Modern Fast Food Stock Q2 Highlights: Potbelly (NASDAQ:PBPB)

Financial results often indicate where a company is headed in the coming months. With the second quarter now behind us, let’s take a look at Potbelly (NASDAQ:PBPB) and its peers.

Modern fast food is a relatively new category that falls somewhere between traditional fast food and sit-down restaurants. These establishments offer a more varied menu at higher prices than traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers who value quality. These restaurants capitalize on the perception that your drive-thru burger and fries restaurant is detrimental to your health due to inferior ingredients.

All 6 modern fast-food stocks we track had solid Q2s, with revenues beating analyst consensus estimates by 1.5% on average. Stocks, particularly those trading at higher multiples, finished 2023 strong, but 2024 saw periods of volatility. Mixed signals on inflation led to uncertainty around rate cuts, but modern fast-food stocks performed well, with share prices up 10.5% on average since previous earnings results.

Potbelly (NASDAQ:PBPB)

With a unique origin story where the company started as an antique store, Potbelly (NASDAQ: PBPB) is today a chain known for its grilled sandwiches.

Potbelly reported revenue of $119.7 million, down 5.5% from a year earlier, in line with analyst expectations. Overall, it was a very good quarter for the company, with an impressive beat on analysts’ gross margin estimates and a solid beat on analysts’ earnings estimates.

Bob Wright, President and CEO of Potbelly Corporation, said, “The hard work and dedication of our team members during the second quarter allowed us to continue our growth in three key areas of the business. We increased comparable store sales by 0.4%, recorded our 13th consecutive quarter of year-over-year store margin expansion and opened four new stores in addition to our franchise commitments for an additional 22 stores.”

Potbelly posted the slowest revenue growth of the entire group. The stock is up 5.3% since the release of the report and is currently trading at $7.21.

Is Now the Time to Buy Potbelly? Access our full financial analysis here, it’s free.

Best T2: Wingstop (NASDAQ:WING)

A passion project of two Texas wing enthusiasts, Wingstop (NASDAQ: WING) is a popular fast food restaurant chain known for its flavorful, crispy chicken wings offered in a variety of sauces and seasonings.

Wingstop reported revenue of $155.7 million, up 45.3% from a year earlier and beating analysts’ expectations by 7.3%. It was a stellar quarter for the company, with an impressive showing compared to analysts’ estimates for both gross margin and earnings.

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Wingstop beat analysts’ expectations and posted the fastest revenue growth among its peers. While it had a strong quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.6% since the release of the report. It is currently trading at $371.48.

Is it time to buy Wingstop? Access our full financial analysis here, it’s free.

Soft Green (NYSE:SG)

Founded in 2007 by three Georgetown University alumni, Sweetgreen (NYSE: SG) is a fast-casual restaurant chain known for its healthy salads and bowls.

Sweetgreen reported revenue of $184.6 million, up 21.1% from a year earlier and beating analysts’ expectations by 2.1%. It was a mixed quarter for the company, with gross margin well above analysts’ estimates but earnings below analysts’ estimates.

Interestingly, the stock is up 32.9% since the earnings release and is currently trading at $34.90.

Read our full analysis of Sweetgreen’s results here.

Chipotle (NYSE:CMG)

Born from a desire to offer fast food with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable menu items.

Chipotle reported revenue of $2.97 billion, up 18.2% from a year earlier and beating analysts’ expectations by 1.1%. Overall, it was a very good quarter for the company, with gross margin and earnings well above analysts’ estimates.

The stock is up 7.4% since the report and is currently trading at $55.60.

Read our full, actionable report on Chipotle here, it’s free.

Shake Shack (NYSE: SHAK)

Launched as a hot dog stand in New York City’s Madison Square Park, Shake Shack (NYSE: SHAK) is a fast food restaurant known for its hamburgers and milkshakes.

Shake Shack reported revenue of $316.5 million, up 16.4% from a year earlier, in line with analysts’ expectations. In perspective, it was a very good quarter for the company, impressively beating analysts’ gross margin estimates and slightly beating analysts’ earnings estimates.

The stock is up 16.9% since the report and is currently trading at $102.39.

Read our full, actionable report on Shake Shack here, it’s free.

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