Spotting Winners: Dutch Bros (NYSE:BROS) And Traditional Fast Food Stocks In Q2

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at traditional fast food stocks, starting with Dutch Bros (NYSE:BROS).

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 mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.

Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. Thankfully, traditional fast food stocks have been resilient with share prices up 6.6% on average since the latest earnings results.

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 $324.9 million, up 30% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a solid quarter fof the company with a beat of analysts' EPS estimates.

Christine Barone, Chief Executive Officer and President of Dutch Bros, stated, “Our quarterly performance demonstrates the long runway ahead for Dutch Bros as we once again delivered strong top-line and profitability growth. Revenue rose 30%, including a 4.1% increase in system same-shop sales, and was underpinned by excellent margin flow through. With strong results 2024 to date despite the volatile consumer backdrop and expectations for a robust second half to the year, we are pleased to be raising our annual guidance.”

Dutch Bros pulled off the fastest revenue growth 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 16.9% since reporting and currently trades at $13.86.

Read our full report on Dutch Bros here, it’s free.

Best Q2: El Pollo Loco (NASDAQ:LOCO)

With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ:LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.

El Pollo Loco reported revenues of $122.2 million, flat year on year, outperforming analysts’ expectations by 1.5%. It was a 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 16.9% since reporting. It currently trades at $13.86.

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

Slowest Q2: Starbucks (NASDAQ:SBUX)

Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Starbucks reported revenues of $9.11 billion, flat year on year, falling short of analysts’ expectations by 1.5%. It was a weak quarter for the company with a miss of analysts’ gross margin and earnings estimates.

Interestingly, the stock is up 24.6% since the results and currently trades at $94.57.

Read our full analysis of Starbucks’s results here.

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 $1.11 billion, up 6.8% year on year, surpassing analysts’ expectations by 4.4%. Overall, it was a decent quarter for the company with EPS inline with expectations.

Arcos Dorados delivered the biggest analyst estimates beat among its peers. The stock is down 13% since reporting and currently trades at $8.80.

Read our full, actionable report on Arcos Dorados here, it’s free.

Yum China (NYSE:YUMC)

One of China’s largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $2.68 billion, flat year on year, falling short of analysts’ expectations by 2.9%. Taking a step back, it was a decent quarter for the company with an impressive beat of analysts’ gross margin estimates.

Yum China had the weakest performance against analyst estimates among its peers. The stock is up 14% since reporting and currently trades at $34.

Read our full, actionable report on Yum China here, it’s free.

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