Why Many Casual Dining Stocks Crashed Hard Today
Many casual dining chains took a pummeling on Thursday as concerns about the COVID-19 coronavirus continued to grow. On a day when the S&P 500 closed 3.3% lower and fast-food giants Wendy's (NASDAQ: WEN) and McDonald's (NYSE: MCD) fell by roughly 4% each, sit-down dining chains dipped much lower. Olive Garden parent Darden Restaurants (NYSE: DRI) fell 7.5%, Western-themed steakhouse operator Texas Roadhouse (NASDAQ: TXRH) dropped 10.3%, and Chili's owner Brinker International (NYSE: EAT) took a 10.6% haircut.
The coronavirus continues to spread across the country, as 221 U.S. cases have been confirmed so far, including 12 deaths. California declared a state of emergency on Thursday as the disease led to its first death there. Emergency management teams, school districts, and other official bodies from coast to coast are urging Americans to wash their hands more often, avoid touching their faces -- and limit exposure to large crowds.
That last one is bad news for an industry that depends on consumers getting out of the house to have a casual meal in a sit-down restaurant. Fast-food vendors are seen as less intimidating since you can just swing by their drive-through windows with minimal human contact.
Source Fool.com
