Looking back on traditional fast food stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Restaurant Brands (TSX:QSP_u) (NYSE:QSR) 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 recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Luckily, traditional fast food stocks have performed well with share prices up 12.2% on average since the latest earnings results.
Restaurant Brands (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 fell short of analysts’ expectations by 1.2%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.
Interestingly, the stock is up 2.2% since reporting and currently trades at $72.14.
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Best Q2: 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, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates.
Dutch Bros pulled off the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 15.1% since reporting. It currently trades at $32.03.
Slowest Q2: Portillo's (NASDAQ:PTLO)
Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.Portillo's reported revenues of $181.9 million, up 7.5% year on year, falling short of analysts’ expectations by 1.4%. It was a softer quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 52.4% since the results and currently trades at $13.55.
McDonald's (NYSE:NYSE:MCD)
Arguably one of the most iconic brands in the world, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience, value, and wide assortment of menu items.McDonald's reported revenues of $6.49 billion, flat year on year. This number lagged analysts' expectations by 2.1%. Overall, it was a slower quarter as it also produced a miss of analysts’ earnings estimates.
The stock is up 20.7% since reporting and currently trades at $304.09.
Jack in the Box (NASDAQ:JACK)
Delighting customers since its inception in 1951, Jack in the Box (NYSE:BOX) (NASDAQ:JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.Jack in the Box reported revenues of $369.2 million, down 7% year on year. This number met analysts’ expectations. Aside from that, it was a slower quarter as it underperformed in other aspects of the business.
Jack in the Box had the slowest revenue growth among its peers. The stock is down 13.7% since reporting and currently trades at $46.03.
This content was originally published on Stock Story
