From fast food to fine dining, restaurants play a vital societal role. But the side dish is that they’re quite difficult to operate because high inventory and labor costs generally lead to thin margins at the store level.
This leaves little room for error if demand dries up, and it seems like the market has some reservations as the industry has tumbled by 13% over the past six months. This performance was noticeably worse than the S&P 500’s 1.9% decline.
A number of stocks jumped in the morning session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025.
Exciting developments are taking place for the stocks in this article.
They’ve all surged ahead of the broader market over the last month as catalysts such as new products and positive media coverage have propelled their returns.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
PENN Entertainment Inc (PENN) and Shake Shack Inc. (SHAK) partner to bring popular burger chain to 10 casino properties, aiming to enhance guest experience and expand geographic footprint. First two locations set to open in 2026, with more to follow. Partnership reflects trend of integrating culinary brands into casinos. Related ETFs: PEJ, EATZ. PENN shares down 2.11% and SHAK down 1.02%.
Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Sweetgreen (NYSE:SG) and its peers.
Fast-food chain Shake Shack (NYSE:SHAK) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 10.5% year on year to $320.9 million. Its non-GAAP profit of $0.14 per share was 12.4% below analysts’ consensus estimates.
Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match.
The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Fast-food chain Shake Shack (NYSE:SHAK) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 10.5% year on year to $320.9 million. Its non-GAAP profit of $0.14 per share was 15.1% below analysts’ consensus estimates.
Goldman Sachs flags ongoing risks for U.S. restaurants in 2025, with macro uncertainty, weak consumer sentiment, and tariff pressures weighing on growth.
Commodity trends shifted in Q1, with deflation in grains but a spike in coffee prices. Restaurant stocks lag historic EPS multiples, and investors now eye April demand and potential tariff impacts.
Several restaurant stocks are taking a beating on Thursday as broader markets tumble in reaction to sweeping reciprocal tariffs from the Trump administration.
