Q3 Earnings Highlights: Papa John's (NASDAQ:PZZA) Vs The Rest Of The Traditional Fast Food Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the traditional fast food stocks have fared in Q3, starting with Papa John's (NASDAQ:PZZA).
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 15 traditional fast food stocks we track reported a decent Q3; on average, revenues missed analyst consensus estimates by 0.6% Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but traditional fast food stocks held their ground better than others, with the share prices up 8.1% on average since the previous earnings results.
Papa John's (NASDAQ:PZZA)
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ:PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Papa John's reported revenues of $522.8 million, up 2.4% year on year, falling short of analyst expectations by 1.4%. It was a weak quarter for the company, with a miss of analysts' revenue, EPS and free cash flow estimates.
“Strong execution by our teams and franchisees led to solid system-wide restaurant sales growth, transaction-led North America comp growth and improving North America restaurant-level margin in the third quarter,” said Rob Lynch, Papa Johns president and CEO.
The stock is up 14.9% since the results and currently trades at $74.99.
Is now the time to buy Papa John's? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $1.13 billion, up 22.1% year on year, outperforming analyst expectations by 3.4%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue estimates and a solid beat of analysts' earnings estimates.
Arcos Dorados achieved the biggest analyst estimates beat among its peers. The stock is up 14.6% since the results and currently trades at $12.08.
Is now the time to buy Arcos Dorados? 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 $407.4 million, up 7.9% year on year, falling short of analyst expectations by 1.6%. It was a weak quarter for the company, with a miss of analysts' revenue, gross margin, adjusted EBITDA, and EPS estimates. These misses were driven by underperformance in its U.S. division, which accounted for 63.9% of sales this quarter.
Krispy Kreme had the weakest full-year guidance update in the group. The stock is up 5.9% since the results and currently trades at $14.23.
Read our full analysis of Krispy Kreme's results here.
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 $2.91 billion, up 8.5% year on year, falling short of analyst expectations by 5.7%. It was a weak quarter for the company, with a miss of analysts' revenue, gross margin, and EPS estimates. These misses were driven by its lower-than-expected same-store sales growth, which is usually higher margin revenue than sales from new restaurants.
Yum China had the weakest performance against analyst estimates among its peers. The stock is down 24.9% since the results and currently trades at $39.45.
Read our full, actionable report on Yum China here, it's free.
Domino's (NYSE:DPZ)
Founded by two brothers in Michigan, Domino’s (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Domino's reported revenues of $1.03 billion, down 3.9% year on year, falling short of analyst expectations by 2%. It was a mixed quarter for the company, with a miss of analysts' revenue estimates. On the other hand, EPS exceeded expectations.
The stock is up 15.8% since the results and currently trades at $410.14.
Read our full, actionable report on Domino's here, it's free.
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The author has no position in any of the stocks mentioned
