As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sit-down dining industry, including The ONE Group (NASDAQ: STKS) and its peers.
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 12 sit-down dining stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 5.4% below.
While some sit-down dining stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.7% since the latest earnings results.
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 $207.4 million, up 20.2% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates.
The ONE Group delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 13.4% since reporting and currently trades at $2.64.
Read our full report on The ONE Group here, it’s free.
Best Q2: Kura Sushi (NASDAQ: KRUS)
Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ: KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.
Kura Sushi reported revenues of $73.97 million, up 17.3% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a beat of analysts’ EPS and EBITDA estimates.
Kura Sushi achieved the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.4% since reporting. It currently trades at $79.50.
Is now the time to buy Kura Sushi? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $1.00 billion, down 10.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
Bloomin' Brands delivered the slowest revenue growth in the group. As expected, the stock is down 23.5% since the results and currently trades at $6.87.
Read our full analysis of Bloomin' Brands’s results here.
Brinker International (NYSE: EAT)
Founded by Norman Brinker in Dallas, Brinker International (NYSE: EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.46 billion, up 21% year on year. This number topped analysts’ expectations by 1.6%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ same-store sales estimates and full-year EPS guidance beating analysts’ expectations.
Brinker International achieved the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $154.01.
Read our full, actionable report on Brinker International here, it’s free.
Texas Roadhouse (NASDAQ: TXRH)
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ: TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Texas Roadhouse reported revenues of $1.51 billion, up 12.7% year on year. This print beat analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ same-store sales estimates but a miss of analysts’ EBITDA estimates.
The stock is down 10% since reporting and currently trades at $166.55.
Read our full, actionable report on Texas Roadhouse here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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