Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Potbelly (NASDAQ: PBPB) 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 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 Q1. As a group, revenues were in line with analysts’ consensus estimates.
Luckily, modern fast food stocks have performed well with share prices up 11.9% on average since the latest earnings results.
Best Q1: Potbelly (NASDAQ: PBPB)
With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ: PBPB) today is a chain known for its toasty sandwiches.
Potbelly reported revenues of $113.7 million, up 2.3% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “We are pleased with the great start to 2025 and our strong finish to the first quarter which showcased the strength of the Potbelly brand. Not only did we deliver strong system-wide sales growth including positive same-store sales growth that exceeded our expectations, but we also posted another quarter of strong profitability. Moreover, we made significant progress in our franchise development efforts by delivering on our promise to open four new franchise shops during the first quarter, which included new shops from three different franchise groups across two different states.”
Potbelly pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 28.6% since reporting and currently trades at $10.98.
Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it’s free.
CAVA (NYSE: CAVA)
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 $331.8 million, up 28.1% year on year, outperforming analysts’ expectations by 1.2%. The business had a strong quarter with an impressive beat of analysts’ EPS estimates and a decent beat of analysts’ EBITDA estimates.
CAVA delivered the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 22.6% since reporting. It currently trades at $76.75.
Is now the time to buy CAVA? Access our full analysis of the earnings results here, it’s free.
Shake Shack (NYSE: SHAK)
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE: SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Shake Shack reported revenues of $320.9 million, up 10.5% year on year, falling short of analysts’ expectations by 2%. It was a softer quarter as it posted a miss of analysts’ same-store sales and EBITDA estimates.
Interestingly, the stock is up 45.5% since the results and currently trades at $127.66.
Read our full analysis of Shake Shack’s results here.
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 $166.3 million, up 5.4% year on year. This print topped analysts’ expectations by 0.9%. More broadly, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates.
Sweetgreen had the weakest full-year guidance update among its peers. The stock is down 27.7% since reporting and currently trades at $13.13.
Read our full, actionable report on Sweetgreen here, it’s free.
Chipotle (NYSE: CMG)
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 $2.88 billion, up 6.4% year on year. This number lagged analysts' expectations by 2.1%. It was a slower quarter as it also logged a miss of analysts’ same-store sales estimates.
Chipotle had the weakest performance against analyst estimates among its peers. The stock is up 6.2% since reporting and currently trades at $51.77.
Read our full, actionable report on Chipotle here, it’s free.
Market Update
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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