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Q1 Earnings Roundup: McDonald's (NYSE:MCD) And The Rest Of The Traditional Fast Food Segment


Petr Huřťák /
2024/07/10 4:53 am EDT

Let's dig into the relative performance of McDonald's (NYSE:MCD) and its peers as we unravel the now-completed Q1 traditional fast food earnings season.

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. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and traditional fast food stocks have had a rough stretch, with share prices down 7.9% on average since the previous earnings results.

McDonald's (NYSE:MCD)

Arguably one of the most iconic brands in the world, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience, value, and wide assortment of menu items.

McDonald's reported revenues of $6.17 billion, up 4.6% year on year, in line with analysts' expectations. It was an ok quarter for the company: Its revenue, same-store sales growth, and EPS were in line with analysts' expectations, showing the business is holding steady.

"Our global comparable sales growth in the first quarter marks 13 consecutive quarters of positive comparable sales growth with 30% growth over the last 4 years," said CEO Chris Kempczinski.

McDonald's Total Revenue

The stock is down 10% since reporting and currently trades at $246.24.

We think McDonald's is a good business, but is it a buy today? Read our full report 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 market seems happy with the results as the stock is up 33.4% since reporting. It currently trades at $11.46.

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).

As expected, the stock is down 17.3% since the results and currently trades at $73.16.

Read our full analysis of Starbucks's results here.

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, surpassing analysts' expectations by 7.6%. Looking more broadly, 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 delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 45.1% since reporting and currently trades at $41.24.

Read our full, actionable report on Dutch Bros here, it's free.

Yum! Brands (NYSE:YUM)

Spun off as an independent company from PepsiCo, Yum! Brands (NYSE:YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Yum! Brands reported revenues of $1.60 billion, down 2.9% year on year, falling short of analysts' expectations by 6.6%. Looking more broadly, it was a mixed quarter for the company with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

Yum! Brands had the weakest performance against analyst estimates among its peers. The stock is down 10.3% since reporting and currently trades at $126.66.

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

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