The Wendy’s Company, together with its subsidiaries, operates as a quick-service restaurant company in the United States and internationally. El Pollo Loco struggled a bit more than some of its competitors in 2020, but it has been turning the corner in 2021. For the first quarter of 2021, the company’s systemwide sales grew 7.4%. Although its second-quarter results have yet to be reported, the company noted that as of April 28, year-over-year sales increased 39.1%, with a 13.5% increase on a two-year basis. Although the company only ranks No. 35 in terms of U.S. sales, analysts have a buy rating with a price target of about 13% above current levels. “I’m incredibly proud of the work that has been accomplished since I joined Chipotle in 2018,” Niccol said in a statement.
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Jollibee Foods Corporation also owns well-known brands Smashburger and Coffee Bean & Tea Leaf. But McDonald’s and Chipotle offer a valuable mix of market share growth and high profit margins that are rooted in steadily rising customer satisfaction. The chain has to earn those industry-leading margins, though, by continually raising the bar on food quality, customer service, and convenience. “Running great restaurants is fundamental to our business momentum,” CEO Chris Kempczinski told investors in late April.
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You know what you’re going to get with McDonald’s, and you know you won’t pay too much. Domino’s Pizza was another big winner throughout the pandemic, and its technological advancements may help sustain growth in the years to come. According to The Wall Street Journal, companies with the best touch-free technology already in place were able to best adapt to the COVID-19 environment. As the effects of the pandemic are still being felt in the restaurant industry, these technological advances continue to offer Domino’s a competitive advantage. Fast-food restaurants struggled like nearly all businesses during the heart of the pandemic in 2020. However, they have some inherent advantages against more traditional sit-down restaurants.
The Wendy’s Company (WEN)
Given that bright outlook on sales and earnings, it makes sense that the stock would be valued at a premium. Yet investors likely won’t regret paying a bit more to own this high-performing fast-food business. McDonald’s just reported a 13% increase in comparable-store sales, marking accelerating growth trends compared to late last year. Profits jumped 14%, too, with help from selective price increases. That fact is obvious from its operating margin, which is closer to a rate that a dominant software company might enjoy. Mickey D’s franchise and rental fees allow it to convert over 40% of sales to operating earnings each year, in fact, while most restaurant struggle with single-digit margins.
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Starting Monday, Wendy’s will offer a $3 breakfast combination meal deal, following a similar yet limited value meal option by McDonald’s. When people have a little extra cash, they indulge in offerings from these companies. The stock is up 16.9% since reporting and currently trades at $102.39.
- Wendy’s is aiming to have as many as 9,000 restaurants in operation by the end of 2025.
- Burger King suffered more than some other fast-food restaurants during the pandemic, with sales actually falling 7.9% in the company’s fourth quarter.
- Quick service, low prices, and constant menu innovation will always be things consumers crave.
- Domino’s Pizza is listed on the NYSE, has a trailing 12-month revenue of around USD$4.6 billion and employs 6,500 staff.
- Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products.
- The stock has taken a huge hit, but Beyond Meat is a stock to consider if you believe in the long-term potential of plant-based protein.
Niccol will start in his new leadership role Sept. 9, replacing Starbucks CEO Laxman Narasimhan, who stepped down “with immediate effect,” the coffee chain said in a press release. Niccol’s last day as CEO of Chipotle will be Aug. 31, the restaurant announced in a separate press release. Chipotle CEO Brian Niccol will be leaving the fast casual food chain to take over as the chief executive of Starbucks, the companies announced Tuesday.
“I’m excited for the new opportunity to lead the business moving forward,” Boatwright said in a statement. “We have a world-class organization full of talented leaders who are passionate about our brand and purpose.” Niccol, who is credited with turning around Taco Bell during his prior tenure as its CEO, took the reins from Chipotle founder Steve Ells. In one of his first tests as CEO, he helped the chain respond to a foodborne illness scandal by retraining all the chain’s workers nationwide.
Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. Yum! Brands, Inc. , together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. The best food companies have strong brands that compel consumers to pay up for their products, and they also enjoy economies of scale that keep costs low. Pricing power and cost advantages are particularly important now, with inflation squeezing budgets and supply chain costs rising.
A slew of fast-food chains, from McDonald’s to Taco Bell, have $5 meal deals to try to win back customers. Runaway menu prices have scared away low-income consumers, and discounts may be the only way … General Mills stock has soared over the past couple of years, but it remains reasonably priced.
And, because many fast food chains focus on offering great value, a tough economic environment poses fewer risks. Tyson certainly doesn’t have the pricing power of a packaged food company with well-known brands, given that meat is largely a commodity. Meat processing in the U.S. is highly concentrated among a small number of companies such as Tyson, which own a relatively small number of massive facilities. The company’s results are partly dictated by supply and demand for beef, pork, and chicken, with margins heavily influenced by pricing. Restaurant Brands provides investors with the best value of the fast food stocks listed here.
Wendy’s is aiming to have as many as 9,000 restaurants in operation by the end of 2025. 2021 was a bumper year for Wendy’s, with same-restaurant sales soaring 10%. About 8.5% of U.S. sales now come from Wendy’s breakfast offerings, no small feat given that McDonald’s is the go-to fast food breakfast option for many commuters. The granddaddy of the fast food industry, McDonald’s has been serving its iconic burgers and fries since 1955.
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McDonald’s generated $23.2 billion of revenue in 2021, with the majority coming from fees paid by franchisees. McDonald’s does operate some of its own restaurants, giving it the flexibility to try new things before pushing them out to franchised locations. The company took a hit during the worst of the pandemic, but business bounced back last year. McDonald’s generated net income of $7.5 billion, giving it profit margins that are the envy of the fast food industry. Chipotle is the 11th-largest quick-serve restaurant in the United States in terms of sales, according to the QSR 50.
Interestingly, the stock is up 32.9% since the results and currently trades at $34.90. Access our full analysis of the earnings results here, it’s free. The stock is up 7.4% since reporting and currently trades at $55.60.