It was a difficult start for this year for restaurant chains. People return to spending due to unconfirmed economic conditions, and restaurants are no longer able to simply rely on high prices to increase their higher lines anymore. The last quarter of 2024 has already shown weakness, and things may deteriorate more in the coming months. It may eventually depend on how definitions affect customers and companies.
Some major restaurant chains, including McDonald’s (NYSE: MCD) and Mexican Chipotle grill (NYSE: CMG)It expects stronger numbers over the year. But this is not in any way. Here is the reason that they may be wrong, and why investors might want to be careful when looking at the purchase Restaurant stock now.
For investors, the large number of monitoring when it comes to restaurant shares is not necessarily sales but Similar sales growthWhich tells you how successful work is in organic growth. The similar number excludes the effect of holes and closing new stores, providing more comparison of apples to the voltage.
This is a problem. Over the past three months of 2024, the McDonald’s store sales have increased by 0.4 % worldwide. In the United States, they were under 1.4 %. Chipotle, which is smaller in size but is known for being a summit Growth5.4 % similar sales have been reported during the same time frame. This is better than McDonald’s, but a year ago, this growth rate was 8.4 %.
Despite the related numbers, both McDonald’s and Chipotle expect things to improve with the progress of the year. Ian Barden, McDonald’s financial manager, says the company expects “the gradual installation of the overall economy and the consumer environment.” Chipotle also expects to improve things in the second half, when it rises with comparative numbers weaker than the previous year. None of the company seems to be preparing for a large economic slow.
Nobody wants to predict the worst, but the truth is that commercial wars and worsening economic conditions can have a devastating impact on both sales and profits for restaurants. Although these chains may provide discounts to attract customers, another alternative may simply include eating at home.
Costco in bulk She recently reported her profits, and has noticed a change in consumer customs – they spend more on food at home, which can include things like pre -packed food and frozen meals. The administration believes that people are simply more careful as they spend their money.
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