Despite overall industry headwinds including weaker customer traffic and rising operating expenses, 2018 has seen a handful of restaurant stocks deliver great returns. Big winners have included Domino's Pizza, Fiesta Grill, and Chipotle Mexican Grill. That said, the overall trend for the industry has been negative, with the Dow Jones Restaurants & Bars Index dipping nearly 3%. 

With the year a little more than half over, it's a good time to take stock of some of the restaurant industry's biggest underperformers so far. Read on to see why Zoe's Kitchen (NYSE:ZOES), Arcos Dorados Holdings (NYSE:ARCO), Del Frisco's Restaurant Group (NASDAQ:DFRG), Biglari Holdings (NYSE:BH), and Yum China Holdings (NYSE:YUMC) have posted big losses in 2018 -- and where each stock ranks on the list of the industry's biggest losers so far.

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5. Yum China Holdings: Down 16%

Yum China Holdings, which owns and operates franchised restaurants including Pizza Hut, KFC, and Taco Bell in the Chinese market, has posted double-digit share price declines this year. The 2018 sell-off comes on the heels of the stock posting a 53% gain in 2017 and appears to have been primarily driven by poorly-received earnings reports and unfavorable analyst coverage.

YUMC Chart

Yum China Stock Performance, data by YCharts.

Yum China stock dipped following the publication of the company's fourth-quarter results on February 7. Sales for the quarter climbed 13% compared to the prior-year period, and the company posted a loss of $0.23 per share. However, the loss came from a one-time charge stemming from corporate tax reform in the U.S., and adjusted earnings for the period came in at $0.19 per share -- a 12% increase year over year.

Yum China's next big stock decline came after the company reported first-quarter results on May 1. While earnings actually came in above the market's expectations, disappointing sales at Pizza Hut locations prompted a steep share-price dip. Shares then fell more than 6% on July 20 after a Bank of America analyst lowered his rating on the stock from "neutral" to "underperform" and reduced his price target from $44.30 to $34.

4. Del Frisco's Restaurant: Down 24%

Two disappointing quarterly reports have put a damper on Del Frisco's stock. The steakhouse chain's share price fell after the company reported fourth-quarter earnings results on March 8. Total revenue climbed 2.3% year over year in the fourth quarter, but comparable restaurant sales fell 1.6% as increased per-check spending was not enough to offset a 4.7% drop in customer traffic compared to the prior-year period. The company also issued guidance for the current fiscal year that came in below the market's expectations.

DFRG Chart

Del Frisco's Restaurant Group Stock Performance, data by YCharts.

The steakhouse chain's shares sold off again following the company's earnings release in May. Adjusted earnings per share came in at $0.10, falling well short of the average analyst estimate of $0.19. Comparable sales fell roughly 3.6% year over year as customer traffic tumbled 9.3%. Del Frisco's announcement that it planned to pay $325 million to acquire Barteca (the owner of the Barcelona Wine Bar and Bartaco chains) also does not appear to have been a hit with shareholders.

3. Arcos Dorados Holdings: Down 31%

Arcos Dorados is an owner and operator of McDonald's franchise restaurants, and is currently the fast-food giant's largest franchisee in terms of revenue and store count. The company's share price climbed roughly 78% in 2017, but its stock has sold off this year -- with the biggest declines coming in the lead-up to and following the publication of its first-quarter earnings results in May. 

ARCO Chart

Arcos Dorados Stock Performance, data by YCharts.

The bulk of Arcos' restaurants are located in Latin America, and ongoing political and economic instability in Venezuela weighed on the company's results in the first quarter. Adjusted EBITDA fell 38.4% and net income fell 98.7% year over year when the negative impact from currency fluctuations and the Venezuela business were factored into the period's results. Adjusted earnings excluding the Venezuela business for the quarter fell from $0.19 per share in the prior-year quarter to $0.06, missing the average analyst estimate of $0.08. 

2. Biglari Holdings: Down 32%

Biglari Holdings is the parent company of fast-casual chain Steak n' Shake and buffet-and-steakhouse combo restaurant Western Sizzlin'. It also owns Maxim magazine, though the publication accounts for a small portion of its sales. Biglari has seen its stock plunge roughly 32% in 2018 due to a controversial stock split and poor first-quarter earnings results published in May.

Biglari voted to implement a procedure to split the company's stock into two classes of shares on April 26 -- a move widely viewed as giving CEO Sardar Biglari more control of the company. Standard & Poor's then announced that it was removing Biglari Holdings stock from the S&P Small Cap 600 Index, prompting shares to sell off.

Things didn't get better for shareholders following the company's first-quarter earnings report. Steak n' Shake suffered a 7.2% year-over-year decrease in customer traffic and a 1.7% same-store sales decline. The company's losses narrowed from $42.72 per share in the first quarter of 2017 to a per-share loss of $5.15 in this year's period, but the big swing was the result of improved performance for the company's investments.

There was little good news when it came to Biglari's business operations. As with other restaurant stocks that have posted big losses in 2018, increases in average check driven by pricing hikes have not been enough to compensate for falling traffic.

1. Zoe's Kitchen: Down 38%

Zoe's Kitchen stock took a beating after the company published worrying first-quarter results in May -- echoing a common theme among 2018's worst-performing restaurant stocks. The fast-casual chain's share price fell roughly 40% in the day of trading that followed the earnings release.

ZOES Chart

Zoe's Kitchen Stock Performance, data by YCharts.

Sales climbed 12.7% to reach $102.1 million last quarter, but the business went from breaking even in the first quarter of 2017 to posting a per-share loss of $0.12 in this year's period. The revenue growth was also nothing to celebrate, because Zoe's added 11 new company-owned locations in the quarter, bringing its total restaurant count to 254 as of April 16. 

Comparable restaurant sales stumbled another 2.3% year over year, following a 3.3% decline in the prior-year quarter. Making matters worse, the company cut its guidance for the remainder of the year and announced it had formed a committee to explore strategic alternatives -- a possible sign that a sale of the business or big shake-ups could be on the way.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill and Zoe's Kitchen. The Motley Fool has a disclosure policy.