Unlike most industries, where stocks often move together, restaurant stocks in 2025 look like they’re on completely different menus. Some names are serving up five-star gains… while others are choking on losses.
Take Potbelly (PBPB) - up more than 80% year-to-date. That’s a monster rally for a sandwich chain that’s been around for decades. On the flip side, Sweetgreen (SG) - the poster child for the “eat clean” movement - has plunged nearly 75% over the same period.
That’s a massive disparity. And it reveals something deeper happening beneath the surface of this market.
Comfort Food Is Beating Clean Eating
The companies feeding investors the fattest returns aren’t necessarily the ones feeding customers the healthiest food. In fact, the “unhealthy” brands - the ones dishing out burgers, sandwiches, and comfort food — are the ones thriving right now.
Why?
For one, value and consistency matter more than kale and quinoa in an inflation-sensitive world. Consumers are still feeling the pinch from higher prices. That makes affordable indulgence more appealing than ever. A $9 sub from Potbelly or a $4 hot dog from Nathan’s Famous (NATH) feels like a small treat that doesn’t break the bank - especially when compared to a $14 salad from Sweetgreen.
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Second, the health-food hype is wearing thin - unfortunately. Many of these “next-gen” restaurant concepts went public during the zero-rate boom. Investors bought into the idea that healthy, tech-driven dining would dominate the future. But as rates rose and profits mattered again, the market stopped rewarding story stocks and started rewarding results.
Profits Over Promises
It’s a reminder that Wall Street - like Main Street - can be fickle. Tastes change. Trends fade. But a solid business model and loyal customer base will always be on the menu for long-term investors.
So while everyone else is counting calories, I’m counting cash flows. And right now, the winners are the ones serving up profits, not promises.
Bottom line: In 2025, fundamentals are back in fashion - and sometimes, the “bad” restaurants are doing the best.
Here’s to the future,
Matt McCall
Editor, Market Insights
