The turn of the decade featured the creation of the fast casual sector that fuses the speed and efficiency of fast food with quality of casual dining. Chipotle Mexican Grill (CMG) is typically credited with starting this trend and also its most recent struggles. In late 2015 the first of many health scares broke out at a Chipotle restaurant in the United States causing a freefall in sales and the stock. While other operators haven’t had it as bad, there is still an evident slowdown occurring throughout the space. Popular names like Shake Shack (SHAK) and Noodles & Co have been hammered this year for consistently delivering decelerating growth. Early signs appear as if these trends will continue as we head into third quarter earnings season.

Chipotle

Chipotle is still having trouble getting out from under the numerous health outbreaks starting in late 2015. The burrito chain which was once heavily praised as revolutionizing the fast casual sector is now largely an afterthought to a catalog of other food chains, one being Shake Shack. Amid the turmoil, earnings and traffic trends have taken a dramatic downturn. Last quarter comparable restaurant sales decreased a 3.6% on a 16.6% decline in total revenue.

In an effort to regain customers, Chipotle has hit the ground running with new promotional campaigns and marketing initiatives. Some of these include Chiptopia which rewarded customers for frequent visits throughout the summer. More recently, the company launched free kid’s meals on Sundays and complimentary beverages for students. While Chipotle continues to win back the hearts of its once loyal customers, investors have hammered the stock. Shares are down 14% year-to-date and 36% in the past 12 months.

Shake Shack 

In its early days on the market, many investors were convinced that Shake Shack was well on its well to replacing Chipotle as the new fast of fast casual. Thanks to a string of slower than expected quarters those notions have receded. The burger chain has struggled to sustain high growth and rapid expansion as it goes through the maturation process. These growing pains are likely to continue for the near future until revenue and margins are commensurate with its value.

At the moment the stock is considered well overvalued given what they deliver quarter after quarter. Shake Shack shares have fallen 17% year to date and nearly 27% in the past 12 months.  

Panera 

Panera (PNRA) has been the most resilient across the fast casual sector. The bread maker remains dedicated to improving efficiency and quality to better meet its customers needs. This includes the recent move to only serve “Clean” bacon as opposed to what is found at McDonald’s. “Clean” simply insists that food doesn’t contain artificial ingredients while also shedding some light on the standards that Panera holds themselves to.

Meanwhile the continued rollout of Panera 2.0 is expected to enhance in store productivity. Still expectations are slightly muted heading into its third quarter earnings report. Analysts at Estimize are calling for earnings per share of $1.37 on $685.84 million in revenue. Compared to a year earlier this represents a 9% increase on the bottom line and 4% on the top.