It was a tough start for the year for restaurant chains. People reconstruct the spending due to uncertain economic conditions and the restaurants can not rely on price increases to increase the top lines. The last quarter of 2024 showed signs of weakness already and the work may worsen in the coming months. As a result, the tariffs may depend on how the tariffs affect customers and enterprises.
Some of the chains of some great restaurants, including McDonald’s (NYSE: MCD) and Chipotle Mexico Grill (NYSE: CMG)As the year, they are waiting for more powerful numbers. But this is nothing. Here are why they can be wrong and why do investors want to be careful when looking to buy Restaurant reserves right now.
For investors, a large number to keep an eye on the restaurant shares is definitely not selling, but Comparable sales growthSaying how much the case has increased organically. The comparable figure excludes the impact of the new store openings and closures so compares with more apples.
And this is a problem. In the last three months of 2024, McDonald’s comparable store sales increased by only 0.4% on a global scale. Were in the United States down 1.4%. The size of the size is small, but the top of the chiptle known to be on top growth stockCompared to the same period, the increase in sales increased by 5.4%. This is better than McDonald’s, but a year ago the growth rate was 8.4%.
Despite the figures, both McDonald’s and chipotle expect to improve the year as the year progresses. Ian Borden, a head financial officer in McDonald’s officer, is waiting for the company’s “gradual stabilization of the macroeconomic and consumer environment.” Chipotle, in the second half, expects work to improve the work when opposing poor comparable numbers. No company appears to be prepared for a large economic slowdown.
No one wants to predict the worst, but the deterioration of reality trade wars and economic conditions can have a destructive effect in both sales and profit for restaurants. Although these chains can give clients to be charming, another alternative can simply eat at home.
Costco Wholesale He recently stated his income and noted that it was a change in consumer habits – they spend more in food that can include more to eat foods such as food and frozen dishes. Management is more careful in what they just spend their money.
This is not surprising to take into account the concerns about the tariffs, but this is still in the early stages. President Donald Trump has stopped some tariffs until next month, ie prices can get more than a higher for restaurants and consumers. At one end of the work, the costs for restaurant chains can rise, while others are able to earn less arbitrary income.
Given the level of uncertainty, which can be placed and how long the tariffs can last, the investors may have a risky proposal to believe that macroeconomic conditions will improve. Instead they could be worse.
The best restaurant chains like McDonald’s and chipotle can be good long-term positions to catch, but it is important to keep your expectations. For the future, at least it may have difficulty for those who are more favorable for economic conditions. In these cases, you may want to compensate these uncertainty and hope to purchase a stock in a discounted assessment to have a good security margin in case of work.
However, at this point can be the safest option, a waiting and approach to time for time with restaurant shares. It may be many places for falling this year, especially if the results do not match the optimistic expectations.
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David Jagielski There is no position in any of the marked shares. Motley has Foox positions and the Chipotle recommends in Mexican Grill and Costco wholesale. Motley stupid recommends the following options: Short March 2025 58 $ 58 Calls in the Mexican grill. Motley Fool has a Disclosure Policy.
