The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Wendy's (NASDAQ: WEN) and the rest of the traditional fast food stocks fared in Q2.
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 Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $560.9 million, down 1.7% 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 an impressive beat of analysts’ EBITDA estimates but full-year EBITDA guidance missing analysts’ expectations.
"In the second quarter we continued to expand our global footprint, adding 44 new restaurants, bringing our total additions to 118 in the first half of the year," said Ken Cook, Interim CEO.
Interestingly, the stock is up 4.6% since reporting and currently trades at $10.43.
Is now the time to buy Wendy's? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $415.8 million, up 28% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA and same-store sales 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 26.6% since reporting. It currently trades at $73.15.
Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Jack in the Box (NASDAQ: JACK)
Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.
Jack in the Box reported revenues of $333 million, down 9.8% year on year, falling short of analysts’ expectations by 2.1%. It was a softer quarter as it posted a miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
As expected, the stock is down 1.7% since the results and currently trades at $18.60.
Read our full analysis of Jack in the Box’s results here.
McDonald's (NYSE: MCD)
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE: MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
McDonald's reported revenues of $6.84 billion, up 5.4% year on year. This result beat analysts’ expectations by 2.3%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ same-store sales estimates and a decent beat of analysts’ EBITDA estimates.
The stock is up 4.4% since reporting and currently trades at $311.98.
Read our full, actionable report on McDonald's here, it’s free.
Portillo's (NASDAQ: PTLO)
Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.
Portillo's reported revenues of $188.5 million, up 3.6% year on year. This print missed analysts’ expectations by 3.9%. It was a slower quarter as it also recorded a slight miss of analysts’ same-store sales estimates.
Portillo's had the weakest performance against analyst estimates among its peers. The stock is down 26.1% since reporting and currently trades at $7.02.
Read our full, actionable report on Portillo's 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.
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