As the second quarter (Q2) earnings season concludes, we take a closer look at the performance of traditional fast food stocks, including Jack in the Box (NASDAQ:JACK) and its competitors.
Traditional fast-food restaurants are known for their quick service and convenience. They offer familiar and budget-friendly menu items, making them popular choices for individuals and families seeking a fast meal. However, this sector faces challenges regarding the perception of unhealthy meals and inferior ingredients. This concern is particularly relevant as consumers become increasingly health-conscious.
The 14 traditional fast food stocks we monitor reported mixed results for Q2. Overall, their revenues aligned with analysts’ expectations.
Growth stocks, particularly those with future cash flows, saw a positive end to 2023. However, the stock market has experienced volatility this year due to mixed inflation data. Despite this, traditional fast food stocks have shown resilience, with average share prices rising by 5.2% since the latest earnings reports.
Jack in The Box (NASDAQ:JACK)
Founded in 1951, Jack in the Box is a unique fast-food chain recognized for its bold flavors and innovative menu items. The company reported revenues of $369.2 million, a 7% decline from the previous year. While this figure met analysts’ expectations, the quarter was mixed overall, with earnings slightly exceeding estimates.
Darin Harris, CEO of Jack in the Box, expressed pride in the team’s efforts to enhance customer experience and operational improvements in a challenging sales environment. Despite these efforts, Jack in the Box experienced the slowest revenue growth among its peers, leading to a 15.5% drop in stock price since the report, with shares currently trading at $45.11.
Best Q2 Performer: El Pollo Loco (NASDAQ:LOCO)
El Pollo Loco, which means “The Crazy Chicken,” is known for its citrus-marinated, fire-grilled chicken, originating from Sinaloa, Mexico. The company reported revenues of $122.2 million, unchanged from the previous year, but it surpassed analysts’ expectations by 1.5%. This strong performance led to a 13.1% increase in stock price since the report, with shares currently at $13.41.
Starbucks (NASDAQ:SBUX)
Starbucks, a globally recognized coffeehouse chain, reported revenues of $9.11 billion, flat year on year. However, this figure fell short of analysts’ expectations by 1.5%. The quarter was challenging for Starbucks, as it missed revenue projections.
Despite this, the stock has risen by 20.3% since the earnings report, currently trading at $91.32.
Yum China (NYSE:YUMC)
Yum China, one of the largest restaurant companies in China, reported revenues of $2.68 billion, flat year on year, but missed analysts’ expectations by 2.9%. The quarter was weak overall, leaving some shareholders hoping for better results.
Despite this, the stock is up 15% since the report, with shares currently at $34.30.
Papa John’s (NASDAQ:PZZA)
Founded by John “Papa John” Schnatter, Papa John’s is a well-known pizza delivery and carryout chain. The company reported revenues of $507.9 million, down 1.3% year on year, falling short of analysts’ expectations by 2.5%. Overall, it was a weaker quarter for Papa John’s, but the stock has increased by 12.3% since the report, currently trading at $47.71.
Conclusion
The Q2 earnings season has revealed mixed results for traditional fast food stocks, with some companies outperforming while others struggled. As these chains navigate consumer preferences and market challenges, their ability to adapt will be crucial for future growth.