistic that this figure will continue to increase as select additional states and municipalities relax existing restrictions,” CEO Mark Parkey said in a statement. The company is also attempting to boost sales through the rollout of Family Packs, or to-go meals apportioned to feed a family.
Overall for Q3, the company posted a net loss of $1.8 million, compared with a year-ago profit of $770,000, on revenues of $46.2 million, down 18.7%.
Cracker Barrel: Comps down 16.4%, $5 million spent to defeat Biglari
Restaurant sales at Cracker Barrel Old Country Stores rose during the first quarter ended Oct. 30 to within 16.4% of year-ago levels, according to preliminary results released Thursday. The family restaurant operator projected that net income for the quarter would total between $167 million and $172 million, compared with a year-ago net profit of $43.2 million.
The profit figure excludes the $5 million cost of fending off an attempt by dissident shareholder and Steak ‘n’ Shake CEO Sardar Biglari to gain a seat on Cracker Barrel’s board for an associate, and the $218 million that was generated by a sales-leaseback deal that closed in August. Biglari had called for the election of Raymond Barbrick, co-CEO of The Briad Group, a Wendy’s franchisee.
Revenue figures were not disclosed.
Chuy’s: No more free chips and salsa
The 92-unit casual Tex-Mex chain said itsignificantly reduced food costs during the third quarter ended Sept. 27 by discontinuing a signature feature, a complimentary serving of chips and salsa known as the Nacho Car, and offering a menu that was streamlined for efficiency and simplicity during the pandemic.
Same-store sales for the whole 13-week period fell 19.8%, with a 7.7% rise in menu prices tempering a 27.5% drop in weekly customer counts. Management reported that the sales gap from year-ago levels narrowed to 13.8% in September and 14.2% in October, with average weekly sales per unit hitting $68,464 at the end of the quarter.
Off-premise sales continued to generate between 30% and 35% of total company revenues in the first few days of November.
One Group Hospitality: Almost back to 2019 levels
The parent of the Kona Grill and STK polished-casual chains revealed that same-store sales for September rebounded to 95.7% of the year-ago level, led by a strong resurgence from Kona, whose comps for the month were down just 2.3%.
September same-store sales for STK were not as robust, rising to within 89.6% of the year-ago level. But management noted that weekly sales for that brand are still exceeding $215,000, the annual equivalent of $11.2 million. Thirty-four of the company’s 36 restaurants are currently offering some level of dine-in service.
The company posted a net loss for the third quarter of $910,000, compared with a net profit in the year-ago period of $469,000. Revenues rose 79%, to $39.6 million.
Marriott: Domestic occupancies rise to 37%
A rise in pleasure trips by car helped Marriott International increase the occupancy rates of its hotels in North America to 37% for the third quarter, or roughly double the rate for the second quarter.
Revenue per available room (REVpar), a key metric in the lodging business, also improved for the lodging giant, but the prevailing level for North America properties still fell 65.4% below the level of the year-ago quarter.
Management noted that domestic business travel is inching upward, but not as quickly as leisure travel.
Overall, the hotel operator and franchisor posted a net income for Q3 of $100 million, down 34.8% from the year-ago quarter, on revenues of $2.25 billion, down 57.3%.
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