Profit at U.S. restaurant companies is widely expected to grow in the second quarter, with companies’ individual strengths expected to overshadow continuing pressure from commodity costs. Yum Brands Inc. (YUM) and McDonald’s Corp. (MCD) recently have fueled profitability with breathless expansion in China, where market growth has outpaced the U.S. Yum leads the pack, and it hopes to keep spreading not only with its traditional chains but also with home-grown Chinese brands. McDonald’s, its biggest competitor there, has significantly fewer locations but is aiming to add more there as part of a worldwide store-count expansion.
Eager investors have pushed Starbucks Corp.’s (SBUX) stock price to its highest level ever, anticipating the benefits of the coffee chain’s filtration into the single-serving-cup sector and its push to control more of its products sold outside its cafes. Chipotle Mexican Grill Inc. (CMG) has watched its share value continue to reach new heights despite a widening investigation into workers’ immigration status, but the company lately has been a sound bet; its results consistently have outpaced average estimates in the past two years.