US Restaurants Food Safety Issues Complicate Earnings Setup

Research evidence excerpt

US Restaurants Food Safety Issues Complicate Earnings Setup

e traffic outlook,

iii) updates on North Italia & Flower Child performance, and iv) latest insights on

the consumer and macro impacts.

WING earnings (7/29) - we believe key investor expectations include a reasonably

wide range of estimates for 2Q sss of down ~5.5-7.5% (Consensus down 5.5%),

with an expectation that full year sss guidance could be lowered to down LSD-

MSD% or down MSD% (from down LSD%). Focus is on WING's traffic and sales

recovery into 2H26 as comparisons ease, with an emphasis on progress against

strategic initiatives including Smart Kitchen, loyalty rollout, marketing, and

promotions / value efforts. Investors are also focused on any updated commentary

on new store cannibalization and potential impacts over time to the new store

development growth rate.

CMG earnings (7/29) - key investor expectations we’ve heard include 2Q sss ~in

line with Consensus (Cons. 1.4%), with an encouraging exit trajectory supportive

of a solid 3Q setup closer to ~2-3%. But indirect impacts from industry food safety

concerns have resulted in a notable sss slowdown in alternative data, with

investors anticipating negative trends recently, and a 3Q comp now closer to

~flattish, recognizing the situation is fluid. Investors were expecting ‘26 sss

guidance would be increased to ~1% from approximately flat, but given the

slower trends related to industry food safety concerns, reiteration of the ~flat

comp target is now largely expected. Beyond impacts from the cyclosporiasis

outbreak and 3QTD trends, focus is on commentary on key sales drivers, including

upcoming LTOs, operational improvements, catering, marketing, and

opportunities to improve value perceptions.