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Restaurant Sales Jump YoY in July: 5 Solid Stocks to Buy
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Americans are spending more on services than goods, which resulted in retail sales declining more than expected in July. With millions now vaccinated, people have started stepping out of their homes. This is getting reflected in soaring restaurant sales.
Bars and restaurants had taken a bad hit last year due to the pandemic but sales have been rebounding over the past few months. In fact, sales are now higher than the pre-pandemic level and as the economy reopens further, the industry is expected to flourish.
Restaurant Sales Increase
Sales at restaurants and bars grew in July with consumers spending 1.7% higher than the month earlier, the Commerce Department said on Aug 17. On a year-over-year basis, sales at restaurants and bars grew a whopping 38.4% in July.
July growth in sales follows a 2.3% jump in June, indicating that people have once again started visiting eating and drinking establishments. Interestingly, the July jump in restaurant sales comes despite a 1.1% decline in overall retail sales for the month.
Last year, the service industry took a bad hit as people worked and learnt from home and spent more on electronic and essential goods. Retail sales have been slowing for the past few months but spending at bars and restaurants has been on the rise.
Restaurant Sales Poised to Grow
With millions vaccinated now, people are now more confident and physically visiting restaurants. July’s jump in sales also indicates that the confidence of the people hasn’t dented much despite a surge in cases of Delta variant of the coronavirus over the past month.
Also, traveling is on the rise once again and people are planning holidays. Thus, restaurant sales are likely to get a further boost in the coming months. Besides, hiring is also at a record high. Restaurants have started hiring once again to meet the growing demand and footfall.
According to a Restaurant Business Online article, citing a report by the National Restaurant Association, U.S. restaurant sales are fast bouncing back to normal after declining 19.2% in 2020, which was also the most challenging year for the industry.
The Wendy’s Company (WEN - Free Report) operates through its subsidiary holding company — Wendy’s Restaurants, LLC. The fast-food chain through its subsidiary operates as a franchisor of the Wendy's restaurant system.
The company’s expected earnings growth rate for the current year is 42.1%. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the past 30 days.
Jack In The Box Inc. (JACK - Free Report) operates and franchises through Jack In The Box quick-service restaurants, and is one of the nation’s largest hamburger chains. Based on the number of restaurants, the company’s top 10 markets comprise nearly 70% of the total system.
The company’s expected earnings growth rate for the current year is 54.8%. The Zacks Consensus Estimate for current-year earnings has improved 6.2% over the past 30 days.
Yum Brands, Inc. (YUM - Free Report) is the global leader in multi-branding and offers consumers more choice and convenience at one outlet. The company presently reports through four segments – KFC (44.8% of total revenues in first-quarter 2020), Pizza Hut (18.6%), Taco Bell (35.9%) and Habit Burger Grill (0.7%).
The company’s expected earnings growth rate for next year is 22.4%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 30 days.
Papa John’s International, Inc. (PZZA - Free Report) operates and franchises pizza delivery and carryout restaurants in the United States and other specific international markets. Its dine-in and delivery restaurants operate under the brand name Papa John’s.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 10.6% over the past 30 days.
Brinker International, Inc. (EAT - Free Report) primarily owns, operates, develops and franchises various restaurants under Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) brands.
The company’s expected earnings growth rate for the current year is 84.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 30 days.
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Restaurant Sales Jump YoY in July: 5 Solid Stocks to Buy
Americans are spending more on services than goods, which resulted in retail sales declining more than expected in July. With millions now vaccinated, people have started stepping out of their homes. This is getting reflected in soaring restaurant sales.
Bars and restaurants had taken a bad hit last year due to the pandemic but sales have been rebounding over the past few months. In fact, sales are now higher than the pre-pandemic level and as the economy reopens further, the industry is expected to flourish.
Restaurant Sales Increase
Sales at restaurants and bars grew in July with consumers spending 1.7% higher than the month earlier, the Commerce Department said on Aug 17. On a year-over-year basis, sales at restaurants and bars grew a whopping 38.4% in July.
July growth in sales follows a 2.3% jump in June, indicating that people have once again started visiting eating and drinking establishments. Interestingly, the July jump in restaurant sales comes despite a 1.1% decline in overall retail sales for the month.
Last year, the service industry took a bad hit as people worked and learnt from home and spent more on electronic and essential goods. Retail sales have been slowing for the past few months but spending at bars and restaurants has been on the rise.
Restaurant Sales Poised to Grow
With millions vaccinated now, people are now more confident and physically visiting restaurants. July’s jump in sales also indicates that the confidence of the people hasn’t dented much despite a surge in cases of Delta variant of the coronavirus over the past month.
Also, traveling is on the rise once again and people are planning holidays. Thus, restaurant sales are likely to get a further boost in the coming months. Besides, hiring is also at a record high. Restaurants have started hiring once again to meet the growing demand and footfall.
According to a Restaurant Business Online article, citing a report by the National Restaurant Association, U.S. restaurant sales are fast bouncing back to normal after declining 19.2% in 2020, which was also the most challenging year for the industry.
Our Choices
Given the situation, it makes good sense to invest in restaurant stocks. We have handpicked stocks of five restaurant players, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Wendy’s Company (WEN - Free Report) operates through its subsidiary holding company — Wendy’s Restaurants, LLC. The fast-food chain through its subsidiary operates as a franchisor of the Wendy's restaurant system.
The company’s expected earnings growth rate for the current year is 42.1%. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the past 30 days.
Jack In The Box Inc. (JACK - Free Report) operates and franchises through Jack In The Box quick-service restaurants, and is one of the nation’s largest hamburger chains. Based on the number of restaurants, the company’s top 10 markets comprise nearly 70% of the total system.
The company’s expected earnings growth rate for the current year is 54.8%. The Zacks Consensus Estimate for current-year earnings has improved 6.2% over the past 30 days.
Yum Brands, Inc. (YUM - Free Report) is the global leader in multi-branding and offers consumers more choice and convenience at one outlet. The company presently reports through four segments – KFC (44.8% of total revenues in first-quarter 2020), Pizza Hut (18.6%), Taco Bell (35.9%) and Habit Burger Grill (0.7%).
The company’s expected earnings growth rate for next year is 22.4%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 30 days.
Papa John’s International, Inc. (PZZA - Free Report) operates and franchises pizza delivery and carryout restaurants in the United States and other specific international markets. Its dine-in and delivery restaurants operate under the brand name Papa John’s.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 10.6% over the past 30 days.
Brinker International, Inc. (EAT - Free Report) primarily owns, operates, develops and franchises various restaurants under Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) brands.
The company’s expected earnings growth rate for the current year is 84.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 30 days.