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Daunting road for distressed retail as COVID-19 hotspots emerge

  • The fragile apparel and restaurant sectors are facing another negative few weeks of COVID-19 developments as cases soar. A record level of hospitalizations in Texas tied to the virus has already prompted Governor Greg Abbott to limit capacity at restaurants and close bars, while shopping centers in Texas are reportedly seeing less traffic.
  • If there is good some news in the mix, it is that parts of the U.S. are in much better shape than the hotspot states grabbing all the attention as seen in the Bank of America chart below. For investors, this could make geographic mix of sales an important factor (Boot Barn (NYSE:BOOT) vs. Dunkin' Brands (NASDAQ:DNKN)?) in the near term.
  • Still, for the retail chains and restaurant companies facing stretched balance sheets, the prospect of a long road to "normal" retail traffic is daunting.
  • The worst performers in apparel retail for the year are mall dwellers Ascena Retail (NASDAQ:ASNA) -81%, Tailored Brands (NYSE:TLRD-76%, RTW Retailwinds (NYSE:RTW-72%, Express (NYSE:EXPR-71%, Dillard's (NYSE:DDS-67%, Macy's (NYSE:M-65% and Chico's FAS (NYSE:CHS-65%.
  • The worst performers in the restaurant sector for the year are Red Robin Gourmet Burgers (NASDAQ:RRGB-71%, Dave & Buster's Entertainment (NASDAQ:PLAY-69%, Ruth's Hospitality (NASDAQ:RUTH-64% and Dine Brands Global (NYSE:DIN-53%.
  • ETFs: XLY, XRT, VCR, FDIS, RTH, EMTY, RETL, IYC, WANT, FXD, UCC, SCC, RCD, PASS, JHMC, FTXD

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Related Stocks

SymbolLast Price% Chg
ASNA--
Ascena Retail Group, Inc.
TLRD--
Tailored Brands, Inc.
RTW--
RTW Retailwinds, Inc.
EXPR--
Express, Inc.
DDS--
Dillard's, Inc.