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Restaurant Stocks' Q2 Earnings on Jul 26: MCD, BJRI & More

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As we are getting into the thick of the Q2 earnings season, the widely popular restaurant industry has been grabbing much of the spotlight.

Last week, a number of restaurant stocks reported earnings and the projections were significantly high for the group. However, the performance of the restaurant stocks has been far from impressive so far.

Among the restaurant behemoths that reported last week, Chipotle Mexican Grill, Inc. (CMG - Free Report) posted lower-than-expected second-quarter results, with both earnings and revenues missing the Zacks Consensus Estimate, given the continued food-safety issues. Starbucks Corporation’s (SBUX - Free Report) third-quarter fiscal 2016 sales growth too disappointed investors. While the company reported in-line earnings, revenues failed to beat the consensus mark.

Meanwhile, though Dunkin' Brands Group, Inc.’s earnings beat the estimates, decrease in sales at company-operated restaurants as well as dwindling ice cream and other products sales limited top-line growth for the company.

However, Domino's Pizza Inc. (DPZ - Free Report) , being the exception, posted robust second-quarter 2016 results, with both earnings and revenues beating the Zacks Consensus Estimate.

Four restaurant companies are set to report their second-quarter numbers on Jul 26. Will these companies manage to put up a decent performance? Let’s take a look at what might be in store for them this quarter:

McDonald's Corp. (MCD - Free Report) posted a positive earnings surprise of 6.03% in the last reported quarter. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 5.70%

MCDONALDS CORP Price and EPS Surprise

MCDONALDS CORP Price and EPS Surprise | MCDONALDS CORP Quote

The company has an Earnings ESP of -1.45% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at $1.38 per share.

The company has been reporting weak traffic trends in certain major international markets. Also, a slowdown in the Chinese economy is hurting sales in the region, thereby hampering the overall top-line performance. We do not expect any significant improvement in Q2 (read more: McDonald's Q2 Earnings: Disappointment in Store?)

BJ's Restaurants, Inc. (BJRI - Free Report) posted a positive earnings surprise of 17.50% last quarter. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 18.52%.

BJ'S RESTAURANT Price and EPS Surprise

BJ'S RESTAURANT Price and EPS Surprise | BJ'S RESTAURANT Quote

For the second quarter, the company has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter is pegged at 57 cents.

Notably, menu innovation, Project Q initiatives, and aggressive marketing and operational strategies have been boosting top and bottom-line growth over the past few quarters.  We expect this trend to continue in Q2 (read more: What's in Store for BJ's Restaurants in Q2 Earnings?).

In the last reported quarter, Buffalo Wild Wings Inc. posted negative earnings surprise of 1.70%. In fact, this casual dining restaurant chain recorded negative earnings surprises in all of the past four quarters, with an average miss of 11.22%.

BUFFALO WLD WNG Price and EPS Surprise

BUFFALO WLD WNG Price and EPS Surprise | BUFFALO WLD WNG Quote

The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the quarter is pegged at $1.26 per share.

Strong market position and new menu launches are likely to drive comps in the to-be-reported quarter. However, the company expects higher operating expenses in Q2, which might hamper the bottom line (read more: Buffalo Wild Wings Q2 Earnings: What's in Store?).

Panera Bread Company recorded a positive earnings surprise of 4.00% last quarter. In fact, the company posted positive earnings surprises in three of the past four quarters, with an average beat of 2.29%.

PANERA BREAD CO Price and EPS Surprise

PANERA BREAD CO Price and EPS Surprise | PANERA BREAD CO Quote

The company has an Earnings ESP of -0.57% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at $1.75 per share.

The company’s Panera 2.0 program, menu innovation and promotional strategies have been driving sales. We expect sales to continue to improve in Q2. However, high costs and massive investments might impact the quarter’s profitability (read more: Panera Bread Q2 Earnings: What's in the Cards?).

Don’t miss out on our full earnings release articles for these stocks, as the actual results might hold some surprises!

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