Why Red Robin Gourmet Burgers, Priceline Group, and Avis Budget Group Slumped Today
Tuesday was a sluggish day on Wall Street, with the Dow Jones Industrials eking out a tiny gain and most major benchmarks modestly losing ground. After a long period of near straight-up movement in the stock market, investors seemed to pause and consider the potential that the near-perfect environment they've enjoyed throughout 2017 might not turn out the way they had hoped. Questions have arisen about the viability of the current tax reform proposal, and following defeats on the healthcare front for congressional Republicans earlier in the year, market participants see the prospect for crushing gridlock that could stymie any efforts toward investor-friendly policy moves. Moreover, some individual companies suffered from bad news that cast a pall over Wall Street. Red Robin Gourmet Burgers (NASDAQ: RRGB), Priceline Group (NASDAQ: PCLN), and Avis Budget Group (NASDAQ: CAR) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Shares of Red Robin Gourmet Burgers fell by nearly 30% after the high-end burger chain reported its third-quarter financial results Monday night. Red Robin said that revenue rose by just 2.3% on a 0.1% decline in comparable-restaurant sales, and adjusted earnings were down more than 40% from year-ago levels. CEO Denny Marie Post tried to build optimism by noting that the restaurant's sluggish results were better than the overall casual dining industry's performance, but investors seemed nervous about a strategic decision to stop adding new restaurants to its network after the end of 2018 to assess new approaches. The news was a crushing blow to Red Robin's positive momentum from past reports, and investors now have to question whether the restaurant industry at large will see another letdown before it can recover.
Image source: Red Robin Gourmet Burgers.
Source: Fool.com
