Summer time is heating up, however restaurant shares are cooling down.
On this podcast, Motley Idiot analysts Rick Munarriz and Alicia Alfiere and contributor Jason Corridor dig into issues at favourite chain eating places. In addition they take a look at some corporations reporting earnings, and it is report card time for a few of this yr’s greatest gainers.
To catch full episodes of all The Motley Idiot’s free podcasts, try our podcast heart. While you’re prepared to speculate, try this prime 10 checklist of shares to purchase.
A full transcript is beneath.
This podcast was recorded on August 18, 2025.
Rick Munarriz: Indigestion for shares, fascinating corporations reporting earnings this week. Unbelievable positive factors this yr from unlikely corporations. Let’s dive in to search out out proper now on Motley Idiot Cash. I am Rick Munarriz, and immediately I am joined by fellow analyst Alicia Alfiere and Jason Corridor with a take a look at what’s consuming at restaurant shares this summer time. We’ll additionally take a look at among the extra shocking corporations which have greater than doubled this yr. However first, it is nonetheless incomes season. A variety of acquainted names are stepping up with recent financials this week. A variety of obscure ones, too, after all. I wish to go across the room to see if there’s an organization that has your eye, if not your coronary heart, reporting quarterly outcomes this week. Let’s begin with you, Jason.
Jason Corridor: TJX corporations, it is undoubtedly received my eye, just a little little bit of my coronary heart, however none of my pockets but due to valuation, however TJX corporations, the dad or mum firm of TJ Max, Marshalls, HomeGoods, different clothes and residential furnishing retailers, experiences Wednesday morning, and I will be trustworthy with you, Rick. I feel in addition to Costco, TJX could also be the most effective retailer within the US. It’s distinctive at two actually essential issues. The one that does not get sufficient credit score from the common particular person or investor is how good of a purchaser it’s. It is like the discharge valve for extra stock, for producers, different retailers, and distributors, it is actually good at getting nice offers on the price facet of shopping for that. However here is the factor. The precise hardest half is getting that merchandise in the precise shops and the precise markets to maneuver it shortly after which flip it into extra cash than it paid for it. It is distinctive if that a part of its enterprise mannequin is the treasure hunt expertise. They cater each to folks that have loads of additional disposable earnings which are in search of that nice deal, but in addition simply to common folks which are in search of worth for title model merchandise at extraordinarily low price. That mixed experience is a savvy purchaser and intensely environment friendly retail operator ends in nice margins. It retains clients coming in throughout financial environments. In the event you look final quarter, comps have been up 3%. As clients are spending more cash, you take a look at many of the competitors in low cost retail, you see the opposite factor, comps are shrinking, individuals are coming in much less and spending much less. I am actually to see if TJX can proceed in working so nicely in what’s actually a difficult setting for low cost retail.
Alicia Alfiere: Properly, so I’ve a query for you, Jason, on TJX. With the financial uncertainty looming, do you assume we’ll see extra worth customers going to TJX to look to search out these offers, or do you assume these worth customers are going to be staying residence?
Jason Corridor: I feel it’ll do nicely. I feel what we’ll see is what we have seen from it previously, and that’s folks whose private finance scenario remains to be effective are going to proceed to go there extra as a substitute of perhaps purchasing upstream. They will come downstream, whether or not they must or not, they are going to decide on to due to sentiment. That is in all probability going to offset among the different clients which are simply really having to tug again. Its power as a purchaser goes to be a very good scenario for it. Significantly if we see tariffs do bizarre issues with stock ranges, they are not going to fiddle. They will make the most of that chance. I feel even when perhaps they do not develop as quick, they’re undoubtedly going to show how resilient their enterprise mannequin is.
Rick Munarriz: Alicia, what you bought?
Alicia Alfiere: Properly, so this week, I am excited to see what’s going on with Viking Holdings. It is an organization that is near my coronary heart as a result of my dad, who simply turned 70, has needed to do a European river cruise for a very very long time. Viking is smaller than different cruise corporations. But it surely’s the highest canine within the North American outbound River Cruise market. It is received a powerful model that ranks extremely among the many prosperous 55 older crowd, which Viking believes has been largely underserved within the cruise business except for them. By the top of their first quarter, Viking already had 92% of their 2025 capability booked, so I am excited to see what comes subsequent for them.
Rick Munarriz: I am a fan of Viking, too. In all probability like your dad. I’ve checked out these cruises. They aren’t low-cost. River Cruises aren’t your principally carnival massive chip with lots of people and a variety of low costs. Are they vulnerable to an financial downturn?
Alicia Alfiere: That is query. I feel as a result of their focus is a lot on this retiree neighborhood of 55 and older, Grant, it would be great to retire at 55. However folks that are usually prosperous and retired, I feel they’ve much less of a threat, however as with something that is discretionary, they will probably take a success with financial uncertainty.
Rick Munarriz: Yeah, thanks. I will go together with Baidu. B-A-I-D-U, the corporate behind China’s main search engine, goes by way of some rising pains. Income has declined in half of the final six years, and Baidu delivered double-digit top-line progress simply a kind of years. Expectations are low heading into this week’s outcomes. Analysts see a 3% year-over-year decline in income on a pointy slide in profitability. It is not look, however Baidu has come by way of with double-digit share beats on the underside line and back-to-back quarters. It is also been toiling away in AI, cloud computing, and autonomous driving lengthy earlier than these areas have been cool. These are bets that can repay over time. Within the meantime, you should purchase a cash-rich Baidu for lower than ten instances subsequent yr’s targets. Baidu.
Jason Corridor: Excited about these subsequent guess issues, Rick, do you assume Baidu is without doubt one of the corporations that is going to have the ability to proceed to innovate, even because the Chinese language market continues to be challenged with entry to the most effective chips for AI?
Rick Munarriz: Clearly, the entire AI revolution in China has this entire factor taking place proper now, caught within the tariff battle. I do assume that whether or not they exit on their very own or they discover methods to do it. Baidu has workplaces, even within the US. They’ve locations they’ve intel all around the world. It is not simply purely Chinese language firm. I feel they may determine it out. And proper now, it is only a very aggressive setting, which is why so many corporations are Baidu struggling as a result of so many different corporations are additionally struggling to face out on this setting. Baidu and TJX report on Wednesday morning. Viking disembarks on Tuesday morning. Corporations maintain incomes, we continue to learn. Arising subsequent, Hamburger Helper, what is going on on with restaurant shares? Hungry for extra OrderUp.
It has been a difficult summer time for restaurant shares, notably rule-breaker chains. Cava took a 17% hit on a single buying and selling day final week after posting disappointing comparable restaurant gross sales. We noticed Wingstop, SweetGreen, and even Chipotle ship detrimental comps. What’s burning within the kitchen? Let’s dig in. Alicia.
Alicia Alfiere: Properly, so it seems to be just like the financial system is taking a chunk out of shoppers’ need to dine out, or on the very least, it is making them much more value conscious. If we take a look at Chipotle, which is an old-fashioned Rule Breaker, in its final quarter, comparable gross sales fell 4% yr over yr, and that is an enormous distinction from final yr when comparable gross sales grew 11% yr over yr. Chipotle talked about how a lot their visitors has been monitoring together with client sentiment, and administration believes that some shoppers are making consuming choices primarily based on value proper now. In addition they talked about a few of their opponents have $5 meals, they usually consider that is the place a variety of the shoppers are heading. Talking of $5 meals, let’s discuss McDonald’s. Not like Chipotle and another restaurant chains that noticed same-store gross sales declines, McDonald’s noticed its international comparable gross sales develop 3.8%, and that is an enormous enchancment from final yr when the corporate’s comparable gross sales fell 1%. By the way in which, McDonald’s noticed gross sales progress in all of their world areas, and McDonald’s is aware of that its affordability was a serious driver for its efficiency and says that the $5 meal deal continues to be a success, and the corporate additionally realizes that the 299 value level, they promote snack wraps for that appears to be engaging to shoppers as nicely. However even with their efficiency this quarter, McDonald’s remains to be cautious about upcoming quarters and the US client. However even they commented that visits from lower-income shoppers who are likely to eat at McDonald’s greater than different teams have declined, and the corporate believes that it will be actually essential for them to reengage with these clients. One of many issues that they talked about is working with their US franchisees to have a look at the core menu pricing, however they do must watch out right here. Too many cuts, and McDonald’s can be shopping for their income by probably sacrificing profitability.
Rick Munarriz: Simply a few days in the past, I spent $16 on a McDonald Land grownup youngsters meal. It is principally this factor comes with, like, a grimace shake. It comes with a Tin collectible with just a little toy with a card recreation. It looks like McDonalds enjoying each the low finish and the excessive finish. Does that Barbell pricing? Does that sound prefer it’s technique for you, or is that an issue?
Alicia Alfiere: Properly, I do assume that it is good to attempt to hit a number of sides of the buyer continuum, versus actually simply concentrating on one group. I feel that may assist make their revenues much less lumpy once we go into totally different elements of the financial cycle.
Rick Munarriz: Ba da, da, da, da, I am loving it. So, Jason, your ideas?
Jason Corridor: $16 once I was a child, that’d feed a household of 4 at McDonald’s, and everyone would get mushy serve ice cream. It is exceptional how that is modified. I am going to say this. I feel the fascinating factor to me, like, the remark as an investor, it is throughout the sector. It is a variety of what we’re seeing a specialty and low cost retail, too. It is a clear client development. Customers are beginning to pull again in some areas. And as an investor, actually, that makes me just a little bit extra and fewer involved about particular person corporations as a result of it means we’re much less more likely to have an organization that is struggling in market. The market is down and it is weak, and I begin wanting extra carefully when detrimental sentiment like that’s taking place, particularly if it drives inventory costs down as a result of it might create some alternatives for buyers to purchase some actually nice high quality companies which have robust monitor data over the long run, after which simply maintain whereas the market collapse and we return again to a wholesome market in some unspecified time in the future in future quarters and even future years, that is one of many ways in which long run buyers can juice their portfolios and actually win over the long run.
Rick Munarriz: Mainly, the enterprise fashions aren’t damaged, simply the buyer sentiment is what must quickly come again in some capability.
Jason Corridor: That is precisely what it seems to be prefer to me.
Rick Munarriz: Good. Once we get again from the break, we’ll have enjoyable with a few of this yr’s hottest shares. Stick with us. We ordered a cake.
Lastly, there have been some very shocking shares which have greater than doubled this yr. I will play just a little recreation with you guys known as beat or defeat. I need you guys to inform me beat, in case you assume they will proceed to beat the marketplace for the remainder of the yr, the following 4.5 months or so, or defeat, in case you assume that they’ll really return again to their norms to enhance modals. Do not overthink it. We’ll go over three shares. The primary one, Rule Breaker, Roblox. It is up 117% by way of Thursday’s shut, transfer decrease on Friday. However proper now, Jason, beat or defeat.
Jason Corridor: Going to say defeat. Now, within the information proper now, there’s some issues with Louisiana is suing Roblox over some considerations about issues with youngster security. We can’t get into that. However I feel wanting past that, what I see with Roblox proper now it was an excellent enterprise with some actually good progress proper now, however it simply looks like the valuation metrics do not essentially help a continued run 19 instances gross sales. They misplaced about $500 million over the buying and selling 12 months, and $500 million of that was stock-based compensation. It is simply going to be exhausting to proceed that run at this valuation. I feel we’re extra more likely to promote some revenue taking earlier than the top of the yr that perhaps undermines just a little little bit of that nice outcomes that we have had.
Rick Munarriz: Alicia?
Alicia Alfiere: I feel this one is difficult. I feel the Louisiana Lawyer Basic suing Roblox alleging the platform would not do sufficient to guard minors. I feel if that is true, that is an enormous drawback. But when Roblox can resolve this subject, I feel it is really candidate to beat. We have got actually spectacular metrics taking place right here, common every day customers up 41% yr over yr, hours of engagement up 58% yr over yr.
Jason Corridor: The bookings numbers are unimaginable.
Rick Munarriz: So let us take a look at Palantir, up 139% this yr. Jason, begin us off.
Jason Corridor: Are you certain you need me to begin right here? I’ve purchased Places. I am really shorting Palantir through places. They’re very long-term, like a number of years out. I will say that now. I am making a multiple-year guess that the inventory goes to say no. Between now and the top of the yr, I feel that we might begin to see a few of that occur. Let me say this. I feel it’s a unprecedented enterprise. However the valuation, I stated, Rule Breakers is pricey. Palantir makes Rule Breakers seem like a jalapeño. It’s extremely costly, and the expectations, I feel it turns into so dislodged from what the enterprise can realistically do an unimaginable enterprise can do this I feel it’ll battle, and I feel it’ll be defeated by the market.
Rick Munarriz: Alicia,
Alicia Alfiere: I agree with Jason right here. Final quarter was spectacular. Revenues up 48%, money producing enterprise, administration raised steering. However, wow, it is valuation. Worth to gross sales above 100?
Rick Munarriz: Worth to salespeople value to gross sales.
Alicia Alfiere: Proper, value to gross sales. We’re not even speaking price-to-earnings or something like that. Priced past perfection, defeat.
Rick Munarriz: Lastly, let’s shut with former Rule Breaker Celsius up 150%. Alicia, I am going to begin with you.
Alicia Alfiere: It is acquisition of Alani Nu appears to be serving to Celsius, and the highest line actually accelerated this final quarter. Once more, partially because of that acquisition. It has momentum, so I am pondering it will be, however anybody who has been watching this inventory during the last little bit is aware of it has been a curler coaster, and it might simply as simply fall into that defeat class.
Jason Corridor: At the same time as a lot because the inventory has come up, I feel the market remains to be has actually low expectations for the enterprise. The Pepsi distribution deal was nice till it wasn’t. That is a problem. The core Celsius manufacturers have been fairly flattish. Worldwide market is absolutely extensive open. Alani Nu expands them and actually offers them a variety of management over that cohort of the market the place they’re actually dominant. I consider these three, that is the one which’s almost certainly to beat, so I will say I feel it will be.
Rick Munarriz: Alright, nice. So, Alicia and Jason, thanks for making this Monday extra magic and fewer manic. As at all times, folks on this system might have curiosity within the shares they discuss, and the Motley Idiot might have formal suggestions for or towards, so do not buy or promote shares primarily based solely on what you hear. All private finance content material follows Motley Idiot Editorial requirements and isn’t permitted by advertisers. Advertisers are sponsored content material and offered for informational functions solely. To see our full promoting disclosure, please try our present notes. For Alicia Alfiere, Jason Corridor, and the complete Motley Idiot Cash staff, I am Rick Munarriz. I am going to gladly pay you Tuesday for our Motley Idiot Cash immediately.
