Looking back on sit-down dining stocks’ Q1 earnings, we examine this quarter’s best and worst performers, 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 11 sit-down dining stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.3% below.
Luckily, sit-down dining stocks have performed well with share prices up 16.9% on average 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 $211.1 million, up 148% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations.
The ONE Group scored the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 35.3% since reporting and currently trades at $4.20.
Is now the time to buy The ONE Group? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $1.43 billion, up 27.2% year on year, outperforming analysts’ expectations by 2.6%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Brinker International pulled off the highest full-year guidance raise among its peers. The stock is down 9.2% since reporting. It currently trades at $145.80.
Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $282.2 million, up 16.4% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 9.9% since the results and currently trades at $16.75.
Read our full analysis of First Watch’s results here.
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 $1.45 billion, up 9.6% year on year. This print beat analysts’ expectations by 0.6%. Zooming out, it was a mixed quarter as it also recorded same-store sales in line with analysts’ estimates but a miss of analysts’ EBITDA estimates.
The stock is up 10.2% since reporting and currently trades at $190.31.
Read our full, actionable report on Texas Roadhouse here, it’s free.
Darden (NYSE: DRI)
Founded in 1968 as Red Lobster, Darden (NYSE: DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Darden reported revenues of $3.16 billion, up 6.2% year on year. This result lagged analysts' expectations by 1.7%. It was a slower quarter as it also produced a slight miss of analysts’ same-store sales estimates.
Darden had the weakest performance against analyst estimates among its peers. The stock is up 8.2% since reporting and currently trades at $203.50.
Read our full, actionable report on Darden here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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