CMG) Vs the rest of the modern fast food stocks

Quarterly earnings results are a good time to check a company’s progress, especially compared to its peers in the same sector. Today we look at Chipotle (NYSE:CMG) 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 offer an extensive menu selection, priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve quality-conscious customers. These restaurants capitalize on the perception that the burger and fries are bad for your health because of the inferior ingredients.

The 6 modern fast food stocks we’re watching reported a strong Q2; On average, revenue beat analysts’ consensus estimates by 1.5%. Inflation moved toward the Fed’s 2% target at the end of 2023, leading to a strong stock market performance. 2024 has been a bumpier ride as the market swings between optimism and pessimism about rate cuts amid mixed inflation data, but modern fast-food stocks performed well, with share prices rising an average of 10.5% versus previous earnings results.

Chipotle (NYSE:CMG)

Born out of a desire to provide 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 revenue of $2.97 billion, up 18.2% from a year earlier, beating analysts’ expectations by 1.1%. Overall, it was a very strong quarter for the company, with an impressive beat on analysts’ gross margin estimates and a narrow beat on analysts’ earnings estimates.

“The second quarter was outstanding as successful brand marketing, including the return of Chicken Al Pastor, generated strong demand at our restaurants. Our focus and training around manufacturing has paid off as we have been able to meet stronger demand trends with outstanding service and leading speed. Transaction growth of more than 8% in the quarter,” said Brian Niccol, President and CEO, Chipotle.

The stock is up 7.4% since the report and is currently trading at $55.60.

We think Chipotle is a good business, but is it a buy today? Read our full report here, it’s free.

Q2 Best: Potbelly (NASDAQ:PBPB)

With a unique origin story where the company actually started as an antique store, Potbelly ( NASDAQ:PBPB ) is today a chain known for its toasted sandwiches.

Potbelly reported revenue of $119.7 million, down 5.5 percent from a year earlier, in line with analyst expectations. It was a very strong quarter for the company, with an impressive beat on analysts’ gross margin estimates and a solid beat on analysts’ earnings estimates.

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The market seems happy with the results as the stock is up 5.3% since the report. It is currently trading at $7.21.

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

Sweetgreen (NYSE:SG)

Founded in 2007 by three Georgetown University graduates, Sweetgreen (NYSE:SG) is a fast-casual chain known for its healthy salads and bowls.

Sweetgreen reported revenue of $184.6 million, up 21.1% from a year earlier, beating analysts’ expectations by 2.1%. It was a mixed quarter for the company, with a decent beat on analysts’ gross margin estimates but a miss on analysts’ earnings estimates.

Interestingly, the stock is up 32.9% since the results and is currently trading at $34.90.

Read our full analysis of Sweetgreen’s results here.

Noodles (NASDAQ:NDLS)

Offering pasta, mac and cheese, pad thai and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain serving all kinds of noodles from around the world.

Noodles reported revenue of $127.4 million, up 1.8 percent from a year earlier, missing analysts’ expectations of 2.6 percent. The discount was a weaker quarter for the company, with full-year revenue guidance missing analysts’ expectations and a miss on analysts’ earnings estimates.

Noodles underperformed analysts’ estimates and had the weakest full-year guidance update among its peers. The stock is up 2.1% since the report and is currently trading at $1.49.

Read our full and actionable report on Noodles here, it’s free.

Shake Shack (NYSE:SHAK)

Started as a hot dog stand in New York’s Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenue of $316.5 million, up 16.4% from a year earlier, in line with analyst expectations. Overall, it was a very strong quarter for the company, with an impressive beat on analysts’ gross margin estimates and a narrow beat on analysts’ earnings estimates.

The stock is up 16.9% since the report and is currently trading at $102.39.

Read our full and practical Shake Shack report here, it’s free.

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