Following a weak earnings season, several fast food stocks are feeling the pinch. However, a few names have remained resilient amidst the turbulence. 

The OG fast food chain, McDonald’s (NYSE:MCD), reported slow sales growth for its fourth straight quarter as the company faces pressure to cut prices. The slowdown isn’t unique to the company as many of its competitors, including KFC and Burger King, reported several store closures in the last two years. The decline can be chalked up to macroeconomic trends, with looming inflation and higher debt levels dampening consumer spending.

But it’s not all doom and gloom for fast food chains, as several indicators point to better days ahead. For instance, some restaurants have been able to sustain demand with several value meal deals and discounts. Moreover, the anticipated interest rate cut at the Fed’s meeting in September could certainly reignite demand for fast food. Overall trends in the fast food industry also remain optimistic, with global fast-food sales amounting to $750.4 billion in 2023. Fast-food consumption remains strong, with most Americans indulging in fast food one to three times a week.

Wingstop (WING)

Wingstop (NASDAQ:WING) and its flavorful sauces are experiencing a strong growth trajectory. In the competitive world of fast food, the company’s rise to the top was swift and impressive. Its success can be attributed to a high-growth business model and good food.

The business of chicken is a lucrative one, with demand in the category nearly twice as high as other meats. Wingstop capitalized on its potential with a range of unique sauces to complement its wings. This drew a lot of interest from Gen Z and younger Millennials. It was amplified by a successful franchise model that led to consistent growth in store numbers over the years. As of Q2 2024, Wingstop has 2,352 locations of which only 52 are owned by the company — the rest are franchised.

These factors resulted in a winning recipe, which was fairly evident in its Q2 earnings report. Domestic same-store sales rose 28.7% while revenue increased 45.2% year-over-year (YoY). Looking ahead, Wingstop anticipates a 20% rise in domestic same-store sales for the full year.

Wingstop is in a league of its own when it comes to wings. Coupled with a lucrative business model, this is one of the best fast food stocks on the market right now.

Shake Shack (SHAK)

Founded by famous restaurateur Danny Meyer, Shake Shack (NYSE:SHAK) is redefining what a fast food chain looks like. The company has blurred the lines between casual and fine dining by adopting the speed and efficiency of a traditional fast food joint whilst ensuring its food is made with the highest quality ingredients. The company also introduced combo meals and drive-thru options, commonly found in fast food companies.

Shake Shack’s ability to strike the perfect balance between convenience and high-quality fast food has resulted in tremendous gains over the years. In its latest earnings report, the company reported a massive jump in earnings to 27 cents per share versus 18 cents per share in Q2 of last year. Total revenue grew 16.4% YoY while operating income doubled. Much of this growth was fueled by higher prices and in-store sales. Looking ahead, the burger company expects revenue to rise by 14% to 15% for the full year.

Shake Shack is one of the most compelling fast food stocks on the market right now. An appealing menu coupled with fast food-esque efficiency and impressive financials gives it a long runway for growth.

Domino’s (DPZ)

Despite the recent cooldown in fast food stocks, Domino’s (NYSE:DPZ) continues to dominate the pizza wars. The company’s fast pizza service and wide digital and store presence have made it a go-to option for customers seeking a quick and tasty meal. And despite increased competition in space over the years, Domino’s stuck to the basics and weathered the headwinds with ease.

While concerns surrounding inflation and decreased consumer spending have pushed the stock lower in recent months, the dip presents a great buying opportunity. Its Q2 earnings serve as a great indicator. Dominos blew earnings expectations out of the water at $4.03 per share versus analysts’ estimate of $3.65 per share. Total revenue for the period grew 7% YoY, in line with expectations. Although the company indicated a slowdown in expansion in the coming months, it maintains its target of a 7% growth in global sales for the full year.

DPZ’s price decline is the result of macroeconomic headwinds, but its strong fundamentals make this stock a solid buy for future gains.

On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.