Restaurant companies have begun warning Wall Street that they will be modifying 2020 financial guidance in the wake of the coronavirus pandemic as stock prices continue to slide.
As the stock market suffered an historic decline Monday, New York City-based Shake Shack Inc., the fast-casual burger chain, warned investors it would be adjusting its financial guidance for the year because of the novel coronavirus pandemic.
“Due to the current unprecedented market conditions domestically and internationally, the company is withdrawing financial guidance for the fiscal year ending Dec. 30, 2020,” the 280-unit fast-casual burger brand said in a news release.
“Shake Shack will provide an update on the business on its first quarter earnings call,” the company said.
Meanwhile, Wall Street on Monday suffered massive declines, falling more than during the market collapse in 1987, with the Dow 30 down 12.9% to 20,188.52, the Nasdaq down 12.3% to 6,904.59 and the S&P 500 down 12% to 2,386.13.
While earlier declines among restaurant company stocks had been skewed more toward full-service brands, Monday’s declines were in all sectors but especially deep for social-gathering brands like Dave & Busters Entertainment Inc., which fell 45.7% to $7.20 a share
Spartanburg, S.C.-based Denny’s Corp. said Monday that “given the dynamic and evolving economic conditions throughout the United States and the world, the company expects consolidated results to be materially affected for the second quarter and full year of fiscal 2020.
Denny’s added that “the company will update its guidance when it can reasonably estimate the impact of the coronavirus and the changing conditions.”
The 1,700-unit family-dining chain said it had secured additional funding through its revolving credit facility to provide enhanced financial flexibility “in light of uncertain market conditions arising from the COVID-19 pandemic” and that it was ended its limited share-buyback program.
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Correction March 17, 2020: The headline has been edited to correct the restaurant brand name.
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