Looking back on traditional fast food stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including El Pollo Loco (NASDAQ:LOCO) 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 6.1% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 1.5%. Overall, 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.
Liz Williams, Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “I am proud of the solid performance we delivered in Q2, as demonstrated by 4.5% system-wide comparable restaurant sales growth and company operated store margins of 18.6%, a 170 basis-point improvement. Our iconic Fire-Grilled Chicken, renewed focus in everyday value, and our consistent operations have clearly resonated with our guests and delivered exceptional results for the quarter. We are pleased with our results for the quarter, and believe that there is still significant potential for this beloved brand.”
Interestingly, the stock is up 16.4% since reporting and currently trades at $13.81.
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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, falling short of analysts’ expectations by 1.2%. However, it was still a solid quarter for the company with an impressive beat of analysts’ gross margin estimates and a narrow beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.1% since reporting. It currently trades at $69.07.
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’ revenue estimates.
Interestingly, the stock is up 25.1% since the results and currently trades at $94.98.
Wendy's (NASDAQ:WEN) Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.
Wendy's reported revenues of $570.7 million, up 1.6% year on year, falling short of analysts’ expectations by 1%. Overall, it was a decent quarter for the company with an impressive beat of analysts’ gross margin estimates but a miss of analysts’ earnings estimates.
The stock is down 1.5% since reporting and currently trades at $16.69.
Papa John's (NASDAQ:PZZA) Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ:PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Papa John's reported revenues of $507.9 million, down 1.3% year on year, falling short of analysts’ expectations by 2.5%. Overall, it was a decent quarter for the company with an impressive beat of analysts’ EPS and gross margin estimates.
The stock is up 11.3% since reporting and currently trades at $47.29.
This content was originally published on Stock Story
