Earnings results often indicate what direction a company will take in the months ahead. With Q3 now behind us, let’s have a look at Carrols (NASDAQ:TAST) 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 15 traditional fast food stocks we track reported a decent Q3; on average, revenues were in line with analyst consensus estimates. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and traditional fast food stocks have held roughly steady amidst all this, with share prices up 1.1% on average since the previous earnings results.
Carrols (NASDAQ:TAST) With a reputation for reviving underperforming locations, Carrols Restaurant Group (NASDAQ:TAST) is the largest franchisee of Burger King restaurants and also a major Popeyes franchisee.
Carrols reported revenues of $475.8 million, up 7.2% year on year, exceeding analysts' expectations by 1.5%. Overall, it was a stunning quarter for the company with an impressive beat of analysts' earnings estimates.
Deborah Derby, President and Chief Executive Officer of Carrols, commented, “We are pleased to report yet another quarter of exceptional performance for Carrols, demonstrated by strong comparable sales growth at our Burger King and Popeyes restaurants, along with a 74% increase in our restaurant-level profitability. We were thrilled to achieve positive traffic growth at our Burger King restaurants earlier than anticipated, with great traction on recent product launches, such as the BK Royal Crispy Wraps, which significantly outperformed expectations in the third quarter. Equally important, we delivered continued improvement in our speed of service and guest satisfaction scores, as our team members worked hard to provide our guests with an excellent experience in our restaurants.”
The stock is up 53.5% since reporting and currently trades at $9.54.
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Best Q3: 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 $116.2 million, up 1.4% year on year, outperforming analysts' expectations by 4.6%. It was an incredible quarter for the company with an impressive beat of analysts' earnings estimates.
The market seems happy with the results as the stock is up 37.1% since reporting. It currently trades at $11.78.
Weakest Q3: 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 $8.56 billion, down 1.8% year on year, falling short of analysts' expectations by 6.5%. It was a weak quarter for the company with a miss of analysts' gross margin and earnings estimates.
As expected, the stock is down 14.8% since the results and currently trades at $75.40.
Domino's (NYSE:DPZ) Founded by two brothers in Michigan, Domino’s (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Domino's reported revenues of $1.08 billion, up 5.9% year on year, in line with analysts' expectations. Taking a step back, it was a decent quarter for the company: Domino's beat analysts' revenue expectations. Its EPS also narrowly outperformed Wall Street's estimates.
The stock is down 1.9% since reporting and currently trades at $490.
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 $513.9 million, down 2.5% year on year, falling short of analysts' expectations by 5.4%. Overall, it was a decent quarter for the company with an impressive beat of analysts' gross margin estimates.
The stock is down 22.1% since reporting and currently trades at $44.48.
This content was originally published on Stock Story
