Reflecting On Sit-Down Dining Stocks’ Q2 Earnings: Brinker International (NYSE:EAT)

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the sit-down dining stocks, including Brinker International (NYSE:EAT) and its peers.

Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.

The 12 sit-down dining stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.

Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and while some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results.

Brinker International (NYSE:EAT)

Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.

Brinker International reported revenues of $1.21 billion, up 12.3% year on year. This print exceeded analysts’ expectations by 3.8%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ gross margin estimates but underwhelming earnings guidance for the full year.

"We achieved another quarter of solid progress against our strategy to deliver profitable, sustainable growth. We significantly outperformed the industry in both sales and traffic during the quarter, while maintaining record high guest metrics," said Kevin Hochman, Chief Executive Officer and President of Brinker International.

Brinker International achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 23% since reporting and currently trades at $17.55.

Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.

Best Q2: First Watch (NASDAQ:FWRG)

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

First Watch reported revenues of $258.6 million, up 19.5% year on year, in line with analysts’ expectations. It was a very strong quarter for the company with an impressive beat of analysts’ gross margin estimates and a decent beat of analysts’ earnings estimates.

The market seems happy with the results as the stock is up 23% since reporting. It currently trades at $17.55.

Is now the time to buy First Watch? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Bloomin' Brands (NASDAQ:BLMN)

Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ:BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Bloomin' Brands reported revenues of $1.12 billion, down 2.9% year on year, in line with analysts’ expectations. It was a weak quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts’ earnings estimates.

Bloomin' Brands had the slowest revenue growth in the group. The stock is flat since the results and currently trades at $18.23.

Read our full analysis of Bloomin' Brands’s results here.

Kura Sushi (NASDAQ:KRUS)

Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.

Kura Sushi reported revenues of $63.08 million, up 28.1% year on year, in line with analysts’ expectations. Zooming out, it was a weak quarter for the company with a miss of analysts’ gross margin estimates and a miss of analysts’ earnings estimates.

The stock is up 14.8% since reporting and currently trades at $67.19.

Read our full, actionable report on Kura Sushi here, it’s free.

The ONE Group (NASDAQ:STKS)

Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.

The ONE Group reported revenues of $172.5 million, up 107% year on year, falling short of analysts’ expectations by 3.3%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ gross margin estimates but full-year revenue guidance missing analysts’ expectations.

The ONE Group delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 2.5% since reporting and currently trades at $3.87.

Read our full, actionable report on The ONE Group here, it’s free.

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