Restaurants Industry: Fast Casual: After a watershed 2025, revisiting segment and company views

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Restaurants Industry: Fast Casual: After a watershed 2025, revisiting segment and company views

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Restaurants Industry

Fast Casual: After a watershed 2025,

revisiting segment and company views

Price Objective Change

Demand grows faster than industry, but so do units 01 July 2026

Fast casual’s share of wallet has tripled since 2008 – increasing in every year except Equity

2021 -- primarily through share gains from full-service restaurants, though traditional United States

QSRs have also been donors within some categories (e.g., chicken). But, while demand Restaurants

has outpaced other major categories (QSR, CDR, and Fine) so has unit growth. We Sara Senatore

expect growth to moderate in 2026, giving demand time to catch up with supply. Research Analyst

BofAS

Scale, competition, operating model dictate unit returns +1sara.senatore@bofa.com646 743 2110

FCs compete most closely with restaurants in their segment, but they also compete Isiah Austin

more indirectly with QSRs and CDRs, suggesting that relative scale – and price – are ResearchBofAS Analyst

important across segments. While FCs overall tend to have higher margins – as they +1 646 855 0472

isiah.austin@bofa.com

combine limited menus and service with higher average checks – the assembly line

Grace Nguyen

production model (e.g., CMG, CAVA) is most efficient. We reiterate all of our ratings and Research Analyst

POs, with the exception of our updated SG PO ($8.90, higher vs $7.50 prior) and CAKE BofAS

+1 646 855 2849

PO ($79, higher vs $66 prior). grace.nguyen@bofa.com

CAVA: Mediterranean cuisine and a high degree of customization align with LT trends.

Comp drivers (marketing, loyalty, menu news) are in early innings. RLM and G&A should Glossary/stock symbol key:

lever with topline.