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Fast food up, fast casual down

The trends that favored fast casual for the past few years are suddenly benefiting the fast-food industry. Names that struggled at the start of the decade have begun to bounce back, while fast-casual companies are hitting their first roadblock. Many fast-food chains have successfully taken a page from the fast-casual book, by continually innovating on their menus and offering healthier options. This season we have already seen double-digit gains from McDonald's and Yum Brands, while fast-casual names such as Noodles & Company reported disappointing results, as well as Chipotle, which has been weak for a slew of other reasons. This week we get a burger throwdown when Wendy's and Jack in the Box take on the new crown jewel of fast casual, Shack Shack.

Kicking things off, Wendy's is scheduled to report first-quarter earnings tomorrow, before the market opens. Analysts are expecting earnings per share of 7 cents on $353.20 million revenue, according to the Estimize consensus data. Since its last report, earnings per share estimates have been cut by 20 percent for the quarter and now reflect a 20 percent expected decline from a year earlier. Revenue, on the other hand, is projected to contract 24 percent.

As the fast-food industry as a whole rebounds from its lows, Wendy's has followed suit. The past year saw losses slowly turn into profits, while sales are expected to show growth in the latter half of the year. Shares are now up nearly 19 percent in the last six months.

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Last quarter featured a 4.8...