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 sit-down dining stocks fared in Q3, starting with Red Robin (NASDAQ:RRGB).
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 12 sit-down dining stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 0.7%.
While some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.
Red Robin (NASDAQ:RRGB)
Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.
Red Robin reported revenues of $274.6 million, down 1.1% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a softer quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
Unsurprisingly, the stock is down 14.6% since reporting and currently trades at $5.24.
Read our full report on Red Robin here, it’s free.
Best Q3: Brinker International (NYSE:EAT)
Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.14 billion, up 12.5% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Brinker International achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 41.1% since reporting. It currently trades at $137.19.
Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $111.8 million, down 2.1% year on year, falling short of analysts’ expectations by 3.2%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 11.2% since the results and currently trades at $5.89.
Read our full analysis of Denny’s results here.
BJ's (NASDAQ:BJRI)
Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $325.7 million, up 2.2% year on year. This result met analysts’ expectations. More broadly, it was a softer quarter as it produced a significant miss of analysts’ EBITDA and EPS estimates.
The stock is down 4.8% since reporting and currently trades at $35.29.
Read our full, actionable report on BJ's here, it’s free.
Kura Sushi (NASDAQ:KRUS)
Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.
Kura Sushi reported revenues of $66.01 million, up 20.2% year on year. This number topped analysts’ expectations by 3.1%. It was a very strong quarter as it also recorded a solid beat of analysts’ EPS and EBITDA estimates.
The stock is down 7% since reporting and currently trades at $95.95.
Read our full, actionable report on Kura Sushi 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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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