Looking back on traditional fast food stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Starbucks (NASDAQ: SBUX) 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 Q3. 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 6.2% since the latest earnings results.
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 $9.07 billion, down 3.2% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
“It is clear we need to fundamentally change our strategy to win back customers. ‘Back to Starbucks’ is that fundamental change,” commented Brian Niccol, chairman and chief executive officer.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $97.80.
Read our full report on Starbucks here, it’s free.
Best Q3: 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 $338.2 million, up 27.9% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ same-store sales estimates.
Dutch Bros pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 71.8% since reporting. It currently trades at $60.
Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Krispy Kreme (NASDAQ: DNUT)
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 $379.9 million, down 6.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 30.2% since the results and currently trades at $8.67.
Read our full analysis of Krispy Kreme’s results here.
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 5.1% year on year. This number came in 1.7% below analysts' expectations. Overall, it was a slower quarter as it also produced a slight miss of analysts’ same-store sales and EBITDA estimates.
The stock is up 6.7% since reporting and currently trades at $440.80.
Read our full, actionable report on Domino's here, it’s free.
Wendy's (NASDAQ: WEN)
Founded by Dave Thomas in 1969, Wendy’s (NASDAQ: WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.
Wendy's reported revenues of $566.7 million, up 2.9% year on year. This result surpassed analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also logged full-year EBITDA guidance slightly topping analysts’ expectations but a slight miss of analysts’ same-store sales estimates.
The stock is down 30% since reporting and currently trades at $14.22.
Read our full, actionable report on Wendy'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% 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.
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