Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at McDonald's (NYSE:MCD) and the best and worst performers in the traditional fast food industry.
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 2.4% since the latest earnings results.
McDonald's (NYSE:MCD)
With nicknames spanning Mickey D's, McDanks, and our favorite, Mackers, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
McDonald's reported revenues of $6.87 billion, up 2.7% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ same-store sales estimates.
"We will stay laser-focused on providing an unparalleled experience with simple, everyday value and affordability that our consumers can count on as they continue to be mindful about their spending," said Chairman and CEO Chris Kempczinski.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $297.80.
Is now the time to buy McDonald's? Access our full analysis of the earnings results 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 achieved 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 54.6% since reporting. It currently trades at $54.
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 estimates.
Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 21.3% since the results and currently trades at $9.78.
Read our full analysis of Krispy Kreme’s results here.
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 number lagged analysts' expectations by 0.7%. Overall, it was a softer quarter as it also logged a significant miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.
The stock is down 4.3% since reporting and currently trades at $93.20.
Read our full, actionable report on Starbucks here, it’s free.
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 $2.29 billion, up 24.7% year on year. This result lagged analysts' expectations by 2.7%. It was a slower quarter as it also recorded a slight miss of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $70.21.
Read our full, actionable report on Restaurant Brands 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% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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