Financial roundup: Olo, US Foods, Ark Restaurants, newcomer Pinstripes, Chuy's

This earnings season brought the addition of newly public food-and-games concept Pinstripes. Here in brief are how it and several other public companies fared during the latter part of 2023.
Olo's newest customer. | Photo: Shutterstock

Waffle House's launch of online ordering is good news for Olo

Online ordering supplier Olo added a big new customer, the 2,000-unit Waffle House, which will use Olo to offer online ordering and payment for the first time.

Olo also salvaged some of its relationship with Wingstop, which said in November that it was leaving in favor of an in-house ordering system. Olo execs said Wednesday that the 1,800-unit chicken chain will continue to use Olo to integrate with an AI phone-answering product. 

The New York-based Olo outdid its growth expectations in the fourth quarter, generating total revenues of $63 million, an increase of 27% year over year.

US Foods sees increased demand from independents

Broadline distributor US Foods shipped 5.6% more cases of supplies to foodservice customers during the fourth quarter ended Dec. 30 than it did a year ago, with much of the growth coming from independent restaurants, the company reported.

The 7.3% increase in supplies for independents reflected both an increase in order size and the addition of more clients, the company said.

The company noted that it is continuing to expand its alternate ways of getting product to operators. Its Pronto small-truck delivery service will add five markets this year to the 35 it currently serves, according to executives. After posting earnings, US foods also announced that it will open five more Chef’Store cash-and-carry retail outlets, which would raise the tally to 90.

Overall, the distributor posted a net income for Q4 of $147 million, a 58% increase from the prior-year period, on revenues of $8.94 billion, up 4.9%.

Indy operator Ark feels the economic pain of its markets

Net income for Ark Restaurants fell 21% to $1.6 million for the first quarter ended Dec. 30, largely as a result of issues outside the four walls of the multiconcept operators’ 33 restaurants, according to management.

”Our biggest problems as a company have nothing to do with customer experience,” said CEO Michael Weinstein. “We have no problems with the way our restaurants are functioning.”

Rather, he explained during the company’s quarterly call with financial analysts, revenues have been dampened by economic conditions in two of Ark’s key markets.

With raging inflation, customers of the company’s Florida restaurants are either curbing their visits or sharing entrees, Weinstein said. The volumes of four key revenue-drivers for Ark in that state are down 10%.

“Florida restaurants are our biggest problem right now,” Weinstein said, referring to several of Ark’s 16 full-service places.

Meanwhile, the company’s cavernous restaurants in Washington, D.C. are hurting because the city itself is hurting, he added. Operators of full-service restaurants there say business has dropped precipitously because government workers have yet to return in full force to their downtown offices. Plus, the tip credit has dropped twice, prompting many places to raise their prices or add full-check surcharges to offset the resulting higher labor costs.

Weinstein noted that Ark is awaiting government action on two key matters for the company.

New Jersey officials have yet to grant a casino license to the Meadowlands Racetrack, in which Ark holds a minority interest.

In addition, the lease for the company’s 1,000-seat Bryant Park Grill & Cafe in New  York City is set to expire in May 2025. Ark has yet to hear if its lease for the restaurant, listed 50th on Restaurant Business’ ranking of independent restaurants by annual revenues, will be renewed. The establishment’s sales were estimated at $18.8 million.

Overall corporate revenue for Q1 totaled $47.5 million, essentially flat from the year-ago quarter.

Public-markets rookie Pinstripes Holdings posts same-store sales gain of 6.9%

In its first quarterly earnings report as a public company, eatertainment company Pinstripes Holdings posted a same-store sales increase of 6.9% for the third quarter ended Jan. 7.

Pricing accounted for about 2.5% of the comp gain, according to management.

Net income totaled $12.2 million, compared with a year-ago loss of $400,000, on revenues of $32.2 million, a 14.1% increase.

CEO and founder Dale Schwartz used Pinstripes’ inaugural conference call with financial analysts to introduce the concept and explain its business model to Wall Street. The company operates 16 large complexes where guests can bowl, play bocce, mingle over a cocktail or dine. About 77% of revenues come from the sale of food and beverage, with the remainder coming from fees for playing the outlets’ games.

Although the company is 17 years old, it did not become a public company until it merged in late December with Banyan Acquisition Corp., a special purpose acquisition corporation, or SPAC.

Pinstripes said the deal has provided $70 million to fuel expansion. Three more eatertainment complexes are scheduled to open during the next few months, according to the company. Management has projected that the Pinstripes brand can eventually grow to 150 U.S. locations.

Schwartz said the company is benefitting from the changes that are currently remaking the retail industry. As department or big-box stores become less effective as mall anchors, landlords are looking for new consumers draws. The CEO suggested that Pinstripes can make a strong argument for filling that role.

Chuy’s unit-level margins hit a10-year high

The Chuy’s casual Tex-Mex chain eked out a 0.3% gain in same-store sales for the fourth quarter of 2023, with a 3.4% increase in the average check offsetting a 3.1% slide in the average weekly count of transactions.

Restaurant-level profitability hit a 10-year high, rising from 17% in the year-ago quarter to 20% in the most recent period, according to CEO Steve Hislop.

Net income for Q4 increased 121.2%, to $5.5 million, on revenues of $116.3 million, up 11.8%.

The company opened one restaurant during the quarter.

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