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Restaurant earnings: The pressure's on Chipotle

A Chipotle Restaurant sign is shown outside a Chipotle Restaurant in San Diego, California in this file photo taken September 24, 2013. Chipotle Mexican Grill Inc on Thursday reported a bigger-than-expected increase in sales at established restaurants and a nearly 30 percent rise in earnings, sending shares up more than 10 percent in extended trading. REUTERS/Mike Blake/Files (UNITED STATES - Tags: BUSINESS)

As restaurant investors get ready for another earnings season, analysts are calling for year-over-year revenue and earnings gains for most of the largest names, but the biggest of all will surprise Wall Street only if it doesn't post declines. That would be McDonald's (MCD).

It hasn't been the best year for the Oak Brook, Ill., Big Mac and fries seller, which will report its numbers Oct. 21. When it does, analysts are forecasting third-quarter earnings of $1.38 a share, according to FactSet estimates, with revenue of $7.21 billion. Both would be down from last year, when the company earned $1.52 with revenue of $7.32 billion.

Sales have been slowed for some time, and customer counts have been in retreat, even before a summer investigation involving a China supplier led to a revenue drop in Asia. (Still, the shares have been resilient, holding up fairly well and showing a year-to-date loss of only 5.9%. And it even got a record high earlier in 2014 before falling back.)

However, what's of greater relevance at the moment is whether it can avoid its third consecutive profit miss and offer any encouraging comments about future comparable sales, both in the U.S., where it's been weak, and in its important markets overseas. If the quarter isn't a complete disaster, it may well be that investors yet again keep the faith in the Golden Arches, which rewarded so many of them through much of the 2000s with price gains and dividends. The "good" news is that so many negatives are already known.

Outside of McDonald's, earnings and sales are set to be higher for most restaurants, analysts believe. Based on the estimated change in earnings per share -- which can be affected by many factors, including buybacks that lower share counts -- the 20 largest companies, measured by market cap, should improve this quarter's EPS by an average of 15.8% from last year. Revenue will rise 4.1%, while same-store sales are estimated to advance 3.1%.

A standout winner is probably going to be burrito seller Chipotle (CMG), the Denver fast-casual chain that used to be majority-owned by McDonald's. Revenue should be $1.06 billion, a 27.8% increase over last year's $827 million. At that rate, it would be well in front of sports bar operator Buffalo Wild Wings (BWLD), which is expected to report a 17.7% rise in revenue.

When it reports Oct. 20, Chipotle's earnings are seen soaring 44% to $3.83 a share from $2.66 a year ago. Same-store sales, which accounts for visitor traffic and pricing, are estimated to climb 16.6% -- after a 17.3% surge in the second quarter. That's far beyond other stores, as Chipotle is the only one in the set where double-digit comps are in the outlook.

But those lofty numbers also are a source of great pressure. Here, the question is whether investors would give it a pass if it doesn't deliver. That's difficult to imagine, because the last time it missed on the top line, in the third quarter of 2012, the stock slumped 15%. An EPS miss in the first quarter of this year led to a 5.9% drop in shares. Considering Chipotle is one of the best restaurant stocks this year, up 22%, any stumble has the potential to be met with considerable angst.

In addition to including fast-food and fast-casual restaurants, the survey group includes a variety of other stores, from doughnut and coffee seller Dunkin' Brands (DNKN) to Applebee's owner DineEquity (DIN). For the first quarter, analysts underestimated the earnings per share change for the restaurant group, as 15.5% growth was projected. Ultimately, it was 18.3%. Revenue views were too optimistic, however, as the 3.4% estimate was well above the 2.4% result. But in the second quarter, both analyst measures were too conservative. For EPS, 12.3% growth was anticipated, but 14.7% was the actual number. With revenue, the 4.4% increase surpassed the 3.7% forecast.

Among those restaurants that have already reported, Yum Brands (YUM), the owner of KFC, Taco Bell and Pizza Hut, was light on sales and profits, though its results were hindered by the same supply issue as McDonald's. Pizza maker Domino's (DPZ) had no such setbacks, and its shares bolted to an all-time high after it bettered analysts' estimates.