3 Fast Food Stocks Defying the Odds

Key Points

• Consumer dining trends are shifting from fast food at Quick Service Restaurants (QSRs) to fast-casual or sit-down restaurants that offer better value.
• Focusing on convenience, affordability, and healthy options has created a new dining dynamic, and Q2 earnings highlight which companies are meeting these trends.
• However, some QSRs, such as Dutch Bros, Taco Bell, and Domino's Pizza, are adopting these new preferences and using digital tech to lure customers back.

Earnings from Q2 are in, and fast food continues to fade from American eaters' appetites. For most of the post-pandemic era, fast-casual establishments have been stealing market share from Quick-Serve Restaurants (QSRs), and that trend accelerated again in Q2. 

Consumers are demanding more bang for their buck after years of elevated inflation, and fast food is failing to provide a decent value proposition. However, not every QSR is getting left in the dust. A few actually posted encouraging Q2 numbers with strong same-store sales growth, and today, we’ll examine what three of these restaurants are doing to fend off the fast casual attack. 

Shifting Consumer Trends Leaving Fast Food Restaurants Behind

Fast, affordable, and healthy have become the three pillars of the American restaurant goer, and that third item is starting to shift the landscape. Health-conscious diners are watching what they eat more than ever, and that’s an issue for QSRs like McDonald's Corp. NYSE: MCD and Wendy’s Co. NASDAQ: WEN, where calories and prices continue to increase. Fast casual can offer a more diverse set of dining options, including customizable menu choices, a better in-store experience, and the ability to order takeout or delivery.

Full-service restaurants are also closing the traffic gap on QSRs, but lower ticket sizes are blunting some of that progress. It’s the fast-casual segment that’s growing at a robust rate, and QSRs are trying to copy some of their popular trends to lure in new customers, such as:

• Loyalty programs to entice repeat business
• A unique and satisfying store experience, even if the visits are brief and convenient
• Healthy menu options that don’t sacrifice flavor or presentation 
• Customizable dining choices with takeout and delivery

Despite these shifting trends, QSRs still represent 80% of total restaurant transaction volume, so there’s plenty of revenue available for the companies that capitalize on consumer preferences. The three companies we’ll highlight below have plans to navigate these shifting seas, plus the results to back up their business models.

3 Fast Food Stocks Bucking the Trend

As we highlighted last month, restaurants that adapt to changing preferences are stealing market share from their competition. These three QSRs are instituting loyalty programs, enhancing the customer in-store experience, and adding new and unique menu items—and their stocks are reaping the benefits in the restaurant sector. 

Dutch Bros: Capitalizing on Starbucks’ Weakness

The new kid in town, Dutch Bros Inc. NYSE: BROS, is putting up some impressive numbers, including 6% same-store sales growth in Q2. The upstart coffee chain is also rapidly expanding in the U.S., and its stock finally broke through the post-IPO high it notched during the last public offering boom in 2021. Revenue growth surged for BROS in Q2 2025, expanding 28% to $415 million.

The EPS figure also beat analysts’ expectations, and the company raised its full-year guidance to a range of $1.59 billion to $1.60 billion in revenue. Dutch Bros is stealing share from competitors like Starbucks Corp. NASDAQ: SBUX through its unique in-store experience and community-based marketing. 

The company’s coffee slingers are called Broistas and are instructed to create a welcoming environment through upbeat conversations with customers, like remembering the names and orders of regulars. Dutch Bros is also constantly updating its menu, adding seasonal drinks or limited-time-only options to encourage return visits and enhance the ‘Instagrammability’ of its offerings.

The company opened 31 new stores in Q2, and its loyalty program has reached 70% adoption.

Yum Brands: Taco Bell Capturing Younger Clientele with Unique Promotions

Yum Brands Inc. NYSE: YUM is the parent of Taco Bell, KFC, and Pizza Hut. While the latter two chains struggle for relevance, Taco Bell's YUM shares have been buoyed by its leaning into Gen Z trends through wacky promotions, specialty menu items, and digital optimization.

Taco Bell’s marketing campaigns are built around influencers, social media, and SEO advertising, such as the successful ‘Live Mas’ campaign and the $5 box deal. 

Appealing to a younger clientele requires marketing savvy and a product that backs up the hype, and Taco Bell’s 4% same-store sales growth in Q2 is evidence of this success. At the same time, the company’s biggest competitor, Chipotle Mexican Grill Inc. NYSE: CMG, saw same-store sales decline 4%.

Chicken sales at Taco Bell are up 50%, and the company’s digital outreach is paying dividends with $6 billion in digital sales, a year-over-year (YOY) growth rate of 32%. Despite the struggles of KFC and Pizza Hut, YUM shares are up over 11% year-to-date (YTD).

Domino’s Pizza: Efficiency and Loyalty Programs Creating Frequent Customers

Shares of Domino’s Pizza Inc. NASDAQ: DPZ have corrected in the last month, but this could be a good buying opportunity for new investors. The company has conquered churning customer trends, and its loyalty programs and impressive efficiency are creating clients who return for pizza every Friday night.

Domino’s saw same-store sales growth of 3.4% in Q2, but the company missed EPS projections due to foreign currency headwinds, which caused consternation amongst investors, and the stock dropped 10% in the month following the report.

But Domino’s digital footprint continues to expand, and the company’s rewards program grew to nearly 36 million members last year. Domino’s isn’t just a pizza chain now; they’re a pizza-selling logistics company with a knack for turning infrequent guests into weekly visitors.

Now that the integration with DoorDash Inc. NASDAQ: DASH is complete, the company expects comps to grow in the second half of 2025.