United States Restaurants' 3Q results likely to show slow sales

As third-quarter earnings season begins this week with some of the largest restaurant companies reporting results, including McDonald’s, Brinker International and Chipotle, analysts are expecting slow sales and profits that are driven by cost cutting, much like the earlier quarters this year.

Despite comparisons to the third quarter last year, when sales dropped severely in the midst of the recession, restaurants have yet to see an uptick in customer visits or spending and are therefore still relying on depressed commodity and operating costs to drive earnings.

“Our October-to-date channel checks across the entire restaurant industry suggest another geographically broad-based negative same-store-sales deceleration across all categories despite generally easier year-to-year comparisons,” said securities analyst Paul Westra at Cowen &Co. in New York.

He estimated same-store sales declines of about 1 percent, compared with the third quarter of last year.