Looking back on modern fast food stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Noodles (NASDAQ:NDLS) and its peers.
Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
The 7 modern fast food stocks we track reported a mixed Q1. As a group, revenues were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 6.3% on average since the latest earnings results.
Noodles (NASDAQ:NDLS)
Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.
Noodles reported revenues of $123.8 million, up 2% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
Noodles scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 23.5% since reporting and currently trades at $0.82.
Read our full report on Noodles here, it’s free.
Best Q1: Potbelly (NASDAQ:PBPB)
With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.
Potbelly reported revenues of $113.7 million, up 2.3% year on year, outperforming analysts’ expectations by 1.7%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Potbelly delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 23.5% since reporting. It currently trades at $10.54.
Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it’s free.
Shake Shack (NYSE:SHAK)
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Shake Shack reported revenues of $320.9 million, up 10.5% year on year, falling short of analysts’ expectations by 2%. It was a softer quarter as it posted a miss of analysts’ same-store sales and EBITDA estimates.
Interestingly, the stock is up 41.9% since the results and currently trades at $124.50.
Read our full analysis of Shake Shack’s results here.
CAVA (NYSE:CAVA)
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
CAVA reported revenues of $331.8 million, up 28.1% year on year. This print topped analysts’ expectations by 1.2%. It was a strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a decent beat of analysts’ EBITDA estimates.
CAVA achieved the fastest revenue growth among its peers. The stock is down 24.9% since reporting and currently trades at $74.50.
Read our full, actionable report on CAVA here, it’s free.
Chipotle (NYSE:CMG)
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Chipotle reported revenues of $2.88 billion, up 6.4% year on year. This result lagged analysts' expectations by 2.1%. It was a slower quarter as it also produced a miss of analysts’ same-store sales estimates.
Chipotle had the weakest performance against analyst estimates among its peers. The stock is up 5.3% since reporting and currently trades at $51.33.
Read our full, actionable report on Chipotle here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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