Looking back on traditional fast food stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including El Pollo Loco (NASDAQ: LOCO) 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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.

While some traditional fast food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2% since the latest earnings results.

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 print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ same-store sales estimates.

Liz Williams, Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “Our first quarter results fell short of our expectations on sales and store level profit. Despite the challenges we faced with the dynamic consumer environment, we delivered proof points that reinforce our belief in the brand’s long-term opportunity. From showing that menu innovation can drive trial of the brand through the launch of Mango Habanero, to identifying opportunities to further improve operational execution in our restaurants, we are proud of our accomplishments and believe we still have tremendous upside. Looking ahead, our focus remains squarely on executing the multitude of initiatives that we have in place to drive our brand forward.”

The stock is down 3.5% since reporting and currently trades at $9.10.

Is now the time to buy El Pollo Loco? Access our full analysis of the earnings results 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 a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.

Dutch Bros pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 15.9% since reporting. It currently trades at $68.50.

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 10.2% since the results and currently trades at $7.33.

Read our full analysis of Arcos Dorados’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 $523.5 million, down 2.1% year on year. This print met analysts’ expectations. Aside from that, it was a slower quarter as it recorded full-year EPS guidance missing analysts’ expectations and a slight miss of analysts’ same-store sales estimates.

The stock is down 7.6% since reporting and currently trades at $11.55.

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

Yum China (NYSE: YUMC)

One of China’s largest restaurant companies, Yum China (NYSE: YUMC) is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $2.98 billion, flat year on year. This result came in 3.7% below analysts' expectations. It was a softer quarter as it also recorded a miss of analysts’ EBITDA estimates and a slight miss of analysts’ EPS estimates.

Yum China had the weakest performance against analyst estimates among its peers. The stock is down 9.4% since reporting and currently trades at $42.28.

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

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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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