Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at The Cheesecake Factory (NASDAQ: CAKE) 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 11 sit-down dining stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.3% below.
Luckily, sit-down dining stocks have performed well with share prices up 15.8% on average since the latest earnings results.
The Cheesecake Factory (NASDAQ: CAKE)
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
The Cheesecake Factory reported revenues of $927.2 million, up 4% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
“Our first quarter results reflect a strong start to the year as we delivered solid topline revenue, margins and earnings, reflecting continued positive momentum across our business,” said David Overton, Chairman and Chief Executive Officer.
Interestingly, the stock is up 8.8% since reporting and currently trades at $54.93.
Is now the time to buy The Cheesecake Factory? Access our full analysis of the earnings results here, it’s free.
Best Q1: Brinker International (NYSE: EAT)
Founded by Norman Brinker in Dallas, Brinker International (NYSE: EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.43 billion, up 27.2% year on year, outperforming analysts’ expectations by 2.6%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ same-store sales estimates.
Brinker International scored the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.2% since reporting. It currently trades at $149.10.
Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $282.2 million, up 16.4% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 8.9% since the results and currently trades at $16.94.
Read our full analysis of First Watch’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 $348 million, up 3.2% year on year. This print was in line with analysts’ expectations. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 27.9% since reporting and currently trades at $42.82.
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 $64.89 million, up 13.3% year on year. This result met analysts’ expectations. Zooming out, it was a softer quarter as it recorded a significant miss of analysts’ EBITDA and same-store sales estimates.
Kura Sushi had the weakest full-year guidance update among its peers. The stock is up 59.1% since reporting and currently trades at $65.80.
Read our full, actionable report on Kura Sushi 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), 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 for 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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