The market is hitting new highs, but not every stock is going along for the ride. There were more than 260 stocks across the major U.S. exchanges hitting fresh 52-week lows over the past week, and some of the names might surprise you.
Dave & Buster's (NASDAQ:PLAY), New Age Beverages (NASDAQ:NBEV), and Lovesac (NASDAQ:LOVE) are three stocks that have fallen on hard times. They're all trading at their lowest levels in more than a year, even as the S&P 500 has soared 26% in 2019. Let's take a closer look.
Dave & Buster's
Dave & Buster's was unstoppable a couple of years ago. It was pioneering the "eatertainment" movement offering casual dining, a high-end sports bar, and a high-tech video game arcade all under the same roof. As long as the economy was humming along, Dave & Buster's would draw a crowd to its gargantuan locations.
But things haven't played out that way. The chain posted another rough quarter last week. Dave & Buster's posted single-digit top-line growth, but that was only because of its brisk expansion over the past year. Comps slipped 4.1%, and it sees negative same-store sales for the entire fiscal year. This isn't shocking, as Dave & Buster's has managed just one quarter of positive comps over the past two years.
Dave & Buster's is trying. It's building out more of the 40-foot-wide TVs that it calls a wow wall to broadcast major sporting events. It's also hoping the multiplayer games and the growing popularity of esports opens up new opportunities to engage its patrons. The bottom line is that if this is how Dave & Buster's is doing when the going is good, a lot of people don't want to see what will happen if we brace for a recession.
New Age Beverages
A year ago, investors were flocking to New Age Beverages as a cannabis play. The distributor of functional beverages was unveiling a line of CBD-spiked drinks ahead of easing regulations, and then it turned heads near the end of last year by striking an $85 million deal to buy the much larger Morinda.
But CBD beverages are still a hard sell, and it's a competitive niche in areas where it's allowed. New Age Beverages also took a hit last month after posting financial results that fell short of Wall Street's top- and bottom-line targets.
One of last year's more successful IPOs seemed to be Lovesac. The maker of stylish beanbag and modular couch furniture went public at $16 two summers ago, nearly tripling when it peaked in the springtime of this year. It's been all downhill -- like one of its beanbag chairs with a gaping hole as its proprietary Durafoam filling bleeds out -- since this year's highs. Lovesac stock has shed 77% of its peak value.
The biggest culprit for the market falling out of love with Lovesac is the rapidly slowing growth. Revenue has decelerated sharply in each of the past four quarters, going from a year-over-year surge on the top line of 71% five reports ago to just 25% last time out. Lovesac has also posted larger-than-expected deficits in two of the past three quarters, and it lowered the top end of its revenue guidance for the full fiscal year. Most furniture companies would love to be growing at a 25% clip, but investors paid a premium for Lovesac last year given its heady growth.