Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at First Watch (NASDAQ: FWRG) 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 were in line with analysts’ consensus estimates.

While some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.2% since the latest earnings results.

First Watch (NASDAQ: FWRG)

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

First Watch reported revenues of $316 million, up 25.6% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ same-store sales and EBITDA estimates.

“Our strong third quarter results and sequential year-to-date improvement in same restaurant traffic growth, same restaurant sales growth, and restaurant-level operating profit margin, are testament to the enduring strength of our business model and the efforts of our teams,” stated Chris Tomasso, CEO and President of First Watch.

First Watch achieved the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.8% since reporting and currently trades at $15.24.

Is now the time to buy First Watch? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: 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 $928.8 million, down 10.6% year on year, outperforming analysts’ expectations by 2.7%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 17.6% since reporting. It currently trades at $5.96.

Is now the time to buy Bloomin' Brands? Access our full analysis of the earnings results here, it’s free for active Edge members.

Slowest 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 $113.2 million, up 1.3% year on year, falling short of analysts’ expectations by 3.2%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 49.4% since the results and currently trades at $6.14.

Read our full analysis of Denny’s results here.

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 $79.45 million, up 20.4% year on year. This print topped analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but full-year revenue guidance missing analysts’ expectations.

Kura Sushi pulled off the highest full-year guidance raise among its peers. The stock is down 21.9% since reporting and currently trades at $42.75.

Read our full, actionable report on Kura Sushi here, it’s free for active Edge members.

Dine Brands (NYSE: DIN)

Operating a franchise model, Dine Brands (NYSE: DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.

Dine Brands reported revenues of $216.2 million, up 10.8% year on year. This result came in 1.7% below analysts' expectations. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

The stock is up 8.5% since reporting and currently trades at $26.69.

Read our full, actionable report on Dine Brands here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.