As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the modern fast food industry, including Chipotle (NYSE: CMG) and its peers.

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 6 modern fast food stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.4%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 $3.00 billion, up 7.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates and revenue in line with analysts’ estimates.

"While we continue to see persistent macroeconomic pressures, our extraordinary value proposition and brand strength remain strong," said Scott Boatwright, Chief Executive Officer, Chipotle.

Unsurprisingly, the stock is down 10.5% since reporting and currently trades at $35.64.

Is now the time to buy Chipotle? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: 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 $367.4 million, up 15.9% year on year, outperforming analysts’ expectations by 1%. The business had a very strong quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ EBITDA estimates.

Shake Shack achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.6% since reporting. It currently trades at $82.05.

Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $172.4 million, flat year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations significantly.

Sweetgreen delivered the slowest revenue growth in the group. Interestingly, the stock is up 11.2% since the results and currently trades at $6.95.

Read our full analysis of Sweetgreen’s results here.

Portillo's (NASDAQ: PTLO)

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Portillo's reported revenues of $181.4 million, up 1.8% year on year. This print missed analysts’ expectations by 0.7%. In spite of that, it was a strong quarter as it put up a beat of analysts’ EPS estimates and a solid beat of analysts’ same-store sales estimates.

The stock is down 11.7% since reporting and currently trades at $4.63.

Read our full, actionable report on Portillo's here, it’s free for active Edge members.

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 $292.2 million, up 19.9% year on year. This result was in line with analysts’ expectations. However, it was a slower quarter as it logged full-year EBITDA guidance missing analysts’ expectations and a slight miss of analysts’ same-store sales estimates.

CAVA achieved the fastest revenue growth among its peers. The stock is up 1.8% since reporting and currently trades at $52.61.

Read our full, actionable report on CAVA here, it’s free for active Edge members.

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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