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Q1 Earnings Outperformers: Krispy Kreme (NASDAQ:DNUT) And The Rest Of The Traditional Fast Food Stocks


Petr Huřťák /
2024/07/05 6:09 am EDT

As the Q1 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 Krispy Kreme (NASDAQ:DNUT) 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 decent Q1; on average, revenues were in line with analyst consensus estimates. 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 traditional fast food stocks have had a rough stretch, with share prices down 6.4% on average since the previous earnings results.

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 $442.7 million, up 5.7% year on year, topping analysts' expectations by 2%. It was an ok quarter for the company, with optimistic earnings guidance for the full year but a miss of analysts' gross margin estimates.

“First-quarter results exceeded our expectations, driven by increased digital sales and strong consumer demand, highlighted by a record setting Valentine’s Day with specialty doughnuts available in 33 countries around the world,” said Josh Charlesworth, CEO.

Krispy Kreme Total Revenue

The stock is down 20.3% since the results and currently trades at $10.12.

Is now the time to buy Krispy Kreme? Access our full analysis of the earnings results here, it's free.

Best Q1: El Pollo Loco (NASDAQ:LOCO)

With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ:LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.

El Pollo Loco reported revenues of $116.2 million, up 1.4% year on year, outperforming analysts' expectations by 4.6%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.

El Pollo Loco Total Revenue

The stock is up 27.5% since the results and currently trades at $10.95.

Is now the time to buy El Pollo Loco? Access our full analysis of the earnings results here, it's free.

Weakest Q1: 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 $8.56 billion, down 1.8% year on year, falling short of analysts' expectations by 6.5%. It was a weak quarter for the company: Its revenue and EPS unfortunately missed analysts' expectations as its same-store sales declined by 4% (driven by a 6% decline in volumes offset by a 2% increase in prices).

The stock is down 13.6% since the results and currently trades at $76.43.

Read our full analysis of Starbucks's results here.

Restaurant Brands (NYSE:QSR)

Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.

Restaurant Brands reported revenues of $1.74 billion, up 9.4% year on year, surpassing analysts' expectations by 2.2%. It was a very strong quarter for the company, with an impressive beat of analysts' gross margin estimates and a narrow beat of analysts' earnings estimates .

The stock is down 5.3% since the results and currently trades at $69.93.

Read our full, actionable report on Restaurant Brands here, it's free.

Yum China (NYSE:YUMC)

One of China’s largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $2.96 billion, up 1.4% year on year, falling short of analysts' expectations by 3.2%. It was an ok quarter for the company, with an impressive beat of analysts' gross margin estimates.

The stock is down 22.5% since the results and currently trades at $30.99.

Read our full, actionable report on Yum China here, it's free.

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