Restaurant stocks expected to have strong Q2 results, offset by high costs like food inflation

From Nasdaq: 2024-07-19 08:44:00

Restaurant companies are expected to have strong second-quarter results due to increased menu prices, higher check sizes, and expansion efforts. Partnerships with delivery services have been beneficial along with digital innovations like self-service kiosks. Off-premise sales have risen, with ghost kitchens receiving positive feedback. Earnings for the Retail-Wholesale sector are projected to increase by 7.3%.

While second-quarter results are expected to be positive, high costs like food inflation and wages may impact margins. Companies like BJ’s Restaurants and Wingstop Inc. are expected to surpass estimates. Utilizing our proprietary methodology, Earnings ESP, alongside a favorable Zacks Rank, can help in selecting outperforming stocks. Offsetting increased expenses is crucial for maintaining profitability in the competitive restaurant industry.

BJ’s Restaurants, Wingstop Inc., and Chipotle Mexican Grill are likely to beat estimates. BJ’s Restaurants will report on July 25 with an expected decline in earnings. Wingstop will report on July 31, with an anticipated growth in earnings. Chipotle will report on July 24, with increased food and beverage revenues and delivery service revenues.

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Read more at Nasdaq:: 3 Restaurant Stocks Poised to Deliver Q2 Earnings Beat