Restaurants are rebounding — but Starbucks and McDonald's still have work to do

Core Insights - Starbucks is set to report its quarterly earnings, which is anticipated to signal improving demand for dining out in the restaurant sector [1][3] - Preliminary results from some restaurant chains indicate a positive trend in sales during the fourth quarter, boosting investor confidence [2][4] Industry Overview - The fourth quarter of 2024 showed better performance for restaurants compared to earlier in the year, with same-store sales growth in October and November, while December experienced a decline attributed to a late Thanksgiving [4] - Casual dining chains are in a turnaround phase, with some, like Chili's, achieving double-digit same-store sales growth, while others are beginning to see improvements [6][10] Company-Specific Insights - Red Robin expects a 3.4% increase in fourth-quarter comparable restaurant revenue, reflecting efforts to revamp its operations and customer engagement strategies [7][9] - Shake Shack's CEO expressed optimism about consumer resilience and spending, indicating a strong start to 2025 [5] - Starbucks is undergoing a turnaround under new leadership, with expectations of operational challenges and a projected same-store sales decline of 5.5% for the upcoming quarter [13][15] Market Sentiment - Executives across the restaurant industry are generally optimistic about 2025, citing improving consumer sentiment and wage growth, despite some chains facing challenges [19] - The industry is preparing for easier comparisons to last year's sales slump, which may enhance growth perceptions this year [19][20]