The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Arcos Dorados (NYSE:ARCO) and the rest of the traditional fast food stocks fared in Q4.
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 14 traditional fast food stocks we track reported a satisfactory Q4. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.2% since the latest earnings results.
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 $1.14 billion, down 2.7% year on year. This print fell short of analysts’ expectations by 2.7%, but it was still a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Arcos Dorados delivered the weakest performance against analyst estimates of the whole group. The stock is down 7.1% since reporting and currently trades at $7.22.
Is now the time to buy Arcos Dorados? Access our full analysis of the earnings results here, it’s free.
Best Q4: Dutch Bros (NYSE:BROS)
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Dutch Bros reported revenues of $342.8 million, up 34.9% year on year, outperforming analysts’ expectations by 7.6%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Dutch Bros pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 10.2% since reporting. It currently trades at $58.12.
Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $404 million, down 10.4% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Krispy Kreme delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 52.9% since the results and currently trades at $4.30.
Read our full analysis of Krispy Kreme’s results here.
McDonald's (NYSE:MCD)
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
McDonald's reported revenues of $6.39 billion, flat year on year. This result lagged analysts' expectations by 1.1%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ same-store sales estimates but a slight miss of analysts’ EPS estimates.
The stock is up 7.9% since reporting and currently trades at $317.49.
Read our full, actionable report on McDonald's here, it’s free.
Wendy's (NASDAQ:WEN)
Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.
Wendy's reported revenues of $574.3 million, up 6.2% year on year. This print surpassed analysts’ expectations by 2.1%. It was a very strong quarter as it also logged an impressive beat of analysts’ same-store sales estimates and a decent beat of analysts’ EBITDA estimates.
The stock is down 7% since reporting and currently trades at $13.23.
Read our full, actionable report on Wendy's here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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