4 restaurant stocks to buy if sales and hiring increase

AAmericans are worried about rising prices, but that hasn’t stopped them from spending. In fact, people have started to spend aggressively on services, helping retailers. It saw American restaurants, which had been hit hard at the height of the pandemic, finally get back to normal.

The latest data from the Commerce Department shows sales at bars and restaurants rose in March despite people feeling the pinch in their pockets. This is certainly a good sign given that the restaurant industry has suffered greatly over the past couple of years. So actions like Dave & Buster’s Entertainment, Inc. CHEEK, BBQ Holdings, Inc. A BARBECUE, Arcos Dorados Holdings Inc. ARCO and Kura Sushi USA, Inc. KRUS should benefit from this in the short term.

Increase in restaurant sales

The Commerce Department said April 14 that restaurant sales rose 1% in March. The report is part of overall retail sales which rose 0.5% month over month in March.

Rising costs are worrying people and they are spending cautiously. However, that hasn’t stopped them from spending on services like restaurants. That’s certainly a good sign, given that the restaurant industry has had an unimpressive run since the pandemic began.

People have reduced their spending on services during the pandemic, opting instead to spend more on goods. Due to the COVID-induced lockdown, they didn’t have much option in terms of spending on services.

However, things finally seem to be changing as more and more people are now confident to get out of their homes and indulge in some outdoor entertainment. Indeed, COVID-related restrictions continue to be relaxed.

Industry on track for steady growth

The restaurant industry appears to be on track for a rapid recovery, although rising costs remain a major challenge. A separate report from Mastercard SpendingPulse shows restaurant and bar sales in the United States rose 19.1% in March on a year-over-year basis.

According to the National Restaurant Association, restaurant sales in 2022 will be significantly higher than in 2021. Restaurant sales are estimated to reach $898 billion in 2022, returning to pre-pandemic levels.

The surge in sales has also seen restaurants go on a hiring spree. Hiring in the United States is already at an all-time high, with 431,000 jobs added in March. Restaurants and bars led the race with 61,000 job creations.

Additionally, the restaurant industry is expected to add 400,000 jobs to its current 14.9 million employees by 2022. Things look much better than they did a year ago, and if things continue to improve, the restaurant industry will only continue to grow.

This means that people’s willingness to dine out has also given restaurants much-needed encouragement to hire more workers.

Our choices

Dave & Buster’s Entertainment, Inc. is one of North America’s leading owners and operators of high-volume venues that combine dining and entertainment for adults and families. The core concept of the PLAY channel is “Eat Drink Play and Watch”, all in one place. As part of the Eat concept, Dave & Buster’s Entertainment offers a wide variety of entrees, burgers, prime steaks and health conscious foods.

Dave & Buster’s Entertainment’s forecast earnings growth rate for the current year is 49.3%. The Zacks consensus estimate for current-year earnings has improved 22.2% over the past 60 days. PLAY sports a #1 Zacks rank.

BBQ Holdings, Inc. operates and franchises barbecue restaurants and blues clubs. BBQ currently has locations and franchises in Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Utah, Maryland and Virginia and has signed development agreements for additional franchise locations. The menu at BBQ Holdings features award-winning grilled and grilled meats, an extensive selection of unique salads, sides, sandwiches and desserts.

BBQ Holdings’ forecast earnings growth rate for the current year is 66.2%. The Zacks consensus estimate for current-year earnings has improved 25.5% over the past 60 days. BBQ sports a No. 1 Zacks rank.

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s, with its operations spread across Brazil; North Latin America division; South Latin America and Caribbean Division. ARCO also operates quick service restaurants in Latin America and the Caribbean.

Arcos Dorados’ expected profit growth rate for the current year is 66.7%. The Zacks consensus estimate for current-year earnings has improved 17.6% over the past 60 days. ARCO has a #2 Zacks rank.

Kura Sushi USA, Inc. operates as a restaurant. KRUS offers nigiri, wraps, hand rolls, gunkan and desserts. Kura Sushi is based in Irvine, California.

Kura Sushi USA’s expected profit growth rate for the current year is 81.9%. KRUS shares have gained 22.5% over the past three months. Kura Sushi USA has a #2 Zacks rank.

5 shares ready to double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations climbed +143.0%, +175.9%, +498 .3% and +673.0%.

Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.

Today, check out these 5 potential home runs >>

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Arcos Dorados Holdings Inc. (ARCO): Free Stock Analysis Report

Dave & Buster’s Entertainment, Inc. (PLAY): Free Stock Analysis Report

Kura Sushi USA, Inc. (KRUS): Free Stock Analysis Report

BBQ Holdings, Inc. (BBQ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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