Reflecting On Modern Fast Food Stocks’ Q3 Earnings: Sweetgreen (NYSE:SG)
Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q3 now behind us, let’s have a look at Sweetgreen (NYSE:SG) and its peers.
Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
The 6 modern fast food stocks we track reported a very strong Q3; on average, revenues beat analyst consensus estimates by 1.2% Inflation (despite slowing) has investors prioritizing near-term cash flows, but modern fast food stocks held their ground better than others, with the share prices up 23.6% on average since the previous earnings results.
Weakest Q3: Sweetgreen (NYSE:SG)
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Sweetgreen reported revenues of $153.4 million, up 23.7% year on year, falling short of analyst expectations by 0.8%. It was a slower quarter for the company. Although its adjusted EBITDA and full-year adjusted EBITDA guidance beat analysts' estimates, its gross margin, revenue, and full-year revenue guidance fell short of Wall Street's expectations.
“We delivered another solid quarter that included 20%+ revenue growth, 300 basis points of restaurant level margin expansion from the prior year period, and positive Adjusted EBITDA,” said Jonathan Neman, Co-Founder and Chief Executive Officer.
Sweetgreen delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. The stock is up 1.4% since the results and currently trades at $11.18.
Is now the time to buy Sweetgreen? Access our full analysis of the earnings results here, it's free.
Best Q3: Wingstop (NASDAQ:WING)
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Wingstop reported revenues of $117.1 million, up 26.4% year on year, outperforming analyst expectations by 7.3%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue estimates.
Wingstop achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 43.1% since the results and currently trades at $261.47.
Is now the time to buy Wingstop? Access our full analysis of the earnings results here, it's free.
Chipotle (NYSE:CMG)
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Chipotle reported revenues of $2.47 billion, up 11.3% year on year, falling short of analyst expectations by 0.1%. It was a strong quarter for the company, with an impressive beat of analysts' earnings estimates .
The stock is up 25.8% since the results and currently trades at $2,271.89.
Read our full analysis of Chipotle's results here.
Noodles (NASDAQ:NDLS)
Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.
Noodles reported revenues of $127.9 million, down 1.2% year on year, surpassing analyst expectations by 1.4%. It was a very strong quarter for the company, with an impressive beat of analysts' same store sales, revenue, and EPS estimates.
Noodles delivered the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 12.5% since the results and currently trades at $2.48.
Read our full, actionable report on Noodles here, it's free.
Potbelly (NASDAQ:PBPB)
With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.
Potbelly reported revenues of $120.8 million, up 2.7% year on year, falling short of analyst expectations by 0.7%. It was a strong quarter for the company, with an impressive beat of analysts' adjusted EBITDA and EPS expectations. On the other hand, its revenue missed Wall Street's estimates, driven by its underperformance in same-store sales.
The stock is up 44.6% since the results and currently trades at $12.7.
Read our full, actionable report on Potbelly here, it's free.
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The author has no position in any of the stocks mentioned
