Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Noodles (NASDAQ:NDLS) and the best and worst performers in the modern fast food industry.
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 8 modern fast food stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.5%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 18.1% since the latest earnings results.
Weakest Q2: 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 $126.4 million, flat year on year. This print fell short of analysts’ expectations by 3.9%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
Noodles pulled off the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates of the whole group. Still, the market seems discontent with the results. The stock is down 32.6% since reporting and currently trades at $0.65.
Read our full report on Noodles here, it’s free for active Edge members.
Best Q2: 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 $356.5 million, up 12.6% year on year, outperforming analysts’ expectations by 0.9%. The business had a strong quarter with an impressive beat of analysts’ EBITDA and EPS estimates.
Shake Shack pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 32.6% since reporting. It currently trades at $95.
Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it’s free for active Edge members.
Sweetgreen (NYSE:SG)
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Sweetgreen reported revenues of $185.6 million, flat year on year, falling short of analysts’ expectations by 3.3%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Sweetgreen delivered the weakest full-year guidance update in the group. As expected, the stock is down 34.5% since the results and currently trades at $8.28.
Read our full analysis of Sweetgreen’s results here.
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 $123.7 million, up 3.4% year on year. This result beat analysts’ expectations by 0.9%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance topping analysts’ expectations.
The stock is up 48.1% since reporting and currently trades at $17.08.
Read our full, actionable report on Potbelly here, it’s free for active Edge members.
Portillo's (NASDAQ:PTLO)
Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.
Portillo's reported revenues of $188.5 million, up 3.6% year on year. This number came in 3.9% below analysts' expectations. It was a slower quarter as it also logged a slight miss of analysts’ same-store sales estimates.
The stock is down 30.2% since reporting and currently trades at $6.63.
Read our full, actionable report on Portillo's here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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