Asx Alert-Restaurant Brands Half Year Financial Results 2025-Rbd.Nz

What Happened?

A number of stocks fell in the afternoon session after the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners.

A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.

Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap."Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Apparel Retailer company Abercrombie and Fitch fell 4.7%. Is now the time to buy Abercrombie and Fitch? Access our full analysis report here, it’s free.
• Home Furniture Retailer company RH fell 6.4%. Is now the time to buy RH? Access our full analysis report here, it’s free.
• Traditional Fast Food company Restaurant Brands fell 3.9%. Is now the time to buy Restaurant Brands? Access our full analysis report here, it’s free.
• Electrical Systems company Powell fell 6.9%. Is now the time to buy Powell? Access our full analysis report here, it’s free.
• Automation Software company SoundHound AI fell 6.5%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free.

Zooming In On Powell (POWL)

Powell’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 17.6% on the news that the company reported weak third-quarter results, with sales falling significantly below Wall Street's estimates. New orders came in at $267 million, a significant decline compared to the previous quarter. Total backlogs were also flat quarter on quarter and relative to the previous year. Given the deceleration in some of the forward growth indicators, markets are likely worried about the near-term sales outlook, with management also acknowledging that the first quarter of its fiscal year is "seasonally slower."

On a more positive note, gross margin improved due to higher volume levels across all manufacturing facilities, supported by improved operating efficiency and product pricing. As a result, adjusted EBITDA and EPS beat analysts' expectations during the quarter. Overall, this quarter could have been better.

Powell is up 4% since the beginning of the year, but at $237.91 per share, it is still trading 32.5% below its 52-week high of $352.37 from November 2024. Investors who bought $1,000 worth of Powell’s shares 5 years ago would now be looking at an investment worth $9,154.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how traditional fast food stocks fared in Q2, starting with Starbucks .

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

The 14 traditional fast food stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Starbucks

Started by three friends in Seattle’s historic Pike Place Market, Starbucks is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Starbucks reported revenues of $9.46 billion, up 3.8% year on year. This print exceeded analysts’ expectations by 1.7%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

Unsurprisingly, the stock is down 2% since reporting and currently trades at $91.11.

Read our full report on Starbucks here, it’s free.

Best Q2: Dutch Bros

Started in 1992 by two brothers as a single pushcart, Dutch Bros is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Dutch Bros reported revenues of $415.8 million, up 28% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA and same-store sales estimates.

Dutch Bros scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10% since reporting. It currently trades at $63.55.

Is now the time to buy Dutch Bros? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Jack in the Box

Delighting customers since its inception in 1951, Jack in the Box is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.

Jack in the Box reported revenues of $333 million, down 9.8% year on year, falling short of analysts’ expectations by 2.1%. It was a softer quarter as it posted a miss of analysts’ EBITDA estimates and a miss of analysts’ same-store sales estimates.

The stock is flat since the results and currently trades at $19.02.

Read our full analysis of Jack in the Box’s results here.

Restaurant Brands

Formed through a strategic merger, Restaurant Brands International is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.

Restaurant Brands reported revenues of $2.41 billion, up 15.9% year on year. This result topped analysts’ expectations by 2.9%. It was a strong quarter as it also logged same-store sales in line with analysts’ estimates.

The stock is down 2.8% since reporting and currently trades at $66.66.

Read our full, actionable report on Restaurant Brands here, it’s free.

Wendy's

Founded by Dave Thomas in 1969, Wendy’s is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Wendy's reported revenues of $560.9 million, down 1.7% year on year. This print surpassed analysts’ expectations by 0.6%. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but full-year EBITDA guidance missing analysts’ expectations.

The stock is up 6% since reporting and currently trades at $10.57.

Read our full, actionable report on Wendy's here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.