EAT - Why Restaurant Stocks Crashed on Friday
Many household-name restaurant chains took a dive on Friday, in many cases breaking a strongly positive trend. A few minutes past noon, EDT, shares of Cheesecake Factory (NASDAQ: CAKE) and Outback Steakhouse parent Bloomin' Brands (NASDAQ: BLMN) both traded 14.6% lower. Denny's (NASDAQ: DENN) fell 15.4% and Chili's parent company Brinker International (NYSE: EAT) took a 17% haircut. Olive Garden operator Darden Restaurants (NYSE: DRI) followed the pack with a milder 9.1% drop, having recovered somewhat from an earlier 12.3% plunge.
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All of these stocks enjoyed fantastic gains earlier this week, driven by the seemingly inexorable progress of a massive bill to manage the economic impact of the coronavirus crisis. The $2.2 billion relief bill, unanimously approved by the Senate, includes loan forgiveness and payroll assistance measures for restaurants as well as a few thousand dollars in cash for each American family. The bonus cash should help families under "shelter-in-place" orders find room in their budgets for a few delivered restaurant meals.