Let’s dig into the relative performance of Papa John's (NASDAQ: PZZA) and its peers as we unravel the now-completed Q1 traditional fast food earnings season.

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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.

Papa John's (NASDAQ: PZZA)

Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

Papa John's reported revenues of $518.3 million, flat year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ same-store sales estimates but a significant miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 20.9% since reporting and currently trades at $40.31.

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

Best Q1: 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 $355.2 million, up 29.1% year on year, outperforming analysts’ expectations by 3%. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.

Dutch Bros achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.8% since reporting. It currently trades at $72.00.

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

Weakest Q1: Arcos Dorados (NYSE: ARCO)

Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE: ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.

Arcos Dorados reported revenues of $1.08 billion, flat year on year, falling short of analysts’ expectations by 3.6%. It was a disappointing quarter as it posted a significant miss of analysts’ same-store sales and EPS estimates.

As expected, the stock is down 7.2% since the results and currently trades at $7.57.

Read our full analysis of Arcos Dorados’s results here.

El Pollo Loco (NASDAQ: LOCO)

With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ: LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.

El Pollo Loco reported revenues of $119.2 million, up 2.6% year on year. This number topped analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also recorded a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ same-store sales estimates.

The stock is flat since reporting and currently trades at $9.52.

Read our full, actionable report on El Pollo Loco here, it’s free.

Restaurant Brands (NYSE: QSR)

Formed through a strategic merger, Restaurant Brands International (NYSE: QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.

Restaurant Brands reported revenues of $2.11 billion, up 21.3% year on year. This result missed analysts’ expectations by 1.8%. It was a softer quarter as it also logged a miss of analysts’ EBITDA and EPS estimates.

The stock is up 3.8% since reporting and currently trades at $70.44.

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

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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