Q3 Earnings Outperformers: Krispy Kreme (NASDAQ:DNUT) And The Rest Of The Traditional Fast Food Stocks

December 06, 2024 at 02:52 AM EST

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As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the traditional fast food industry, including Krispy Kreme (NASDAQ: DNUT) and its peers.

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

The 14 traditional fast food stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 1.8% on average since the latest earnings results.

Weakest Q3: Krispy Kreme (NASDAQ: DNUT)

Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.

Krispy Kreme reported revenues of $379.9 million, down 6.8% year on year. This print was in line with analysts’ expectations, but overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

“Krispy Kreme delivered a seventeenth consecutive quarter of year-over-year organic sales growth driven by increased Delivered Fresh Daily and digital sales,” said Josh Charlesworth, CEO.

Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 15.4% since reporting and currently trades at $10.51.

Read our full report on Krispy Kreme here, it’s free.

Best Q3: Dutch Bros (NYSE: BROS)

Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE: BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Dutch Bros reported revenues of $338.2 million, up 27.9% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.

Dutch Bros achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 54.4% since reporting. It currently trades at $53.90.

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

Starbucks (NASDAQ: SBUX)

Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Starbucks reported revenues of $9.07 billion, down 3.2% year on year, falling short of analysts’ expectations by 0.7%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimatess.

Interestingly, the stock is up 1.9% since the results and currently trades at $99.23.

Read our full analysis of Starbucks’s results here.

Wendy's (NASDAQ: WEN)

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ: WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Wendy's reported revenues of $566.7 million, up 2.9% year on year. This print beat analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it also recorded full-year EBITDA guidance slightly topping analysts’ expectations but a slight miss of analysts’ same-store sales estimates.

The stock is down 12.9% since reporting and currently trades at $17.69.

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

Domino's (NYSE: DPZ)

Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.

Domino's reported revenues of $1.08 billion, up 5.1% year on year. This number lagged analysts' expectations by 1.7%. Overall, it was a slower quarter as it also logged a slight miss of analysts’ same-store sales and EBITDA estimates.

The stock is up 12.6% since reporting and currently trades at $465.41.

Read our full, actionable report on Domino's 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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