Restaurant earnings marked by slow sales, cost cuts

Third-quarter earnings results continued to showcase both bottom-line improvements driven by cost cutting, as well as stalled sales driven by consumers’ reluctance to start spending.

Wendy’s and Arby’s followed quick-service players McDonald’s and Burger King into the realms of reduced sales growth, which each operation plans to combat with more value items. Arby’s, for example, is expanding its test of a $1 value menu and will continue to promote its $5.01 combo meals.

Higher-end concepts, like Morton’s and McCormick &Schmick's, continue to feel the pressure of reduced business expenses, which have typically driven large business lunches and private parties.

Some companies, like Papa John’s International Inc. and Starbucks Corp. provided a silver lining to restaurant industry results by increasing their annual earnings guidance on better-than-expected results. Additional bright spots throughout the industry included reduced food costs and some outlooks that October sales trends have improved slightly.