As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sit-down dining industry, 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 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 3.1% since the latest earnings results.
Brinker International (NYSE: EAT)
Founded by Norman Brinker in Dallas, Brinker International (NYSE: EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.46 billion, up 21% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ same-store sales estimates and full-year EPS guidance beating analysts’ expectations.
"Chili's delivered another strong quarter with sales +24% driven by traffic of +16%," said Kevin Hochman, President & CEO of Brinker International, "We now have delivered a Q4 2 year sales growth of +39% and 3-year of +45%.
Brinker International pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 2.8% since reporting and currently trades at $159.50.
Is now the time to buy Brinker International? 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 scored 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 10.1% since reporting. It currently trades at $78.03.
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 17.4% since the results and currently trades at $7.42.
Read our full analysis of Bloomin' Brands’s results here.
BJ's (NASDAQ: BJRI)
Founded in 1978 in California, BJ’s Restaurants (NASDAQ: BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $365.6 million, up 4.5% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $35.55.
Read our full, actionable report on BJ's 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 $207.4 million, up 20.2% year on year. This result came in 0.7% below analysts' expectations. It was a slower quarter as it also recorded a significant miss of analysts’ EBITDA estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.
The ONE Group had the weakest performance against analyst estimates among its peers. The stock is down 10.8% since reporting and currently trades at $2.72.
Read our full, actionable report on The ONE Group here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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