Earnings results often indicate what direction a company will take in the months ahead. With Q2 now behind us, let’s have a look at Potbelly (NASDAQ:PBPB) and its peers.
Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
The 6 modern fast food stocks we track reported a strong Q2; on average, revenues beat analyst consensus estimates by 1.5%. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but modern fast food stocks have performed well, with the share prices up 10.5% on average since the previous earnings results.
Potbelly (NASDAQ:PBPB) With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.
Potbelly reported revenues of $119.7 million, down 5.5% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a solid beat of analysts' earnings estimates.
Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “The hard work and dedication of our team members during the second quarter enabled us to continue our growth in three key areas of the business. We grew same-store sales by 0.4%, we posted our 13th consecutive quarter of year-over-year shop margin expansion, and we opened four new shops to go along with franchise commitments for 22 additional shops.”
Potbelly delivered the slowest revenue growth of the whole group. The stock is up 5.3% since reporting and currently trades at $7.21.
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Best Q2: Wingstop (NASDAQ:WING) The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Wingstop reported revenues of $155.7 million, up 45.3% year on year, outperforming analysts' expectations by 7.3%. It was an exceptional quarter for the company with an impressive beat of analysts' gross margin estimates and a decent beat of analysts' earnings estimates.
Wingstop pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 1.6% since reporting. It currently trades at $371.48.
Sweetgreen (NYSE:NYSE:SG) Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Sweetgreen reported revenues of $184.6 million, up 21.1% year on year, exceeding analysts' expectations by 2.1%. It was a mixed quarter for the company with a decent beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.
Interestingly, the stock is up 32.9% since the results and currently trades at $34.90.
Chipotle (NYSE:CMG) Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Chipotle reported revenues of $2.97 billion, up 18.2% year on year, surpassing analysts' expectations by 1.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates.
The stock is up 7.4% since reporting and currently trades at $55.60.
Shake Shack (NYSE:NYSE:SHAK) Started as a hot dog cart in New York City's Madison Square (NYSE:SQ) Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Shake Shack reported revenues of $316.5 million, up 16.4% year on year, in line with analysts' expectations. Taking a step back, it was a very strong quarter for the company with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates.
The stock is up 16.9% since reporting and currently trades at $102.39.
This content was originally published on Stock Story
