DRI - Why Some Restaurant Stocks Are Falling Today
Shares of many restaurant-chain operators fell hard on Tuesday. Olive Garden parent company Darden Restaurants (NYSE: DRI) fell as much as 6.1%, Outback Steakhouse owner Bloomin' Brands (NASDAQ: BLMN) dropped as low as 11.6%, fast-casual burger chain Red Robin Gourmet Burgers (NASDAQ: RRGB) bottomed out at a 12.6% drop, and high-end steakhouse operator Ruth's Hospitality Group (NASDAQ: RUTH) notched an 18.9% collapse at its worst.
None of these consumer discretionary businesses had any company-specific news to share today. After several days of rosy COVID-19 news, the coronavirus news flow soured and the restaurant sector suffered a sharp correction as a result.
Most of these stocks had been soaring in recent days, based on optimistic assumptions around states scaling back their COVID-19 lockdown orders. Ruth's Hospitality rose 54% over the first seven days of June, Red Robin gained 38% in the same period, Bloomin' posted a 24% return, and Darden trailed the pack with an 8% gain. Today's correction took the edge off of these gains.