Most Restaurant Chains To Miss Q1 Earnings Estimates, Warns Wall Street Analyst

Bank of America has warned that most U.S. restaurants and fast-food chains will likely fall short of the first-quarter earnings estimates currently projected by Wall Street analysts.

The move follows sweeping U.S. tariffs introduced this month, which are expected to drive up prices and dampen demand across various sectors, particularly discretionary spending areas such as dining out.

In a recent note, BofA Securities analyst Sara Senatore said dining activity recovered slightly in March but was likely not enough to boost sales for the entire quarter, according to a Seeking Alpha report.

BofA's credit and debit card data shows a month-over-month pickup in restaurant spending across all segments — except fine dining — with overall growth improving to flat (0.0%) in March from a 4% decline in February.

Spending at restaurant chains also saw a smaller drop, easing to -4.2% from -7.5% the previous month. The bank attributes the rebound to more favorable weather and a calendar shift that negatively impacted February.

Despite the improvement, the analyst said Q1 consensus estimates for most restaurants remain elevated.

Senatore added that the impact of recent policy changes and uncertainty, including changes in consumer sentiment, traffic, and the cost of goods, will fully emerge this month.

According to The Fly, BofA adjusted lower price targets on several chains, including McDonald's (MCD), Restaurant Brands (QSR), Chipotle Mexican Grill (CMG), Starbucks (SBUX), Domino's Pizza (DPZ), and Papa John's (PZZA).

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