By Evie Liu

Fast-casual restaurant chains are opening new stores at an aggressive pace. Whether they can copy the success of their existing stores will be key to a rebound in their stock prices.

Wingstop, a chicken-wing chain with nearly 3,000 locations, and Cava Group, which offers casual Mediterranean meals at more than 400 stores, differ widely both in scale and their menus. But the two have one thing in common: Both have grown their store footprint by nearly 20% over the past 12 months.

In the latest quarter ended in September, Wingstop opened 114 net new restaurants, marking the fifth consecutive quarter of more than 100 new openings. That aggressive pace has brought its store count up 19% over the past year to nearly 3,000.

The momentum will likely continue. With a swelling pipeline of franchise commitments, Wingstop expects unit growth in the midteens range for 2026. The chain aims to expand by at least 10% annually, eventually reaching 10,000 restaurants globally.

Likewise, Cava added 74 new restaurants over the past four quarters, boosting its total footprint by 18% to 415 across the nation. The majority of the new openings were in suburban areas as the chain aims to tap the rising appetite among the middle class for ethnic food.

Cava plans to grow its restaurant count by 18.5% to 19% this year, followed by growth of at least 16% in 2026. Management aims to reach 1,000 restaurants by 2032.

Whether they can achieve the targeted scale would be key to Wingstop and Cava's share prices. Both stocks have tumbled over the past year as investors become cautious of their highflying valuations. As of Monday's close, before the companies posted their third-quarter earnings results, Wingstop stock was down 25%, while Cava had declined 53%.

The main concern is the slowdown of same-restaurant sales growth, which used to be double-digits at both chains, but now are flat or even negative.

Cava's comparable sales increased only 2% year-over-year in the past two quarters. There are signs of a plateau: In the September quarter, the company said growth was primarily from higher menu prices while guest traffic was roughly flat.

Things are even more concerning at Wingstop, where same-store sales declined 5.6% in the third quarter, following a 1.9% slip in the previous three months.

Less spending from Hispanic and low-income consumers were the main drag, CEO Michael Skipworth said on the earnings call. In the third quarter, the softness has broadened across the industry and more geographies to the middle-income consumer in some areas, he adds.

Wingstop management believes the headwinds should be temporary. The chain has been rolling out "Smart Kitchen," which uses automation and digital tools to make ordering, cooking, and delivery faster and more efficient. The system has been in place in over 2,000 restaurants and is on track to reach all domestic locations by year end.

Restaurants with Smart Kitchen consistently deliver a 10-minute speed of service, which is 50% faster than before, the company said. Along with a new marketing campaign and renewed loyalty program, this should attract more customers and boost the chain's average unit volume -- annual sales per location -- from current $2 million to the long-term goal of $3 million, management said.

Raymond James analyst Brian Vaccaro noted that comparable sales at Wingstop's company-operated stores were up 3.8% from a year ago in the third quarter, outperforming franchised stores by over nine percentage points. This could be "at least partially due to the benefits of Smart Kitchen," he said.

Investors seem positive for now. Despite the decline of same-store sales posted on Tuesday, Wingstop stock jumped 15% from Monday's close.

At Cava, the average unit volume is already at $2.9 million. As the chain opens more restaurants in suburbs across the nation, maintaining that level would be important. Fast-casual menus generally have higher prices than fast food. Investors would watch whether a Cava bowl, usually priced at nearly $15, remains appealing to a wider population.

So far, it looks promising. CEO Brett Schulman noted that Cava's 2025 new restaurants have an average unit volume of more than $3 million, similar to -- if not better than -- existing stores. This is "clear proof of the brand's portability and resonance across the country," he said, "The underlying strength of our model is evident."

"The robust performance of new units in both new and existing markets speaks to the ultimate opportunity for Cava to become a much larger brand relative to its 400-plus units today," wrote William Blair analyst Sharon Zackfia in a Wednesday note.

Write to Evie Liu at evie.liu@barrons.com

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November 06, 2025 11:18 ET (16:18 GMT)

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