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The pandemic led to a drop in revenues for EAT, which means the company faces easy comps this year. The economy returning to normal also implies increased volume at restaurants. Further, the pandemic led to tougher conditions with rising costs and a shortage of workers, resulting in many restaurant closures.
However, these headwinds are more than offset by the tailwind from the economy reopening as the company delivered 79% revenue growth and 230% earnings growth in its last quarter. While the pandemic has been a net-negative for the restaurant industry, one silver lining for the ones that made it through the pandemic is that they will face less competition. Further, public companies with more resources will be able to withstand cost pressure and invest in technology that could replace some labor.
