Continued weakness in quarterly results
In the Q2 2024 earnings season, nearly all of the seven biggest U.S. fast food chains posted weaker than expected results. Restaurant Brands International Inc, the owner of Burger King, beat consensus estimates for overall top-line sales but missed on same-store-sales, a key metric for restaurants which measures the sales growth for stores opened for more than 13 months (Chart 2).
Analyzing the point-in-time consensus estimate, analysts have significantly revised downward the same-store sales outlook for all restaurants for the year 2024, with Restaurant Brands International experiencing the most substantial revision.
Using alternative data to anticipate sales surprise
Alternative data, such as credit card transaction data, can provide intra-quarter insights on company performance ahead of earnings announcements. For example, in the case of Yum! Brands, our analysis shows a divergence between observed sales from alternative data and analysts’ consensus estimates. Chart 4 shows a consistent lower read from Bloomberg Second Measure data for Yum! Brands compared to consensus estimates for 2024 Q3, indicating that Yum! Brands could have a negative sales surprise for the quarter.
Chart 5 shows the reported earnings of the most recent 15 quarters for Yum! Brand; 80% of the time Bloomberg Second Measure pointed in the right direction, while consensus was either over or under estimating earnings.
Getting an early read on company performance
By using Bloomberg Second Measure transaction data analytics, available via Bloomberg Data License and delivered daily with a 3-day lag and via Bloomberg Terminal ALTD
Chart 6 shows the trailing 28-day observed sales change year-over-year for McDonald’s. After the company announced the five dollar value meal to attract customers at the end of June 2024, we observed a turnaround of the observed sales.
Data solutions
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Bloomberg Data License provides billions of data points daily spanning Reference, ESG, Pricing, Risk, Regulation, Fundamentals, Estimates, Historical data and more to help you streamline operations and discover new investment opportunities. Data License content aligns with the data on the Bloomberg Terminal to support investment workflows consistently and at scale across your enterprise.
Bloomberg’s Investment Research Data Solutions also comes with a python UDM* API tool which helps to simplify data query process and wrangling. One important feature is auto-completion of fields helping researchers and data scientists with data discoverability (Chart 7).
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For each company, the predictive accuracy of Bloomberg Second Measure’s (“BBSM”) estimates will typically vary over time. BBSM does not guarantee that the accuracy levels, trends or correlations illustrated by the examples in this document will recur for any company in the future. The estimates have been generated by running a standard nonproprietary formula on analytical data about past consumer transactions. BBSM makes available information about this formula to Bloomberg Second Measure clients and the analytical data is also accessible to such clients.
