Market Overview

Restaurant Stocks Fall On Heightened Global COVID-19 Concerns

Restaurant Stocks Fall On Heightened Global COVID-19 Concerns

Global fears over an increase in COVID-19 cases was one of the contributing factors of markets trading down Monday. The S&P 500 fell 1.2% to $3,281, its fourth straight day of declines.

A rising number of COVID-19 cases has been seen in regions like Spain, France and the United Kingdom. Denmark, Greece and Spain have all placed new restrictions on activity in response to the increased number of cases in the region. The United Kingdom is considering a national lockdown in response.

See Also: Peloton, Zoom, More Stay-At-Home Stocks Hold Up During Market Downturn

Restaurant Stocks Fall: One of the hardest-hit sectors of the global pandemic has been the restaurant sector. In the U.S., various states have banned eating out at restaurants or in a limited capacity. Restaurants that are more dependent on sit-down traffic and sales got hit hard on Monday.

  • Ruth’s Hospitality Group Inc (NASDAQ: RUTH) saw shares fall 8% to $10.61
  • Carrols Restaurant Group Inc (NASDAQ: TAST) fell 5.2% to $6.20
  • The Cheesecake Factory (NASDAQ: CAKE) shares fell 5% to $27.86
  • Denny’s Corporation (NASDAQ: DENN) shares fell 7% to %9.73
  • Red Robin Gourmet Burgers (NASDAQ: RRGB) shares fell 8% to $13.21
  • Dine Brands Global (NYSE: DIN) shares fell 6% to $52.94

The Invesco Dynamic Leisure and Entertainment ETF (NYSE: PEJ) fell 3% to $32.23. Over 35% of the ETF's assets are in restaurant stocks.

QSR Fare Better: Quick service restaurant stocks didn’t fall as far Monday, given their lower reliance on sit-down sales and a growing shift to takeout and home delivery.

  • Yum! Brands Inc (NYSE: YUM), owner of Taco Bell, Pizza Hut and KFC, saw shares fall 3% to $89.31.
  • McDonalds Corporation (NYSE: MCD) shares fell 2% to $216.41 less than a week after hitting all-time highs on the strength of its new Travis Scott promotion.
  • Chipotle Mexican Grill (NYSE: CMG) shares fell 1% to $1,206.52.
  • Starbucks Corporation (NASDAQ: SBUX) shares fell 1% to $83.89.

Several Winners: The restaurant industry didn’t see all red on Monday, as pizza stocks and delivery-focused stocks traded higher.

  • Dominos Pizza (NYSE: DPZ) shares were up 2% to $404.97.
  • Papa Johns International (NASDAQ: PZZA) shares traded up 3% to $84.47. Both these pizza companies hit new 52 week highs in the last two months and are up over 30% in 2020.
  • Wingstop Inc (NASDAQ: WING) shares were up 4% to $137.73. Shares are up over 50% in 2020.

Photo by Cbraccialini via Wikimedia. 


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