As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the sit-down dining industry, including First Watch (NASDAQ:FWRG) and its peers.
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 14 sit-down dining stocks we track reported an ok Q1; on average, revenues missed analyst consensus estimates by 0.9%. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the sit-down dining stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.8% on average since the previous earnings results.
First Watch (NASDAQ:FWRG) Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
First Watch reported revenues of $242.4 million, up 14.7% year on year, falling short of analysts' expectations by 1.1%. It was a mixed quarter for the company: First Watch blew past analysts' gross margin and adjusted EBITDA expectations. On the other hand, its revenue unfortunately missed analysts' expectations and full year guidance for revenue was lowered slightly.
“First Watch posted another solid quarter with positive same restaurant sales*, traffic trends that improved sequentially through the quarter and year-over-year adjusted EBITDA growth,” said Chris Tomasso, First Watch CEO and President.
The stock is down 29.2% since the results and currently trades at $17.8.
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Best Q1: BJ's (NASDAQ:BJRI) Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $337.3 million, down 1.2% year on year, in line with analysts' expectations. It was an exceptional quarter for the company, with an impressive beat of analysts' earnings estimates.
The stock is up 6.7% since the results and currently trades at $34.94.
Weakest Q1: Dine Brands (NYSE:DIN) Operating a franchise model, Dine Brands (NYSE:DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.
Dine Brands reported revenues of $206.2 million, down 3.5% year on year, falling short of analysts' expectations by 2%. It was a weak quarter for the company, with a miss of analysts' earnings and gross margin estimates.
The stock is down 14.9% since the results and currently trades at $37.14.
Texas Roadhouse (NASDAQ:TXRH) With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Texas Roadhouse reported revenues of $1.32 billion, up 12.5% year on year, falling short of analysts' expectations by 0.1%. It was a solid quarter for the company, with a decent beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates .
The stock is up 8.6% since the results and currently trades at $171.51.
Chuy's (NASDAQ:CHUY) Known for its ‘Big As Yo' Face’ burritos, Chuy’s (NASDAQ:CHUY) is a casual restaurant chain that specializes in Tex-Mex fare, which combines elements of traditional Mexican cuisine with Southern American cooking.
Chuy's reported revenues of $110.5 million, down 1.8% year on year, falling short of analysts' expectations by 1.1%. It was a solid quarter for the company, with an impressive beat of analysts' gross margin estimates and a decent beat of analysts' earnings estimates.
The stock is down 12.7% since the results and currently trades at $26.
