Quarterly earnings are a great time to review a company’s progress, especially relative to its industry peers. Today, we’re looking at Chipotle (NYSE:CMG) and the best and worst performers in the modern fast food industry.
Modern fast food is a relatively newer category that occupies a middle ground between traditional fast food and sit-down restaurants. These establishments feature a larger menu selection than traditional fast food options, and often use fresher, cleaner ingredients to cater to customers who prioritize quality. These eateries capitalize on the perception that your drive-through burger and fry joint is detrimental to your health due to inferior ingredients.
The 6 modern fast food stocks we track reported strong second quarters, with earnings beating analysts’ consensus estimates by an average of 1.5%. Inflation rose to the Fed’s 2% target by the end of 2023, leading to strong stock market performances. 2024 has been a bumpy ride as the market alternates between optimism and pessimism around rate cuts amid mixed inflation data, but modern fast food stocks have fared well, with share prices up an average of 10.5% since their last earnings results.
Chipotle (NYSE:CMG)
Chipotle (NYSE:CMG) is a fast food chain that was founded on the desire to provide quick meals made with fresh, flavorful ingredients. The chain is known for its healthy, Mexican-inspired cuisine and customizable dishes.
Chipotle reported revenue of $2.97 billion, up 18.2% year over year, beating analysts’ expectations by 1.1%. Overall, it was a very strong quarter for the company, impressively beating analysts’ gross margin estimates and slightly beating analysts’ profit estimates.
“The second quarter was outstanding as successful brand marketing, including the return of Chicken Al Pastor, drove strong demand for our restaurants. Our focus and training around throughput paid off as we were able to meet stronger demand trends with great service and speed, resulting in over 8% transaction growth in the quarter,” said Brian Niccol, chairman and CEO of Chipotle.
The stock has risen 7.4% since the report and is currently trading at $55.60.
We think Chipotle is a good company, but is it a buy today? Read our full report here, it’s free.
Best Q2: Potbelly (NASDAQ:PBPB)
Potbelly (NASDAQ:PBPB) has a unique origin story: the company started out as an antique shop and is now a chain known for its grilled cheese sandwiches.
Potbelly reported revenue of $119.7 million, down 5.5% year-over-year, in line with analyst expectations. It was a very strong quarter for the company, impressively beating analysts’ gross margin estimates and solidly beating analysts’ profit estimates.
The market seems pleased with the results, as the stock is up 5.3% since the report. It is currently trading at $7.21.
Is now the time to buy Potbelly? Check out our full profit analysis here, it’s free.
Sweetgreen (NYSE:SG)
Founded in 2007 by three Georgetown University alumni, Sweetgreen (NYSE:SG) is a casual fast food chain known for its healthy salads and bowls.
Sweetgreen reported revenue of $184.6 million, up 21.1% year over year, beating analysts’ expectations by 2.1%. It was a mixed quarter for the company, with a solid beating of analysts’ gross margin estimates but a miss on analysts’ profit estimates.
Interestingly, the stock is up 32.9% since the results and is currently trading at $34.90.
Read our full analysis of Sweetgreen’s results here.
Noodles (NASDAQ:NDLS)
Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves a variety of noodles from around the world. Its offerings include pasta, macaroni and cheese, pad thai and more.
Noodles reported revenue of $127.4 million, up 1.8% year-over-year, which was 2.6% below analyst expectations. Zooming out, it was a weaker quarter for the company, with a full-year revenue forecast that missed analysts’ expectations and a miss on analysts’ profit estimates.
Noodles had the weakest performance compared to analyst estimates and the weakest full-year forecast update among its peers. The stock is up 2.1% since the report and is currently trading at $1.49.
Read our full, hands-on report on Noodles here. It’s free.
Shake Shack (NYSE:SHAK)
Shake Shack (NYSE:SHAK) began as a hot dog cart in Madison Square Park in New York City and is a fast food restaurant known for its burgers and milkshakes.
Shake Shack reported revenue of $316.5 million, up 16.4% year over year, in line with analyst expectations. Overall, it was a very strong quarter for the company, impressively beating analysts’ gross margin estimates and slightly beating analysts’ profit estimates.
The stock has risen 16.9% since the report and is currently trading at $102.39.
Read our full, hands-on report on Shake Shack here. It’s free.
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