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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the traditional fast food stocks have fared in Q3, starting with Papa John's (NASDAQ:PZZA).
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 missed analyst consensus estimates by 0.6% Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but traditional fast food stocks held their ground better than others, with the share prices up 8.1% on average since the previous earnings results.
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 $522.8 million, up 2.4% year on year, falling short of analyst expectations by 1.4%. It was a weak quarter for the company, with a miss of analysts' revenue, EPS and free cash flow estimates.
“Strong execution by our teams and franchisees led to solid system-wide restaurant sales growth, transaction-led North America comp growth and improving North America restaurant-level margin in the third quarter,” said Rob Lynch, Papa Johns president and CEO.
The stock is up 14.9% since the results and currently trades at $74.99.
Is now the time to buy Papa John's? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $1.13 billion, up 22.1% year on year, outperforming analyst expectations by 3.4%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue estimates and a solid beat of analysts' earnings estimates.