Restaurant Stocks Earnings Queued Up For Jul 27: CAKE, KONA

The Q2 earnings season is gathering pace with 126 of the S&P 500 members (as of Jul 22) releasing their quarterly results. Though the earnings picture so far has been moderately encouraging, the overall scenario is far from being rosy.  Per our latest earnings preview article, total S&P 500 earnings are expected to be down 3.4% owing to 0.5% lower revenues for the quarter.

Turning our focus to the restaurant stocks, we note that in spite of the high expectations for the group, most of the stocks reported below-par figures.

Major players in the space like Chipotle Mexican Grill, Inc. CMG, Starbucks Corporation’s SBUX and Dunkin' Brands Group, Inc. DNKN struggled with the top line, which dealt a heavy blow to the results.

Two restaurant companies are set to report their quarterly numbers on Jul 27. Will these companies manage to put up a decent performance? Let’s take a look at what might be in store for them this quarter:

The Cheesecake Factory Incorporated CAKE is slated to report second-quarter 2016 results, after market close. In the last quarter, the company posted a positive earnings surprise of 13.33% in the last reported quarter. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 8.46%

CHEESECAKE FACT Price and EPS Surprise

CHEESECAKE FACT Price and EPS Surprise | CHEESECAKE FACT Quote

The company has an Earnings ESP of -1.41% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter’s earnings is pegged at 71 cents per share.

With a solid start to 2016 and a moderate increase in prices, the company expects comps to remain flat or grow up to 1% in Q2. However, unit expansion plans, pre-opening costs of outlets and costs related to sales initiatives might hurt margins (read more: Cheesecake Factory Q2 Earnings: Will It Disappoint?).

Kona Grill Inc. KONA is slated to release second-quarter 2016 results, after market close.

Last quarter, Kona Grill posted a 15.38% negative earnings surprise. Moreover, the company posted negative earnings surprises in three of the past four quarters, with an average miss of 9.86%.

KONA GRILL INC Price and EPS Surprise

KONA GRILL INC Price and EPS Surprise | KONA GRILL INC Quote

For Q2, the company has an Earnings ESP of -20.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at a loss of 5 cents per share.  

Stay tuned! Check back on our full write-up on earnings releases of these stocks.

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CHIPOTLE MEXICN (CMG): Free Stock Analysis Report
 
CHEESECAKE FACT (CAKE): Free Stock Analysis Report
 
STARBUCKS CORP (SBUX): Free Stock Analysis Report
 
KONA GRILL INC (KONA): Free Stock Analysis Report
 
DUNKIN BRANDS (DNKN): Free Stock Analysis Report
 
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