As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sit-down dining industry, including Denny's (NASDAQ: DENN) 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 Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 5.4% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 $117.7 million, up 1.5% year on year. This print fell short of analysts’ expectations by 0.5%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

Kelli Valade, Chief Executive Officer, stated, "I am incredibly proud of our teams and franchisees for their unwavering commitment to delivering on our strategic initiatives amid shifting consumer trends. We have continued to stay nimble, innovate, and meet the guests where they are. For Denny’s, this meant innovating its value platform, leaning into its off-premises strength, and optimizing the franchise system, while Keke’s expanded its portfolio 7% year-to-date, launched its first ever system-wide promotion, and continued to steal share from its competitive set. Despite near-term choppiness, we are focused on what is within our control which also resulted in corporate administrative expense savings of approximately 3.5% compared to the prior year quarter, and refranchising three Keke’s company cafes with more on the horizon. We will continue to be agile and are committed to delivering shareholder value through balanced investments and returning to share repurchases in a meaningful way."

Interestingly, the stock is up 21.8% since reporting and currently trades at $4.45.

Read our full report on Denny's here, it’s free.

Best Q2: 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 $73.97 million, up 17.3% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Kura Sushi delivered 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 4.3% since reporting. It currently trades at $83.06.

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

Weakest Q2: 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 $1.00 billion, down 10.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.

Bloomin' Brands delivered the slowest revenue growth in the group. As expected, the stock is down 20.4% since the results and currently trades at $7.15.

Read our full analysis of Bloomin' Brands’s results here.

Red Robin (NASDAQ: RRGB)

Known for its bottomless steak fries, Red Robin (NASDAQ: RRGB) is a chain of casual restaurants specializing in burgers and general American fare.

Red Robin reported revenues of $283.7 million, down 5.5% year on year. This result beat analysts’ expectations by 1.5%. It was a strong quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Red Robin had the weakest full-year guidance update among its peers. The stock is up 8.9% since reporting and currently trades at $6.51.

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

Texas Roadhouse (NASDAQ: TXRH)

With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ: TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.

Texas Roadhouse reported revenues of $1.51 billion, up 12.7% year on year. This number topped analysts’ expectations by 0.6%. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ same-store sales estimates but a miss of analysts’ EBITDA estimates.

The stock is down 6.6% since reporting and currently trades at $172.74.

Read our full, actionable report on Texas Roadhouse 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.

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