Labor costs hurt most chains’ profits in Q1
This post is part of the On the Margin blog.
Labor costs are rising and sales are falling, and that’s hitting restaurant companies where it counts: The bottom line.
National Retail Concept Partners, a consulting firm out of Denver, analyzed publicly traded companies that reported earnings through May 5.
Of the 26 companies that reported, only three of them had flat or positive labor impacts: Darden Restaurants Inc., Yum Brands Inc., and Chipotle Mexican Grill Inc.
The latter chain enjoyed strong sales growth in the first quarter, coming off of a brutal 2016, and the resulting labor leverage generated 92