Why These Restaurant Stocks Fell Hard This Week
Several restaurant stocks, including Shake Shack (NYSE: SHAK), Bloomin' Brands (NASDAQ: BLMN), and BJ's Restaurants (NASDAQ: BJRI) fell hard this week, declining by between 5% and 15% through Thursday trading compared to a 6% slump in the S&P 500, according to data provided by S&P Global Market Intelligence. The drops added to losses for these stocks so far in 2022, as each one is underperforming the wider market's 23% decline.
The sell-off was powered by worries about the impact of inflation on profits over the coming quarters. Wall Street is also increasingly concerned about a recession on the way that might disproportionately hurt these consumer discretionary businesses.
Shake Shack, Bloomin' Brands, and BJ's Restaurants each cater to different customers. But they are all located in the restaurant industry, which is a consumer discretionary category that is sensitive to any economic slowdown. This segment tends to enjoy strong growth during periods of rising consumer spending, and investors have seen evidence of this boom in recent results.
Source Fool.com
