Spotting Winners: Bloomin' Brands (NASDAQ:BLMN) And Sit-Down Dining Stocks In Q2
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how sit-down dining stocks fared in Q2, starting with Bloomin' Brands (NASDAQ:BLMN).
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 13 sit-down dining stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Sit-Down Dining stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
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 $1.12 billion, down 2.9% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts’ earnings estimates.
Bloomin' Brands delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 14.1% since reporting and currently trades at $15.72.
Read our full report on Bloomin' Brands here, it’s free.
Best Q2: 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 $349.9 million, flat year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 11.7% since reporting. It currently trades at $32.90.
Is now the time to buy BJ's? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $115.9 million, flat year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 21.4% since the results and currently trades at $6.03.
Read our full analysis of Denny’s results here.
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 $172.5 million, up 107% year on year. This print missed analysts’ expectations by 3.3%. Overall, it was a slower quarter as it also produced full-year revenue guidance missing analysts’ expectations.
The ONE Group achieved the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is down 12.6% since reporting and currently trades at $3.47.
Read our full, actionable report on The ONE Group here, it’s free.
First Watch (NASDAQ:FWRG)
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
First Watch reported revenues of $258.6 million, up 19.5% year on year. This number was in line with analysts’ expectations. Overall, it was a strong quarter as it also produced a solid beat of analysts’ earnings estimates.
The stock is down 4.8% since reporting and currently trades at $13.59.
Read our full, actionable report on First Watch here, it’s free.
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