Restaurant sales rebound to pre-pandemic peaks: 5 choices
Restaurants and bars, which were hit hard last year, are quickly returning to normal and boosting overall retail sales. While retail sales have declined over the past two months and registered a marginal increase in June, sales in bars and restaurants are picking up quickly.
In fact, sales are now above pre-pandemic highs and as the economy reopens more, the industry is expected to thrive.
Restaurant sales continue to grow
Sales at restaurants and bars increased in June, with consumers spending 2.3% more on revenue, the Commerce Department said on July 16. On an annual basis, restaurant and bar sales jumped 40.2% in June.
Compared to that, overall retail sales rose only 0.6% in June. Naturally, restaurants are busy again and attracting more footfall as more and more people get vaccinated and go out.
Last year, the service sector was hit hard due to the pandemic, which saw people spending more on electronics and essentials.
This is evident from slowing retail sales but increasing spending in restaurants and bars. Restaurants and bars are the only service category reported in overall retail sales.
Additionally, a number of restaurants are reporting increased sales this quarter.
PepsiCo Inc. PEP recently reported its fastest sales growth in a decade, as it benefited consumers who aggressively return to restaurants, bars and stadiums after a one-year lull.
Restaurant sales set to grow
Sales in bars and restaurants have been on the rise since the start of the year when the vaccination campaign started to gain momentum. To date, more than 160 million people have been vaccinated in the United States. This saw the government relax restrictions and more people regained confidence to leave their homes.
Plus, travel is on the rise again and people are planning vacations. Thus, restaurant sales are expected to increase further in the coming months.
In addition, the new round of stimulus checks under the $ 1.9 trillion coronavirus relief aid has given people more purchasing power. According to a Restaurant Business Online article, citing a report by the National Restaurant Association, restaurant sales in the United States are quickly returning to normal after falling 19.2% in 2020, which was also the strongest year. difficult for the industry.
Given the situation, it makes sense to invest in restaurant stocks. We handpicked stocks of five restaurant players, each wearing a Zacks Rank # 1 (strong buy) or 2 (buy). You can see the full list of today’s Zacks # 1 Rank stocks here.
Dine Brands Global, Inc. DIN is a full service catering company. It operates and franchises restaurants under the Applebee’s Neighborhood Grill & Bar and IHOP brands.
The company’s expected profit growth rate for the current year is over 100%. Zacks’ consensus estimate for current year earnings has improved 0.2% in the past 60 days. The company sports a Zacks Rank # 1.
Papa John’s International, Inc. PZZA operates and franchises delivery and pizza delivery restaurants in the United States and other specific international markets. Its catering and delivery restaurants operate under the Papa John’s brand.
The company’s expected profit growth rate for the current year is over 100%. Zacks’ consensus estimate for current year earnings has improved 5.6% in the past 60 days. Papa John’s wears a Zacks Rank # 1.
Ruths Hospitality Group, Inc. RUTH is the largest gourmet grill company in the United States, measured by the total number of company-owned and franchise-owned restaurants, with more than 150 Ruth’s Chris Steak House restaurants around the world.
The company’s expected profit growth rate for the current year is over 100%. Zacks’ consensus estimate for current year earnings has improved 18.9% in the past 60 days. The company has a Zacks Rank # 1.
The incorporated cheesecake factory CAKE operates 298 restaurants in the United States and Canada under brands, including The Cheesecake Factory and North Italia, and a collection within the Fox Restaurant Concepts subsidiary.
The company’s expected profit growth rate for the current year is over 100%. Zacks’ consensus estimate for current year earnings has improved 5.6% in the past 60 days. The company carries a Zacks Rank # 1.
Wendy’s company WEN operates through its holding subsidiary – Wendy’s Restaurants, LLC. The fast food chain through its subsidiary operates as a franchisor of the Wendy’s catering system.
The company’s expected profit growth rate for the current year is 29.8%. Zacks’ consensus estimate for current year earnings has improved 7.2% in the past 60 days. Wendy’s Company wears a Zacks Rank # 2.
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DINE BRANDS GLOBAL, INC. (DIN): Free Stock Analysis Report
The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report
PepsiCo, Inc. (PEP): Free Stock Analysis Report
Ruths Hospitality Group, Inc. (RUTH): Free Inventory Analysis Report
The Wendys Company (WEN): Free Stock Analysis Report
Papa Johns International, Inc. (PZZA): Free Stock Analysis Report
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