Fast Food Trends Favor Drive Thru Service

Fast food trends are turning toward speedier drive-through services and away from eat-in-only casual restaurants. Image: Dean Hochman, Flickr

If fourth quarter earnings from Yum! Brands Inc. (YUM), McDonald’s Corp. (MCD) and Buffalo Wild Wings Inc. (BWLD) are any indication, fast food trends are turning toward speedier drive-through services and away from eat-in-only casual restaurants.

Also read, McDonald’s is catching up to other fast food chains with mobile pay.

Comparable sales for McDonald’s and Yum! Brands’ Taco Bell and KFC chains increased from the same quarter a year prior while Buffalo Wild Wings and Pizza Hut suffered declines.

McDonald’s Corp. (MCD) recently reported comparable store sales rose 2.7 percent in the fourth quarter, although U.S. same-store sales declined by 1.3 percent. For the full 2016 fiscal year, McDonald’s saw same-store sale increase 3.8 percent with every segment posting gains.

Yum! Brands posted mixed fourth quarter results Thursday, with adjusted earnings of 79 cents per share topping the FactSet analyst estimate of 73 cents per share. Revenue of $2.02 billion fell short of Wall Street’s target of $2.04 billion.

Both Taco Bell and KFC noted sales increases and proved consumer draws this quarter while ailing Pizza Hut, which does not traditionally offer drive-through services, continued to struggle with a 2% decline in global same-store sales.

Earlier in the week, casual restaurant Buffalo Wild Wings’ disappointing results, released Feb. 7, sent shares tumbling more than 5%, although they’ve since recovered. The Minneapolis-based chicken wing chain’s same-store sales fell 4 percent in the fourth quarter from a year prior. Total revenue increased only 0.8% to $494.2 million, boosted in part by 31 restaurant openings but well off the FactSet estimate of $514.3 million.

In upcoming fast food earnings this quarter, Del Taco Restaurants Inc. (TACO) reports earnings on Feb. 13, Wendy’s Co. (WEN) reports Feb. 16, Jack In The Box Inc. (JACK) and Domino’s Pizza Inc. (DPZ) both report Feb. 23 and Shake Shack Inc. (SHAK) on March 6.

SOURCE Rebecca McClay, Investopedia