As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the traditional fast food industry, including Restaurant Brands (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 satisfactory Q4. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.4% since the latest earnings results.
Restaurant Brands (NYSE:QSR)
Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.
Restaurant Brands reported revenues of $2.30 billion, up 26.2% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ EPS estimates.
Restaurant Brands Total Revenue
The stock is down 6.3% since reporting and currently trades at $62.69.
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 $342.8 million, up 34.9% year on year, outperforming analysts’ expectations by 7.6%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Dutch Bros Total Revenue
Dutch Bros scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 5% since reporting. It currently trades at $61.51.
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ:DNUT) is one of the most beloved and well-known fast-food chains in the world.
Krispy Kreme reported revenues of $404 million, down 10.4% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 52.4% since the results and currently trades at $4.35.
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 $184.6 million, down 1.7% year on year. This result met analysts’ expectations. It was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 24.1% since reporting and currently trades at $10.31.
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 $1.14 billion, down 2.7% year on year. This number came in 2.7% below analysts' expectations. Taking a step back, it was still a strong quarter as it logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Arcos Dorados had the weakest performance against analyst estimates among its peers. The stock is down 3.3% since reporting and currently trades at $7.51.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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