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Traditional Fast Food Stocks Q1 Earnings Review: El Pollo Loco (NASDAQ:LOCO) Shines


Petr Huřťák /
2024/06/27 5:07 am EDT

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 El Pollo Loco (NASDAQ:LOCO) and the rest of the traditional fast food stocks fared in Q1.

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 growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the traditional fast food stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.4% on average since the previous earnings results.

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, topping analysts' expectations by 4.6%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings and gross margin estimates.

Liz Williams, Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “The strength of the El Pollo Loco brand centers around our signature product – fire-grilled, citrus-marinated chicken that is prepared fresh daily for our customers. Since starting as CEO almost two months ago, I have been impressed with the brand’s beloved status among customers and our long-term potential for growth. With our unique positioning at the intersection of the Chicken and Mexican categories, I believe that we can take El Pollo Loco to another level. To that end, I have focused our organization around five strategic pillars: Brand that Wins, Hospitality Mindset, Digital First, Winning Unit Economics, and New Unit Growth, all of which are designed with one goal in mind – to get the right building blocks in place for future success. El Pollo Loco should be and will be a national brand, and I believe we have the right strategy in place to achieve our immense potential.”

El Pollo Loco Total Revenue

The stock is up 27.2% since the results and currently trades at $10.93.

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

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 $275.1 million, up 39.5% year on year, outperforming analysts' expectations by 7.6%. It was a very strong quarter for the company, with an impressive beat of analysts' earnings estimates and a solid beat of analysts' gross margin estimates.

Dutch Bros Total Revenue

Dutch Bros scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 45.4% since the results and currently trades at $41.34.

Is now the time to buy Dutch Bros? 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, with a miss of analysts' gross margin and earnings estimates.

The stock is down 10.7% since the results and currently trades at $79.02.

Read our full analysis of Starbucks's results here.

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 $365.3 million, down 7.7% year on year, falling short of analysts' expectations by 1.2%. It was an ok quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

Jack in the Box had the slowest revenue growth among its peers. The stock is down 4.8% since the results and currently trades at $50.5.

Read our full, actionable report on Jack in the Box here, it's free.

Arcos Dorados (NYSE:ARCO)

Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE:ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.

Arcos Dorados reported revenues of $1.08 billion, up 9.1% year on year, surpassing analysts' expectations by 5.6%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

The stock is down 18.3% since the results and currently trades at $9.16.

Read our full, actionable report on Arcos Dorados here, it's free.

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