The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how McDonald's (NYSE:MCD) and the rest of the traditional fast food stocks fared in Q2.
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 7.9% on average since the latest earnings results.
McDonald's (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 print fell short of analysts’ expectations by 2.1%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ gross margin estimates but a miss of analysts’ earnings estimates.
"We are confident that Accelerating the Arches is the right playbook for our business and as consumers are more discriminating with their spend, we are focused on the outstanding execution of delivering reliable, everyday value and accelerating strategic growth drivers like chicken and loyalty," said Chairman and CEO Chris Kempczinski.
Interestingly, the stock is up 9.3% since reporting and currently trades at $275.45.
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Best Q2: 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%. It was a strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a decent beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 11.3% since reporting. It currently trades at $13.20.
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 weak quarter for the company with a miss of analysts’ gross margin and earnings estimates.
Interestingly, the stock is up 24.9% since the results and currently trades at $94.82.
Arcos Dorados (NYSE:ARCO) Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE:ARCO) is the master franchisee of the McDonald's 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, surpassing analysts’ expectations by 5%. Taking a step back, it was a mixed quarter for the company with a narrow beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
Arcos Dorados pulled off the biggest analyst estimates beat among its peers. The stock is down 5.3% since reporting and currently trades at $9.57.
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%. Overall, it was a weaker quarter for the company with a miss of analysts’ gross margin and earnings estimates.
The stock is up 36.1% since reporting and currently trades at $12.10.
This content was originally published on Stock Story
