Looking back on sit-down dining stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Kura Sushi (NASDAQ: KRUS) and its peers.
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 0.9%.
While some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.2% since the latest earnings results.
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 print exceeded analysts’ expectations by 3.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS and EBITDA estimates.
Hajime Uba, President and Chief Executive Officer of Kura Sushi, stated, “In fiscal 2024, we succeeded on our key goals of achieving over 20%-unit growth and maintaining best-in-class restaurant-level operating profit margins. I am tremendously excited for this fiscal year 2025 and what we can achieve in respect to these goals. Fiscal year 2025 is an opportunity to demonstrate the next level of Kura Sushi’s potential, and I am incredibly grateful for the excellent work by our team members who have positioned us so well for the new year.”
Unsurprisingly, the stock is down 17.1% since reporting and currently trades at $85.44.
Is now the time to buy Kura Sushi? Access our full analysis of the earnings results 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 and same-store sales estimates.
Brinker International scored 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 26.4% since reporting. It currently trades at $122.90.
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 3.5% since the results and currently trades at $6.40.
Read our full analysis of Denny’s results here.
The ONE Group (NASDAQ: STKS)
Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ: STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.
The ONE Group reported revenues of $194 million, up 152% year on year. This print lagged analysts' expectations by 10%. It was a softer quarter as it also produced full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
The ONE Group pulled off the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is down 24.1% since reporting and currently trades at $2.98.
Read our full, actionable report on The ONE Group here, it’s free.
Bloomin' Brands (NASDAQ: BLMN)
Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ: BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Bloomin' Brands reported revenues of $1.04 billion, down 3.8% year on year. This result lagged analysts' expectations by 0.8%. It was a softer quarter as it also recorded full-year EPS guidance missing analysts’ expectations.
Bloomin' Brands had the slowest revenue growth among its peers. The stock is down 24.9% since reporting and currently trades at $12.60.
Read our full, actionable report on Bloomin' Brands here, it’s free.
Market Update
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), has 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 heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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