As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the traditional fast food industry, including Yum! Brands (NYSE: YUM) 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.
In light of this news, share prices of the companies have held steady as they are up 2% on average since the latest earnings results.
Yum! Brands (NYSE: YUM)
Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
Yum! Brands reported revenues of $1.93 billion, up 9.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $147.
Is now the time to buy Yum! Brands? Access our full analysis of the earnings results here, it’s free.
Best Q2: Dutch Bros (NYSE: BROS)
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 $415.8 million, up 28% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA and same-store sales estimates.
Dutch Bros pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 9.8% since reporting. It currently trades at $63.44.
Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Jack in the Box (NASDAQ: JACK)
Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.
Jack in the Box reported revenues of $333 million, down 9.8% year on year, falling short of analysts’ expectations by 2.1%. It was a softer quarter as it posted a miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
Interestingly, the stock is up 8.3% since the results and currently trades at $20.50.
Read our full analysis of Jack in the Box’s results here.
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 $529.2 million, up 4.2% year on year. This number beat analysts’ expectations by 2.7%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ same-store sales estimates and a beat of analysts’ EPS estimates.
The stock is up 18.4% since reporting and currently trades at $47.99.
Read our full, actionable report on Papa John's here, it’s free.
Domino's (NASDAQ: 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 $1.15 billion, up 4.3% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also logged an impressive beat of analysts’ same-store sales estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 3.2% since reporting and currently trades at $451.70.
Read our full, actionable report on Domino's here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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