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 sit-down dining stocks, starting with Red Robin (NASDAQ:RRGB).
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 beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 5.4% below.
While some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.3% since the latest earnings results.
Red Robin (NASDAQ:RRGB)
Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.
Red Robin reported revenues of $283.7 million, down 5.5% year on year. This print exceeded analysts’ expectations by 1.5%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Dave Pace, Red Robin's President and Chief Executive Officer said, "We have begun executing on the strategic elements of our First Choice plan and are already seeing encouraging results. Since launching our Big YUMMM Burger Deal in July, we have seen meaningful improvement in traffic compared to our second quarter exit rate. This value-driven offering, combined with our upcoming First Choice marketing launch represents the foundation of our multi-layered approach to sustainable traffic growth."
Red Robin delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 10.5% since reporting and currently trades at $6.61.
Is now the time to buy Red Robin? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $73.97 million, up 17.3% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Kura Sushi pulled off the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $79.70.
Is now the time to buy Kura Sushi? 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 $1.00 billion, down 10.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.
Bloomin' Brands delivered the slowest revenue growth in the group. As expected, the stock is down 19.3% since the results and currently trades at $7.25.
Read our full analysis of Bloomin' Brands’s results here.
The Cheesecake Factory (NASDAQ:CAKE)
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ:CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
The Cheesecake Factory reported revenues of $955.8 million, up 5.7% year on year. This result beat analysts’ expectations by 0.8%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is down 1.8% since reporting and currently trades at $62.
Read our full, actionable report on The Cheesecake Factory here, it’s free.
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 $307.9 million, up 19.1% year on year. This print met analysts’ expectations. It was a strong quarter as it also put up full-year EBITDA guidance exceeding analysts’ expectations and a solid beat of analysts’ same-store sales estimates.
The stock is down 1.7% since reporting and currently trades at $16.94.
Read our full, actionable report on First Watch 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.
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