Let’s dig into the relative performance of Brinker International (NYSE: EAT) and its peers as we unravel the now-completed Q1 sit-down dining earnings season.

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.

Thankfully, share prices of the companies have been resilient as they are up 9.2% on average since the latest earnings results.

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. This print exceeded analysts’ expectations by 2.6%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.

"Chili's delivered another positive quarter in our turnaround with +31% same store sales driven by +21% traffic," said Kevin Hochman, President & CEO of Brinker International.

Brinker International achieved the highest full-year guidance raise 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 10.2% since reporting and currently trades at $144.22.

Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.

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, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 24.2% since reporting. It currently trades at $41.57.

Is now the time to buy BJ's? 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.

As expected, the stock is down 16.4% since the results and currently trades at $15.55.

Read our full analysis of First Watch’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 $64.89 million, up 13.3% year on year. This print met analysts’ expectations. More broadly, it was a softer quarter as it recorded a significant miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.

Kura Sushi had the weakest full-year guidance update among its peers. The stock is up 54.6% since reporting and currently trades at $63.96.

Read our full, actionable report on Kura Sushi here, it’s free.

Darden (NYSE: DRI)

Founded in 1968 as Red Lobster, Darden (NYSE: DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Darden reported revenues of $3.16 billion, up 6.2% year on year. This number came in 1.7% below analysts' expectations. It was a slower quarter as it also produced a slight miss of analysts’ same-store sales estimates.

Darden had the weakest performance against analyst estimates among its peers. The stock is up 8% since reporting and currently trades at $203.14.

Read our full, actionable report on Darden here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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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