Spotting Winners: Krispy Kreme (NASDAQ:DNUT) And Traditional Fast Food Stocks In Q3
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 Krispy Kreme (NASDAQ:DNUT).
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% Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but traditional fast food stocks held their ground better than others, with the share prices up 8.6% on average since the previous earnings results.
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' earnings estimates.
“Our third quarter results showed the strength of our team, business model, and the power of our brand. We delivered revenue and Adjusted EBITDA growth, while delivering Adjusted EBITDA margin expansion through our hub and spoke model. Our global expansion continued, and our doughnuts became available in two new markets, Switzerland and Kazakhstan, and Insomnia Cookies expanded internationally into Canada and the United Kingdom. Overall, Global Points of Access growth accelerated, increasing by 1,691 or 14.4% year-over-year to 13,394,” stated CEO Mike Tattersfield.
Krispy Kreme delivered the weakest full-year guidance update of the whole group. The stock is up 1.6% since the results and currently trades at $13.66.
Read our full report on Krispy Kreme 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 and earnings estimates.
Arcos Dorados pulled off the biggest analyst estimates beat among its peers. The stock is up 15.4% since the results and currently trades at $12.16.
Is now the time to buy Arcos Dorados? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 estimates.
Yum China had the weakest performance against analyst estimates in the group. The stock is down 32% since the results and currently trades at $35.75.
Read our full analysis of Yum China's results here.
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 mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' revenue estimates.
The stock is up 15.4% since the results and currently trades at $75.3.
Read our full, actionable report on Papa John's here, it's free.
McDonald's (NYSE:MCD)
Arguably one of the most iconic brands in the world, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience, value, and wide assortment of menu items.
McDonald's reported revenues of $6.69 billion, up 14% year on year, surpassing analyst expectations by 2.2%. It was an impressive quarter for the company, with a solid beat of analysts' revenue estimates.
The stock is up 17.4% since the results and currently trades at $300.34.
Read our full, actionable report on McDonald's here, it's free.
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The author has no position in any of the stocks mentioned
