Hello!

This week we’re talking:

• Starbucks' huge quarter

• Taco Bell's even huger quarter

• And some thoughts on the Grimace Burger

Read on…

3 Numbers

8%

Same-store sales growth for Taco Bell, which has become a Diablo sauce-fueled rocket for parent company Yum Brands. The chain is looking to compound its growth this year with a broader rollout of AI technology, which will let Taco Bell quickly change the layout, visuals, and messaging shown to its drive-thru customers.

0.5%

Same-store sales growth for Chipotle in the first quarter — a strong result after a pretty tough 2025 for the brand. Despite the sales growth, margins did compress, primarily due to wage inflation and rising beef prices, with net income dropping from $386M in Q1 of 2025 to $302M in the first quarter of 2026.

$5

Price of every sandwich on Subway’s new Fresh Value Menu — the first formal value menu in the chain’s history (the ubiquitous $5 Footlongs of the late 2000s were technically a limited time offer). The new menu consists of four protein wraps and 11 types of 6-inch sandwiches, including old standbys like the Turkey Ham and Cold Cut Combo.

The Big Story

In a busy restaurant earnings season, Starbucks has come out as a clear winner, via Restaurant Dive:

One stat that should have the folks in Seattle swinging the pendulum from It’s So Over to We’re So Back: 7.1% is the company’s best same-store sales number in two and a half years, and for the first time in a long time, it's because more people are showing up, not because the drinks cost more:

Since being named CEO in August 2024, Niccol has made more modifications than a customer filming a TikTok. To wit:

• Green Apron Service: This is reportedly the largest investment in operating standards in Starbucks’ history — a new store operating model built around a four-minute order-to-handoff target, powered by a new ‘smart queue’ algorithm and $500 million in additional labor hours.

• Coffeehouse experience reset: Starbucks brought back condiment bars, ceramic mugs, and Sharpie-written cups. Restrooms are now designated for customers only. These were small tweaks, but going into a Starbucks now feels a bit less transactional and chaotic, and more like visiting an actual coffeehouse.

• Menu and pricing simplification: The company eliminated the non-dairy milk upcharge, cut low-performing items, and added guardrails on customization so that complex TikTok-style drinks cost more while simple swaps cost less. On the marketing side, the Starbucks Super Bowl promotion was by all accounts a smashing success.

• Staffing model restructure: Starbucks overhauled its staffing processes, adding a full-time assistant manager at every store, expanded its rosters, and extended hours so nearly all stores are now open at or before 5 a.m. More money has also been set aside for frontline bonuses.

There are more reasons to be bullish (other than the obvious, which is that Starbucks ultimately sells caffeine, which I and roughly 284 million other Americans need every day to function normally): Scheduled ordering is finally coming to the app, and Starbucks has really just started to remodel its stores. Only 300 of the company's 11,000 company-operated North American stores have been renovated so far, with plans to hit 1,000 by year-end. There are few silver bullets in the restaurant industry, but for a brand with momentum, a store remodel is pretty close — it lifts everything from traffic to recruiting.

In the Headlines

• Cheesecake Factory reported a strong first quarter, with same-store sales rising 1.6%, a marked improvement over a 2.2% year-over-year drop in Q4 of 2025. Execs credited the “broad appeal and flexibility of its menu” with CFO Matt Clark noting during the Wednesday earnings call, “You can get anything you want to eat at Cheesecake Factory.” (The menu has a binding spine, so yes, that checks out.)

• Wingstop did not have as great of a quarter, with same-store sales dropping 8.7% (although — to be fair — it’s still comping off a blistering early 2020s run and is up 13.4% across three years).

• Domino’s is “not happy with” its Q1 results, with same-store sales rising just 0.9%. CEO Russell Weiner cited headwinds from winter weather and spiking fuel prices as taking a toll.

• Good interview with Sysco CEO Kevin Hourican, who detailed future expansion plans at the newly acquired Restaurant Depot and said Sysco has no plans to change the company’s format.

• Whataburger unveiled a revamped Kids ‘Whatameal’ program, featuring redesigned packaging, prizes, and stickers.

• Would you like to buy a piece of Piada Italian Street Food? The 62-unit chain is looking for a strategic growth partner. (Not investment advice, but the pepperoni Piada Sticks are quite good.)

• Some updates in the FAT Brands bankruptcy: Smokey Bones closed all its locations; multiple buyers have emerged for Twin Peaks, Hot Dog on a Stick, and Elevation Burger; and the remaining 13 chains are set to be purchased via a credit bit by FBG Bid Co., a (mysterious!) unknown buyer.

• Cool story on the birria-focused Talkin’ Tacos, which has used primarily its own cash flow to grow from 0 to 35 units in the past 6 years.

• The Sauce gods giveth and taketh away: after a seven month absence, Sweet and Sour Sauce returned to Wendy’s.

• McDonald’s released a new Grimace Burger, for now available only in the German market. It features a purple bun, purple sauce, purple slice of cheese, and … it looks pretty horrific, honestly. Let’s keep that one overseas.

Name That Chain!

You’ve got three guesses to name this week’s mystery chain:

• Founded in 1949 after a brother and sister bought an old hot dog stand and moved it to a cornfield near a public park in Lincoln, Nebraska

• The flagship menu item traces back to 18th-century Volga German immigrants — it's a bread pocket stuffed with seasoned beef, cabbage, and onions

• Still family-owned and now with around 90 locations in just one state, during the coldest months of the year, the chain runs a promotion where the price of its signature sandwich is set to match the lowest temperature recorded at any of its locations that morning

Find the answer at the bottom of the email…

Power Moves

Here are some notable C-suite moves from the past week:

• Chipotle tapped Fernando Machado - former CMO at RBI — as its new Chief Brand Officer.

• Ryan Lulow has been promoted from Mountain Mike’s VP of Finance to CFO.

• Red Robin hired Bloomin’ Brands vet Mark Graff as its CFO.

• Rafik Farouk and Jackie Lobdell have been hired as Freddy’s VP of Business Development and VP of Franchise Sales, respectively.

What’s New at FS Supply

One thing the Starbucks turnaround reinforces: the cup matters. It's the one piece of packaging every single customer touches, carries out the door, and — increasingly — posts on social media.

We work with chains to design and manufacture branded cup programs in both crystal-clear PET and double-wall hot cups. If your cups are still generic, you're missing an easy chance to carry your branding outside your building.

Thanks for reading! I’ll see you next week.

NAME THAT CHAIN ANSWER: Runza