Chili’s owner Brinker International was the year’s best performing stock. | Photo by Jonathan Maze.
Wall Street generally had a good 2024, but restaurant stocks mostly missed out on the party.
The S&P 500 stock index finished the year up 23%, thanks largely to strong earnings numbers and a recession that never showed up.
Restaurants, on the other hand, were left wanting. The median restaurant stock finished the year down 4.8%. Most publicly traded restaurant companies finished the year in negative territory, including large names like McDonald’s, Starbucks, Wendy’s and Burger King owner Restaurant Brands International.
One company, Chuy’s, was sold, to Darden Restaurants. Another, BurgerFi International, filed for bankruptcy and was also sold.
It’s no wonder no restaurant company opted to go public.
A few companies thrived, buoyed by unexpected outperformance. The top-performing restaurant stock last year was, perhaps unsurprisingly, Chili’s owner Brinker International, which finished having tripled in value, thanks largely to 14%-plus same-store sales performance by its flagship chain that took everybody by surprise.
By contrast, the typical casual-dining stock declined 22% and Dine Brands Global, owner of rival Applebee’s, declined 39%.
Sweetgreen, which struggled somewhat after its 2021 IPO, found its footing in 2024 thanks to improving sales and profitability results, its stock finishing up 184%. Investors similarly snapped up Cava stock, much like its customers gobbled up the chain’s menu items. It finished the year up 166%. Shake Shack (up 75%), Dutch Bros (65%) and Steak n Shake owner Biglari Holdings (54%) all finished up more than 50%.
On the other hand, a few companies lost more than half their value, largely on the basis of struggling sales, no more so than Noodles.
The fast-casual noodle chain is now a penny stock, having declined 82% last year. A share (58 cents) costs less than an extra pump of mocha sauce at Starbucks (80 cents).
Bloomin’ Brands, which owns Outback Steakhouse, declined 57%. Its flagship brand has struggled while rival Texas Roadhouse (up 48% in 2024) has thrived. Red Robin declined 56% last year, and STK owner The One Group declined 53%, both due to sales challenges.
But 10 restaurant companies, including also Portillo’s, Arcos Dorados Holdings, Denny’s, Dave & Buster’s, Papa Johns and Jack in the Box, all lost more than 40% of their market cap in 2024.
For the most part, however, Wall Street investors put their money where the sales have been. Fast-casual chains on average have generated strong sales, while full-service restaurants have struggled. Fast-casual company stocks grew a median of 16%, compared with a 22% decline for casual-dining stocks.
Fast-food chains have been in the middle, with weak traffic and a growing value war. They finished down 3.6%. But they recovered at least somewhat toward the end of the year, as investors grew bullish that the fast-food restaurants were showing signs of a comeback.
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