When it comes to investing in the stock market, knowing the market sentiment and the next trend is paramount. It is no secret that restaurant stocks had not the best time during the pandemic. Those that have an online presence would do well, while those that operate traditionally were badly affected. However, the industry is slowly getting back on its feet, and it could even be time to start paying attention to restaurant stocks. Furthermore, many restaurants have started to adapt to the new normal, employing ways to attract customers even at the hardest times. This includes the emphasis on contactless deliveries, digital ordering, and takeaways.
For instance, Kura Sushi USA Inc (NASDAQ: KRUS) had all 31 of its restaurants open with indoor dining capacities of 100%. During its third quarter, the company grew its revenue by a whopping 561% to $18.5 million. Meanwhile, companies that have loyalty programs for customer retention such as Papa John’s International, Inc (NASDAQ: PZZA) have done well throughout the pandemic. Its Papa Rewards reached a milestone with the signing up of its 20 millionth member earlier this month. With all said and done, it does appear that restaurant stocks are well-positioned to grow with the economic recovery. So, let us look at some of the top restaurant stocks in the stock market today.Best Restaurant Stocks To Buy [Or Sell] Today
- Domino’s Pizza, Inc (NYSE: DPZ)
- Chipotle Mexican Grill, Inc (NYSE: CMG)
- McDonald’s Corp (NYSE: MCD)
- Starbucks Corporation (NASDAQ: SBUX)
First up, we have one of the most popular pizza restaurant chain companies in Domino’s Pizza. The company has approximately 18,000 stores worldwide and is still expanding its reach as we speak. Earlier today, Domino’s reported its second-quarter results which beat estimates. Revenue for the quarter rose 12.2% from a year ago to $1.03 billion. Meanwhile, diluted earnings per share were $3.06, an increase of 2.3% year-over-year.
A month ago, Domino’s rolled out yet another new guarantee. Domino’s Carside Delivery 2-Minute Guarantee is simple. You order Domino’s Carside Delivery online, check-in when you arrive, and as soon as your order is ready, a Domino’s team member will head to your car in less than two minutes or your next pizza is free. To make things spicy, the company and DraftKings Inc (NASDAQ: DKNG) launched an over/under challenge as well.
As part of the challenge, customers will have the chance to predict if Domino’s Carside Delivery nationwide will be quicker or slower than two minutes 80% of the time. It gives customers a chance to win a share of $200,000. This really goes to show how confident the company is at executing its promises. There is no doubt that the pizza chain was one of the big winners during the pandemic as people relied on home delivery. That said, many restaurants have caught up with the digital ordering trend. With that in mind, is DPZ stock still a strong buy for you?Source: TD Ameritrade TOS
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Chipotle Mexican Grill needs little introduction. The company’s restaurants serve a menu of burritos, tacos, burrito bowls, and salads. It operates more than 2,500 restaurants worldwide, most of them based in the U.S. CMG stock has been riding a healthy uptrend over the past year. In fact, it soared by 11.54% in reaction to its second-quarter earnings report on Wednesday’s trading session.
In its second-quarter earnings report, the company posted revenue of $1.9 billion, representing an increase of 38.7% year-over-year. Out of which, digital sales grew by 10.5%, accounting for 48.5% of its sales. Most impressively, diluted earnings per share came in at $6.60, an increase of 2175.9% compared to the prior year’s quarter. This strong financial showing highlights the strength of its brand and illustrates a growing momentum in its business.
Earlier this month, Chipotle announced that it is among the first brands to leverage TikTok Resumes to recruit purpose-driven Gen-Z applicants. The company believes that applicants can showcase their authenticity and true passions in unique ways outside of the traditional sit-down interview. This is important as businesses today should be open to new ideas and cultures to ensure continuous growth. So, do you think CMG stock will have more room to run?Source: TD Ameritrade TOS McDonald’s Corp
Next up, we have one of everyone’s favorite fast-food chains, McDonald’s. The company serves a locally-relevant menu of food and drinks at more than 39 thousand restaurants around the world. McDonald’s has recovered tremendously since the sell-off back in March last year. Within the past year, the stock has risen by over 18%.
As we recover from the global pandemic, McDonald’s has also been showing signs of recovery. During its first quarter, the company beat Wall Street’s estimates for its quarterly earnings as net sales topped pre-pandemic levels. Its net sales climbed by 9% to $5.12 billion. Meanwhile, its net income was $1.54 billion, up by 38.7% year-over-year. So, with the company scheduled to report its second-quarter earnings next week, will we see continuous growth?
Well, UBS analyst Dennis Geiger sure thinks so. He believes that the U.S. sales strength and recovering international sales and margins should represent short to medium-term catalysts for MCD stocks. UBS reiterates a buy rating and price target of $260 for the stock. Now, do you share the same sentiment? If so, would you consider buying MCD stock?Source: TD Ameritrade TOS Starbucks Corporation
Starbucks is a multinational chain of coffeehouses that is headquartered in Washington. It is the world’s largest coffeehouse chain and boasts over 30,000 locations worldwide in more than 70 countries. It is a premier roaster and retailer of specialty coffee and the company has commanded substantial brand loyalty and market share over the years. SBUX stock has soared by over 50% just within the past year.
In June, Starbucks made several leadership appointments to advance the company’s strategic business goals. John Culver is now the group president, North America, and chief operating officer. Meanwhile, Michael Conway is the group president of International and Channel Development. Lastly, Michelle Burns has been promoted to executive vice president, Global Coffee, Tea, and Cocoa. These appointments would hopefully bring about long-term predictable and sustainable growth for the company.
Now that we are aware that the company is reporting its fiscal third-quarter results next week, it presents an opportunity to review its recent business update. For the second quarter, its global comparable store sales were up by 15%. This was largely driven by a 19% increase in the average amount of sales per customer. Not to mention, GAAP earnings per share were $0.56, doubling from the prior year. Given its impressive business momentum with sales recovery, would you jump on the SBUX stock bandwagon ahead of its earnings report?Source: TD Ameritrade TOS