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Mark Twain may have called this week’s series of curvy chain restaurant revenue reports The Prince and the Whopper.

On Thursday, Restaurant Brands International, the often downtrodden fast-food umbrella company that owns Burger King and Canada’s Tim Horton’s, posted positive results fit for royalty. Earlier in the week, however, Cheesecake Factory – the marquee chain of what we’ll call mall-chicheadquartered in the upscale suburb of Calabasas, Calif., reported a failure as big as one of its giant slices of chocolate caramel cheesecake made with Snickers®.

Cheeseburger in paradise

Call it Maslow’s Hierarchy of Needs in the Age of Rapid Inflation. Somewhere in the base level of “physiological” needs for food and sustenance is Burger King’s drive-thru. Somewhere in Maslow’s short-lived “belonging and loving” mid-tier is Tinder (which saw strong earnings this week through parent company Match Group). Meanwhile, nothing quite screams “transcendence” like spending $80 on the most upscale dining option within 100 yards of a Build-A-Bear workshop: The Cheesecake Factory. But in 2022, it’s less of a fun night and more like free discretionary spending.

But perhaps there is a little more nuance. While both companies have faced rising costs over the past year, although the one with a “value menu” has weathered the storm much more favorably than the one with a menu nearly as long as infinity joke. This is a key difference between a surprise revenue gain and a disappointing revenue loss:

  • cheesecake factory did to see its revenue rise nearly 4% from a year ago to $784 million, but that was still well below analysts’ expectations and the gains were outweighed by a declining bottom line. Cost of sales increased by more than 16%; costs and expenses overall eclipsed revenues by about $2 million, signaling lower profit margins.
  • Restaurant brands saw their revenue jump nearly 16% to $1.7 billion. Although costs rose across the board, the company still made a profit thanks to small price increases and growing consumer demand due to higher prices elsewhere.

They love it: Even with Thursday’s good news, Burger King isn’t the undisputed master of the fast food business. McDonald’s also posted favorable returns last week, and on Wednesday KFC and Taco Bell owners Yum Brands outperformed. No surprise here: even with rising costs, cheap fast food chains can have their (cheese-)cake and eat it too.


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