As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at modern fast food stocks, starting with CAVA (NYSE: CAVA).
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 Q4. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15% since the latest earnings results.
Best Q4: 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 $227.4 million, up 28.3% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS and same-store sales estimates.
“2024 was another year of extraordinary growth and success for CAVA as we established Mediterranean as the next major cultural cuisine category and delivered our unique value proposition, that is clearly resonating with modern consumers. CAVA Same Restaurant Sales grew 13.4% in 2024, including traffic growth of nearly 9%. We opened 58 net new restaurants and, driven by our powerful unit economic engine, generated average unit volume of $2.9 million. In addition, we continued to execute across our strategic initiatives. The launch of our grilled steak main exceeded our expectations, we rolled out a new labor model to deliver a better operator and guest experience, and, through our reimagined loyalty program, we gave guests more reasons to come to CAVA and come back more often,” said Brett Schulman, Co-Founder and CEO.
CAVA scored the biggest analyst estimates beat and fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 15.1% since reporting and currently trades at $84.35.
We think CAVA is a good business, but is it a buy today? Read our full report here, it’s free.
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 $116.6 million, down 7.3% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 20.3% since reporting. It currently trades at $9.42.
Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $160.9 million, up 5.1% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.
Sweetgreen delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 3.9% since the results and currently trades at $24.10.
Read our full analysis of Sweetgreen’s results here.
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 $328.7 million, up 14.8% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is down 18.4% since reporting and currently trades at $90.70.
Read our full, actionable report on Shake Shack 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 $2.85 billion, up 13.1% year on year. This number met analysts’ expectations. Aside from that, it was a slower quarter as it recorded a slight miss of analysts’ EBITDA estimates and same-store sales in line with analysts’ estimates.
The stock is down 17.6% since reporting and currently trades at $48.60.
Read our full, actionable report on Chipotle here, it’s free.
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