Looking back on traditional fast food stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Arcos Dorados (NYSE:ARCO) and its peers.
Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.
The 14 traditional fast food stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Thankfully, traditional fast food stocks have been resilient with share prices up 5.4% on average since the latest earnings results.
Best Q2: Arcos Dorados (NYSE:ARCO) Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE:ARCO) is the master franchisee of the McDonald's (NYSE:MCD) brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.
Arcos Dorados reported revenues of $1.11 billion, up 6.8% year on year. This print exceeded analysts’ expectations by 4.4%. Overall, it was a very strong quarter for the company with a decent beat of analysts’ earnings estimates.
Arcos Dorados achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 16.8% since reporting and currently trades at $8.41.
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El Pollo Loco (NASDAQ:LOCO) With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ:LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.
El Pollo Loco reported revenues of $122.2 million, flat year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with a decent beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 7.8% since reporting. It currently trades at $12.78.
Slowest Q2: Starbucks (NASDAQ:SBUX) Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Starbucks reported revenues of $9.11 billion, flat year on year, falling short of analysts’ expectations by 1.5%. It was a slower quarter as it posted a miss of analysts’ revenue estimates. However, operating margin was better, leading to an operating income beat.
Interestingly, the stock is up 21.5% since the results and currently trades at $92.22.
Restaurant Brands (TSX:QSP_u) (NYSE:QSR) Formed through a strategic merger, Restaurant Brands International (NYSE:TSX:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.
Restaurant Brands reported revenues of $2.08 billion, up 17.2% year on year. This print missed analysts’ expectations by 1.2%. All in all, it was a slower quarter for the company.
The stock is down 3.9% since reporting and currently trades at $67.81.
Dutch Bros (NYSE:NYSE:BROS) Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Dutch Bros reported revenues of $324.9 million, up 30% year on year. This number surpassed analysts’ expectations by 2.4%. It was a very strong quarter as it also put up an impressive beat of analysts’ earnings estimates.
Dutch Bros pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is down 13.9% since reporting and currently trades at $32.47.
This content was originally published on Stock Story
