Wrapping up Q4 earnings, we look at the numbers and key takeaways for the modern fast food stocks, including Sweetgreen (NYSE:SG) and its peers.
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 7 modern fast food stocks we track reported a mixed Q4. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 22.9% since the latest earnings results.
Weakest Q4: 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 $160.9 million, up 5.1% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA estimates.
“Our 2024 results exceeded our initial expectations, thanks to the strength of our menu innovation, technology, and overall guest experience,” said Jonathan Neman, Co-Founder and CEO.
Sweetgreen Total Revenue
Sweetgreen delivered the weakest full-year guidance update of the whole group. The stock is down 20.6% since reporting and currently trades at $18.41.
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
CAVA reported revenues of $227.4 million, up 28.3% year on year, outperforming analysts’ expectations by 2.2%. The business had a very strong quarter with a solid beat of analysts’ EPS and same-store sales estimates.
CAVA Total Revenue
CAVA scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 13.2% since reporting. It currently trades at $86.20.
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Wingstop reported revenues of $161.8 million, up 27.4% year on year, falling short of analysts’ expectations by 1.9%. It was a softer quarter as it posted a miss of analysts’ same-store sales and EBITDA estimates.
Wingstop delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 28.8% since the results and currently trades at $218.20.
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 $121.8 million, down 2% year on year. This number missed analysts’ expectations by 1.3%. It was a slower quarter as it also recorded a significant miss of analysts’ EBITDA estimates and a miss of analysts’ EPS estimates.
Noodles pulled off the highest full-year guidance raise among its peers. The stock is down 25.8% since reporting and currently trades at $0.92.
Born from a desire to offer 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 revenues of $2.85 billion, up 13.1% year on year. This print met analysts’ expectations. More broadly, it was a slower quarter as it logged a slight miss of analysts’ EBITDA estimates and same-store sales in line with analysts’ estimates.
The stock is down 18% since reporting and currently trades at $48.37.
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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