What’s eating restaurant stocks? That’s a question I posed last month after noting the lousy performance of many names in the sector. Today, the Wall Street Journal did a deep dive on the same topic, noting the wave of recent restaurant bankruptcies. Turns out many restaurant chains expanded too quickly and took on too much debt at the same time many potential customers (especially younger ones) have increasingly decided to cook and eat at home with friends. There could be some good short sale and/or put option plays in the space, something I’ll be looking at in my All Weather Trader service.
Restaurants Headed South?
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{ 2 comments… read them below or add one }
Hi Mike
Some of our largest consumer groups have less income to spend because of the Fed interference in interest rate movements. The impact of these rate controls will have a continuing effect on spending.
My family and I don’t go out to eat very often, but the last several times we have gone to a restaurant to eat, the food has not been what it should be (cooked improperly, cold when it finally arrived, etc…) and the service has been awful (can’t seem to bring out the extra sauce we’ve asked for, no refills on our drinks, etc…) and when we addressed our concerns to our waiter/waitress, they turned quickly to blame some other member of their staff!! This has happened over a period of a couple of weeks, at different restaurants…so we get the impression that this lack of quality and care seems to be widespread!
Let them all go under for all I care!! I’ll stay home and eat from now on!! Restaurants, you have only yourselves to blame!!!