Wrapping up Q1 earnings, we look at the numbers and key takeaways for the sit-down dining stocks, including Denny's (NASDAQ:DENN) and its peers.
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 14 sit-down dining stocks we track reported an ok Q1; on average, revenues missed analyst consensus estimates by 0.9%. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the sit-down dining stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.6% on average since the previous earnings results.
Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $110 million, down 6.4% year on year, falling short of analysts' expectations by 4.5%. It was a weaker quarter for the company, with a miss of analysts' revenue and earnings estimates.
Kelli Valade, Chief Executive Officer, stated, "I am very pleased that our first quarter domestic same-restaurant sales and traffic outperformed both the family and casual dining segments, while overcoming the industry's tough operating environment. We were also excited for Keke's to expand outside of Florida and begin testing our new design in the latest Florida openings. I am encouraged by the sales driving initiatives planned for the back half of the year including expanding our third virtual brand, Banda Burrito, launching our test with Franklin Junction, reigniting our Denny's remodel program and having the full force of our local co-op advertising fund for the first time since the pandemic began. These initiatives are sure to generate incremental sales and margins at our flagship brand.”
Denny's delivered the weakest performance against analyst estimates of the whole group. The stock is down 15.5% since the results and currently trades at $6.77.
Read our full report on Denny's here, it's free.
Best Q1: BJ's (NASDAQ:BJRI)
Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $337.3 million, down 1.2% year on year, in line with analysts' expectations. It was an exceptional quarter for the company, with same store sales, gross margin, and EPS all exceeding expectations.
The stock is up 9.4% since the results and currently trades at $35.83.
Is now the time to buy BJ's? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Dine Brands (NYSE:DIN)
Operating a franchise model, Dine Brands (NYSE:DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.
Dine Brands reported revenues of $206.2 million, down 3.5% year on year, falling short of analysts' expectations by 2%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
The stock is down 9.3% since the results and currently trades at $39.59.
Read our full analysis of Dine Brands's results here.
Brinker International (NYSE:EAT)
Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.12 billion, up 3.4% year on year, falling short of analysts' expectations by 0.1%. It was a very strong quarter for the company, with optimistic earnings guidance for the full year.
The stock is up 45% since the results and currently trades at $72.01.
Read our full, actionable report on Brinker International here, it's free.
First Watch (NASDAQ:FWRG)
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
First Watch reported revenues of $242.4 million, up 14.7% year on year, falling short of analysts' expectations by 1.1%. It was a mixed quarter for the company, with a decent beat of analysts' earnings estimates.
The stock is down 23.4% since the results and currently trades at $19.24.
Read our full, actionable report on First Watch here, it's free.
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