Could investors be watching these top restaurant stocks in the stock market today?
As we navigate a post-pandemic world, investors may look to the stock market to invest in industries recovering from the pandemic. And one of those industries would be restaurant stocks. Fortunately, eating out has become the norm again with the easing of restrictions. And with more and more customers eating out again, that would theoretically mean better revenue for restaurants. As such, investors could keep an eye on restaurant stocks as we enter another earnings season.
Earlier this week, Wendy’s (NASDAQ: WEN) has announced its entry into the Metaverse. Team up with Meta platform (NASDAQ: FB) Horizon Worlds, Wendy’s has launched a new online community called “Wendyverse”. In the Wendyverse, fans can visit the company’s first virtual reality restaurant. Back on Earth, we have sweetgreen (NYSE:SG). The mission-driven company announced last month that it will open its first ‘Sweetlane’ concept drive-thru within the next year. Launching in Schaumburg, Illinois, the new pilot restaurant will include the addition of the Sweetlane to increase convenience for digital customers. Given all of these developments in the industry, let’s take a look at the top 4 restaurant stocks to watch in the stock market today.
Restaurant inventory to buy [Or Sell] Today
Starting today is FAT brands, a leading multi-brand restaurant franchisee. It strategically develops, markets and acquires restaurant concepts worldwide. This includes casual, fast-casual, and quick-service dining concepts. Its brand portfolio includes Round Table Pizza, Fatburger, Johnny Rockets and many other renowned brands. For an idea of scale, FAT franchises over 2,300 units worldwide. The company also has a strong portfolio of brands for future acquisitions and has a scalable management platform.
Earlier this week, the company announced it had signed 20 new development deals for quick-service brands. These include Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, and Pretzelmaker. The aforementioned brands were part of Global Franchise Group, which FAT acquired last year. Obviously, through the acquisition, FAT Brands has strategically expanded into the snack and pizza segments, with those companies being part of its quick service division. The development agreements signed by FAT will cover the creation of more than 50 new stores for the recently acquired brands. In total, FAT’s quick serve division has more than 150 units in the pipeline, with 30 locations planned for this year. With FAT expanding its reach, should you invest in FAT stocks?
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Dave and Buster Entertainment
At Dave and Buster’s owns and operates high-volume entertainment and dining venues. The company offers its customers the opportunity to eat, drink, play and watch in one place. Simply put, you could have a social and fun time while having great food and drink at the same time. Additionally, its stores are designed to accommodate high-end sporting events, private parties and corporate functions. Over the past six months, PLAY stock has risen nearly 25%.
Last week, Main Event Entertainment announced that Ardent Leisure Group and RedBird Capital have reached an agreement with Dave & Buster’s to acquire Main Event. For those unfamiliar, Main Event is one of the fastest growing family entertainment brands in the country, with 50 locations operating nationwide. Main Event offers entertainment such as bowling, laser tag, arcade games, etc. As a result, the acquisition is expected to be worth $835 million and is expected to close later this year. This strategic decision offers the opportunity to merge two successful brands with a unique and different target demographic. Additionally, it will also improve the breadth of offers and experiences for each brand’s customers. With this acquisition in place, is PLAY stock a buy?
Another top restaurant stock on investors’ radar is Yum! Brands (YUM). For the uninitiated, the company operates famous restaurant brands such as KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and Wingstreet around the world. The only exception would be in China, where it operates through a separate company, Yum China Holdings (NYSE: YUMC). In fact, YUM is one of the largest fast food companies in the world in terms of system units. In 2021, the company had more than 53,000 restaurants in 135 countries and territories around the world.
Earlier in the month, it was reported that YUM had filed NFT trademarks for KFC, Pizza Hut and Taco Bell. According to the United States Patent and Trademark Office (USPTO), trademarks have been filed for these three brands of virtual F&B products. Additionally, the marks included downloadable virtual goods such as NFTs, digital tokens, loyalty cards, and even video game software containing NFTs and other virtual goods. As such, YUM joins a growing list of brands from various industries that have filed trademarks in the NFT space. And on that note, will you be watching YUM’s shares for their next move?
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Last, but not least, is dutch brothers (BROS), an upcoming name in the American specialty coffee scene. For the most part, he identifies himself as a high-growth operator and franchisor of drive-through cafes. The company caters to the needs of coffee drinkers by offering a selection of high quality craft beverages. For a sense of scale, BROS operates through a network of over 500 locations across the United States. In March, the coffee chain operator released its fourth quarter and full year 2021 financial statements.
Hopping in, revenue was $140.1 million, up 55.8% from a year ago. Subsequently, same-store sales in the system grew 10.1% in the fourth quarter and 15.3% year-over-year. The company’s gross operating profit was $16.1 million, up 15.4% year-on-year. BROS also opened 35 new stores this quarter, surpassing its period high of 33 stores. Additionally, the company provided the following outlook. Namely, it plans to open at least 125 stores, of which at least 105 stores will be operated by the company. Additionally, he expects total revenue to be between $700 million and $715 million. As BROS continues to steadily increase its footprint in the coffee industry, would you consider adding BROS shares to your portfolio?
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