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Restaurant Stocks' Apr 29 Earnings Roster: MCD, DPZ & TXRH

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·5 min read
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  • MCD
  • TXRH

Although the pandemic-induced concerns continue to hurt the prospects of restaurant industry on a global scale, the industry remains resilient. This is quite evident from its focus on initiatives, like increasing off-premise business model, to counter the challenges related to the pandemic.

Restaurateurs are likely to have benefited from focus on delivery, takeout, drive-thru, catering, meal kits, and off-site options such as kiosks as well as food trucks in first-quarter 2021. Moreover, reductions in menu options are being implemented in order to support the business model.

Meanwhile, companies have resorted to innovations such as contactless and carside delivery to boost sales amid the ongoing pandemic. Also, various digital initiatives have been implemented. This includes GPS driver tracking, enhancement of make-line and cut-table technology, and AI-enabled forecasting for a better match of demand with capacity. Markedly, the initiatives are likely to boost speed, accuracy and efficiency, thereby offering enhanced services to customers.

However, dismal store traffic due to social distancing protocols cannot be ruled out. Also, some dining rooms have been closed again on account of local and state restrictions due to rise in the number of coronavirus cases.

Let’s take a sneak peek into how the following restaurant operators are positioned prior to their earnings release on Apr 29.

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

McDonald's Corporation MCD is scheduled to report first-quarter 2021 results before the opening bell. In the last reported quarter, the company delivered a negative earnings surprise of 2.9%.

McDonald's first-quarter results are likely to reflect strong performance of drive-thru, delivery & take-away. Prior to the coronavirus crisis, drive-thru accounted for about two-thirds of all sales in the United States. Drive-thru now accounts for approximately 90% of sales. Moreover, the company is likely to have benefited from expansion efforts. Despite the pandemic, the company opened about 500 restaurants in across the market in 2020. In 2021, McDonald's is planning to open more than 1,300 restaurants globally. In 2021, it anticipates systemwide sales growth, in constant currencies, in the low double digits.

Notably, the Zacks Consensus Estimate for revenues at international operated restaurants stands at $2,401 million, indicating growth of 0.9% from the prior-year quarter. Moreover, the company is likely to have benefited from increase in revenues at franchise-operated restaurants. Notably, the Zacks Consensus Estimate for revenues at franchise-operated restaurants stands at $2,780 million, suggesting an improvement of 6.6% from the prior-year quarter. (Read more: Robust Digital Sales to Drive McDonald's Q1 Earnings)

The company has a Zacks Rank #3 and an Earnings ESP of -0.92%.

McDonalds Corporation Price and EPS Surprise

McDonalds Corporation Price and EPS Surprise
McDonalds Corporation Price and EPS Surprise

McDonalds Corporation price-eps-surprise | McDonalds Corporation Quote

Domino's Pizza, Inc. DPZ is scheduled to report first-quarter 2021before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 8.7%.

The company’s first-quarter performance is likely to have benefited from robust U.S. and international comparable sales. Comps in the quarter to be reported may have gained from ticket growth. Notably, fourth-quarter fiscal 2020 marked the 108th consecutive quarter of positive same-store sales in its international business. Domestically, fourth-quarter fiscal 2020 marked the 39th consecutive quarter of positive same-store sales. Store expansion also bodes well for the company. It inaugurated 388 (116 net U.S. stores and 272 net new international stores) net new stores globally during fourth-quarter fiscal 2020.

Meanwhile, the Zacks Consensus Estimate for domestic revenues from franchise advertising and supply chain is pegged at $109 million and $574 million, suggesting an improvement of 13.5% and 11.9%, respectively, from the year-ago reported figure. Moreover, domestic company-owned stores’ revenues are anticipated to witness a rise of 13.7% to $116 million. However, the Zacks Consensus Estimate for international franchise royalties and fees is pegged at $64 million, indicating growth of 10.3% from the prior-year quarter. (Read more: Robust Comps Growth to Drive Domino's Q1 Earnings)

The company has a Zacks Rank #3 and an Earnings ESP of +2.75%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dominos Pizza Inc Price and EPS Surprise

Dominos Pizza Inc Price and EPS Surprise
Dominos Pizza Inc Price and EPS Surprise

Dominos Pizza Inc price-eps-surprise | Dominos Pizza Inc Quote

Texas Roadhouse, Inc. TXRH is scheduled to report first-quarter 2021 results after the market close. In the last reported quarter, the company reported an earnings miss of 42.9%. The company has an Earnings ESP of +8.89% and a Zacks Rank #3. The company’s earnings and revenues are likely to witness growth of 156.5% and 13.9% year over year, respectively.

Texas Roadhouse, Inc. Price and EPS Surprise

Texas Roadhouse, Inc. Price and EPS Surprise
Texas Roadhouse, Inc. Price and EPS Surprise

Texas Roadhouse, Inc. price-eps-surprise | Texas Roadhouse, Inc. Quote

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