We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights Arcos Dorados, BBQ Holdings, The ONE Group and Potbelly
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 20, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Arcos Dorados Holdings Inc. (ARCO - Free Report) , BBQ Holdings, Inc. , The ONE Group Hospitality, Inc. (STKS - Free Report) and Potbelly Corp. (PBPB - Free Report) .
Here are highlights from Friday’s Analyst Blog:
4 Stocks to Buy on Steady Growth in Restaurant Sales
Retail sales declined for the first time in five months in May. While rising prices have been a concern that has led people to spend cautiously, another reason behind the decline is that people lately have been spending on services more than goods.
This possibly is a reason that sales at U.S. restaurants are growing despite a decline in retail sales, sales at bars and restaurants are the only services that are included as part of retail sales. Given this, investing in restaurant stocks like Arcos Dorados Holdings Inc., BBQ Holdings, Inc., The ONE Group Hospitality, Inc. and Potbelly Corp. are likely to benefit in the near term.
Restaurant Sales Grow
According to the latest report from the U.S. Census Bureau, U.S. bars and restaurants generated $84.98 billion in revenues in May, up 0.7% month over month. This comes despite a 0.3% decline in overall retail sales.
People lately have been spending cautiously on fuel, food and other necessities as the price of consumer goods continues to rise. This has been a major reason behind retail sales taking a hit in May. Higher demand for goods made people spend despite rising prices, which so far had been helping the retail sector.
However, the sector couldn't hold on to the momentum and sales plunged finally after five months. The scene at restaurants, however, has been completely different. Although people are spending cautiously on luxuries, they are spending a lot at restaurants.
The gains at U.S. bars and restaurants in May follow strong sales in March and April, when revenues of $84.42 billion and $82.39 billion, respectively, were earned. This shows the steady growth in sales at the eateries.
Restaurant Sales Poised to Grow
A separate report from Mastercard SpendingPulse shows that restaurant sales jumped a whopping 26.7% in May on a year-over-year basis. Higher spending at bars and restaurants also proves that people have started spending more on services once again.
The peak of the pandemic and the months following that saw a change in the trend when people spent more on goods and less on services as the economy remained only partially open. This finally started changing at the beginning of the year when the economy started operating at the optimum level.
With the majority of the Americans now fully vaccinated, most of the COVID-related restrictions have now been lifted and people are stepping out of their homes more confidently. This has seen people start traveling once again and are planning holidays, going to amusement parks and eating out at restaurants.
As a result, spending on the services sector is again on the rise, although rising prices have somewhat slowed down the pace of growth. However, the services sector is still growing. The U.S. services sector PMI came up with a reading of 55.9%. Anything above 50 signals higher growth.
This shows that people are still quite aggressively spending on services and is an indication that spending at restaurants and bars will continue to grow.
Our Choices
Given the situation, it would be ideal to invest in restaurant stocks. We have shortlisted four restaurant stocks, each carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's, with its operations divided in Brazil; North Latin America division; South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.
Arcos Dorados' expected earnings growth rate for the current year is 83.3%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. ARCO has a Zacks Rank #2.
BBQ Holdings, Inc. operates and franchises barbeque restaurants and blues clubs. BBQ currently owns locations and franchises locations in Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Utah, Maryland and Virginia and has signed development agreements for an additional franchised locations. BBQ Holdings' menu features award-winning barbecued and grilled meats, an ample selection of salads, side items, sandwiches and unique desserts.
BBQ Holdings' expected earnings growth rate for the current year is 67.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. BBQ sports a Zacks Rank #2.
The ONE Group Hospitality, Inc. operates as a hospitality company. STKS develops, manages and operates a portfolio of high-energy restaurants, lounges and bars. The ONE Group Hospitality also provides food and beverage hospitality solutions. STKS' primary restaurant brand is STK, which is a steakhouse concept with locations in metropolitan cities throughout the United States and in London.
The ONE Group Hospitality's expected earnings growth rate for the current year is 27.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. STKS has a Zacks Rank #2.
Potbelly Corp. is a neighborhood sandwich concept. PBPB manages establishments for consuming food on premises to offer sandwiches, salads, soups, chili, chips, cookies, ice cream and smoothies. It serves customers throughout the United States.
Potbelly Corporation's expected earnings growth rate for the current year is more than 100%. Shares of PBPB have gained 2.8% in the past six months. Potbelly Corporation has a Zacks Rank #2.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights Arcos Dorados, BBQ Holdings, The ONE Group and Potbelly
For Immediate Release
Chicago, IL – June 20, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Arcos Dorados Holdings Inc. (ARCO - Free Report) , BBQ Holdings, Inc. , The ONE Group Hospitality, Inc. (STKS - Free Report) and Potbelly Corp. (PBPB - Free Report) .
Here are highlights from Friday’s Analyst Blog:
4 Stocks to Buy on Steady Growth in Restaurant Sales
Retail sales declined for the first time in five months in May. While rising prices have been a concern that has led people to spend cautiously, another reason behind the decline is that people lately have been spending on services more than goods.
This possibly is a reason that sales at U.S. restaurants are growing despite a decline in retail sales, sales at bars and restaurants are the only services that are included as part of retail sales. Given this, investing in restaurant stocks like Arcos Dorados Holdings Inc., BBQ Holdings, Inc., The ONE Group Hospitality, Inc. and Potbelly Corp. are likely to benefit in the near term.
Restaurant Sales Grow
According to the latest report from the U.S. Census Bureau, U.S. bars and restaurants generated $84.98 billion in revenues in May, up 0.7% month over month. This comes despite a 0.3% decline in overall retail sales.
People lately have been spending cautiously on fuel, food and other necessities as the price of consumer goods continues to rise. This has been a major reason behind retail sales taking a hit in May. Higher demand for goods made people spend despite rising prices, which so far had been helping the retail sector.
However, the sector couldn't hold on to the momentum and sales plunged finally after five months. The scene at restaurants, however, has been completely different. Although people are spending cautiously on luxuries, they are spending a lot at restaurants.
The gains at U.S. bars and restaurants in May follow strong sales in March and April, when revenues of $84.42 billion and $82.39 billion, respectively, were earned. This shows the steady growth in sales at the eateries.
Restaurant Sales Poised to Grow
A separate report from Mastercard SpendingPulse shows that restaurant sales jumped a whopping 26.7% in May on a year-over-year basis. Higher spending at bars and restaurants also proves that people have started spending more on services once again.
The peak of the pandemic and the months following that saw a change in the trend when people spent more on goods and less on services as the economy remained only partially open. This finally started changing at the beginning of the year when the economy started operating at the optimum level.
With the majority of the Americans now fully vaccinated, most of the COVID-related restrictions have now been lifted and people are stepping out of their homes more confidently. This has seen people start traveling once again and are planning holidays, going to amusement parks and eating out at restaurants.
As a result, spending on the services sector is again on the rise, although rising prices have somewhat slowed down the pace of growth. However, the services sector is still growing. The U.S. services sector PMI came up with a reading of 55.9%. Anything above 50 signals higher growth.
This shows that people are still quite aggressively spending on services and is an indication that spending at restaurants and bars will continue to grow.
Our Choices
Given the situation, it would be ideal to invest in restaurant stocks. We have shortlisted four restaurant stocks, each carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's, with its operations divided in Brazil; North Latin America division; South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.
Arcos Dorados' expected earnings growth rate for the current year is 83.3%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. ARCO has a Zacks Rank #2.
BBQ Holdings, Inc. operates and franchises barbeque restaurants and blues clubs. BBQ currently owns locations and franchises locations in Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Utah, Maryland and Virginia and has signed development agreements for an additional franchised locations. BBQ Holdings' menu features award-winning barbecued and grilled meats, an ample selection of salads, side items, sandwiches and unique desserts.
BBQ Holdings' expected earnings growth rate for the current year is 67.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. BBQ sports a Zacks Rank #2.
The ONE Group Hospitality, Inc. operates as a hospitality company. STKS develops, manages and operates a portfolio of high-energy restaurants, lounges and bars. The ONE Group Hospitality also provides food and beverage hospitality solutions. STKS' primary restaurant brand is STK, which is a steakhouse concept with locations in metropolitan cities throughout the United States and in London.
The ONE Group Hospitality's expected earnings growth rate for the current year is 27.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. STKS has a Zacks Rank #2.
Potbelly Corp. is a neighborhood sandwich concept. PBPB manages establishments for consuming food on premises to offer sandwiches, salads, soups, chili, chips, cookies, ice cream and smoothies. It serves customers throughout the United States.
Potbelly Corporation's expected earnings growth rate for the current year is more than 100%. Shares of PBPB have gained 2.8% in the past six months. Potbelly Corporation has a Zacks Rank #2.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.