As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the traditional fast food industry, including Jack in the Box (NASDAQ:JACK) 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 mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.
While some traditional fast food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.6% since the latest earnings results.
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 $349.3 million, down 6.2% year on year. This print fell short of analysts’ expectations by 2.1%. Overall, it was a softer quarter for the company with full-year EBITDA guidance missing analysts’ expectations and a slight miss of analysts’ same-store sales estimates.
“I am very pleased we achieved our gross opening targets for both Jack in the Box and Del Taco in fiscal 2024, reflecting a level of growth not seen in over a decade, and also with the significant progress on our digital initiatives and POS rollout,” said Darin Harris, Jack in the Box Chief Executive Officer.
Unsurprisingly, the stock is down 10.2% since reporting and currently trades at $40.95.
Read our full report on Jack in the Box here, it’s free.
Best Q3: 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 $338.2 million, up 27.9% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Dutch Bros delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 58.5% since reporting. It currently trades at $55.35.
Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Krispy Kreme (NASDAQ:DNUT)
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ:DNUT) is one of the most beloved and well-known fast-food chains in the world.
Krispy Kreme reported revenues of $379.9 million, down 6.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 20.3% since the results and currently trades at $9.90.
Read our full analysis of Krispy Kreme’s results here.
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 $506.8 million, down 3.1% year on year. This number surpassed analysts’ expectations by 1.6%. Zooming out, it was a mixed quarter as it produced a slight miss of analysts’ same-store sales estimates.
The stock is down 29.6% since reporting and currently trades at $40.99.
Read our full, actionable report on Papa John's here, it’s free.
Starbucks (NASDAQ:SBUX)
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Starbucks reported revenues of $9.07 billion, down 3.2% year on year. This result came in 0.7% below analysts' expectations. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
The stock is down 5.8% since reporting and currently trades at $91.70.
Read our full, actionable report on Starbucks 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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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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