U.S. Markets closed
  • S&P 500

    4,704.54
    +15.87 (+0.34%)
     
  • Dow 30

    35,870.95
    -60.10 (-0.17%)
     
  • Nasdaq

    15,993.71
    +72.14 (+0.45%)
     
  • Russell 2000

    2,363.59
    -13.42 (-0.56%)
     
  • Gold

    1,861.20
    -0.20 (-0.01%)
     
  • Silver

    24.88
    -0.02 (-0.08%)
     
  • EUR/USD

    1.1369
    -0.0006 (-0.0568%)
     
  • 10-Yr Bond

    1.5890
    -0.0150 (-0.94%)
     
  • Vix

    17.59
    +0.48 (+2.81%)
     
  • GBP/USD

    1.3497
    -0.0003 (-0.0216%)
     
  • USD/JPY

    114.3040
    +0.0520 (+0.0455%)
     
  • BTC-USD

    54,835.63
    -326.80 (-0.59%)
     
  • CMC Crypto 200

    1,402.14
    -65.80 (-4.48%)
     
  • FTSE 100

    7,255.96
    -35.24 (-0.48%)
     
  • Nikkei 225

    29,683.09
    +84.43 (+0.29%)
     

U.S. Restaurants on Track for Steady Recovery: 5 Winners

  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The U.S. restaurant industry’s recovery is likely to pace up as the government further relaxes restrictions. One of the biggest news for restaurant owners came in the form of relaxations on outdoor mask usage for fully vaccinated people.

This will give people more confidence to visit restaurants as many were still skeptical about visiting eateries since the pandemic is far from over. Also, restaurant sales grew in April, according to the Commerce Department, which is an indication that the industry is fast getting back on its feet.

Restaurant Sales Rise

Although retail sales came in flat in April according to the Commerce Department, sales at restaurants and bars grew for the month. The Commerce Department said on May 14 that sales at restaurants and bars grew 3% in April.

The massive $1.9 trillion stimulus package saw $600 checks reaching millions of Americans, who spent more at restaurants after staying confined to their homes for months. This is also the second consecutive month of sales growth at restaurants and bars, which proves that the stimulus checks are helping people to go back to their normal lives.

Restaurant Sales Poised to Grow

Apart from the second round of stimulus checks, the vaccination drive has also ramped up, boosting people’s confidence. Biden’s pledge to vaccinate 70% of the population by Jul 4 is likely to further add to this confidence.

Moreover, last week the Biden administration announced that fully vaccinated people no longer need to wear masks outdoors. Restaurants had been struggling since March 2020 as sitting capacity indoors had to be drastically cut due to social distancing restrictions.

Following the announcement on relaxation of mask rules, the U.S. National Restaurant Association has now decided to remove a rule from its operating guidance that fully vaccinated people need to wear masks indoors.

According to a Restaurant Business Online article, citing a report by the National Restaurant Association, U.S. restaurants are on track for a steady recovery after declining 19.2% in 2020, which was also the most challenging year for the industry.

Our Choices

Ruths Hospitality Group, Inc. RUTH is the largest fine dining steakhouse company in the United States as measured by the total number of company-owned and franchisee-owned restaurants, with over 150 Ruth's Chris Steak House locations worldwide.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 41.4% over the past 60 days. Ruth’s Hospitality sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bloomin Brands, Inc. BLMN is a casual dining restaurant company with a portfolio of differentiated restaurant concepts. It has five concepts: Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse and Wine Bar and Roy's.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 79% over the past 60 days. Bloomin Brands carries a Zacks Rank #1.

Texas Roadhouse, Inc. TXRH is a full-service, casual dining restaurant chain, which offers assorted seasoned and aged steaks hand-cut daily on the premises and cooked to order over open gas-fired grills.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 37.6% over the past 60 days. Texas Redhouse sports a Zacks Rank #1.

Dine Brands Global, Inc. DIN is a full-service dining company. It operates and franchises restaurants under both the Applebee's Neighborhood Grill & Bar and IHOP brands. 

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 40.7% over the past 60 days. Dine Brandssports a Zacks Rank #1.

Chuys Holdings, Inc. CHUY owns and operates full-service restaurants serving a distinct menu of authentic Mexican food. The company offers a menu that includes appetizers, soups and salads, tacos, burritos, enchiladas, fajitas and combination platters.

The company’s expected earnings growth rate for the current year is 52.4%. The Zacks Consensus Estimate for current-year earnings has improved 15.3% over the past 60 days. Chuys Holdings holds a Zacks Rank #1.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DINE BRANDS GLOBAL, INC. (DIN) : Free Stock Analysis Report
 
Texas Roadhouse, Inc. (TXRH) : Free Stock Analysis Report
 
Ruths Hospitality Group, Inc. (RUTH) : Free Stock Analysis Report
 
Chuys Holdings, Inc. (CHUY) : Free Stock Analysis Report
 
Bloomin Brands, Inc. (BLMN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.