Tariffs are not a major issue, with some brands facing challenges and others seeing growth.

From Yahoo Finance: 2025-03-21 21:30:00

J.P. Morgan analyst John Ivankoe discussed the impact of tariffs on the restaurant sector, highlighting winners and losers at the J.P. Morgan Las Vegas forum. The focus for companies like Bloomin’ Brands Inc, CAVA Group Inc, Brinker International Inc, and Sweetgreen Inc is on doing “fewer things better” and reinvesting in customer and employee experiences. Stock volatility has created opportunities, with a 4.3% yield helping global QSR valuations. Analyst recommended fresh investments in Dutch Bros Inc, Starbucks Corp, and CAVA. McDonald’s Corp and Restaurant Brands International Inc are fairly valued, while Yum! Brands Inc exceeded expectations.

The analyst upgraded shares of CAVA to Overweight due to its expansion potential in the U.S. and strong cash flow generation. Chipotle Mexican Grill, Inc and Brinker International Inc remain Neutral due to high valuations. Brands like Sweetgreen Inc and Krispy Kreme Inc face sales and profit challenges. The U.S. restaurant labor market remains stable, with consumer confidence declining and a focus on discretionary spending. Large QSR brands like McDonald’s Corp and Domino’s Pizza Inc report weaker performance among low-income consumers, while high-growth brands like CAVA are seeing growth in the lowest income quartiles.

Tariffs are less of an issue for the restaurant sector, but related inflation could impact consumer staple commodities like avocados, seasonal produce, and coffee. Total industry supply growth has remained resilient, with attention on building strong brands and scaling operations. Despite future AI-driven opportunities, the top 500 chains still dominate industry sales. The analyst emphasized the importance of sourcing talent and retention, especially with rapid tech adoption in and out of stores.



Read more at Yahoo Finance: Is Tariff An Issue For Restaurant Sector? J.P. Morgan Highlights Winners & Losers