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These Retail and Experiential Stocks Crashed Over Heightened Coronavirus Fears

By Jason Hall - Updated Mar 11, 2020 at 5:30PM

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COVID-19 has officially reached pandemic levels, and investors seem to be selling everything that involves human interaction.

What happened?

Things are going from bad to worse for any company that is involved in retail, or anything that requires in-person human interaction. Retail and experiential stocks fell hard today on this afternoon's news of the World Health Organization's declaration that the COVID-19 disease caused by the novel coronavirus has reached pandemic levels

The following stocks are some of the hardest-hit on the day: 

Price Change on March 11
Etsy (ETSY 0.51%) (12%)
Live Nation Entertainment (LYV 5.98%) (16.6%)  
Mobile Mini (MINI) (8.7%)  
Planet Fitness (PLNT -2.50%) (9%)
RH (RH 5.16%) (13.7%)
Vail Resorts Inc (MTN 2.08%) (12.5%)
Wayfair (W 4.45%) (8.6%)
Williams-Sonoma (WSM 1.69%) (6.6%)

As of market close on March 11. Data source: YCharts.

While several of the stocks in the table above rebounded before market close, all had fallen more than 10% at some point in late trading. Added on top of what's already been an ugly past few weeks, the group of stocks above have lost between 18% and 54% of their value since early February.

LYV Chart

LYV data by YCharts

So what

As the market's reaction has shown, uncertainty and fear are in control as investors look to get out of stocks with big exposure to what is expected to be a weak -- and potentially even recessionary -- economic environment going forward. That's particularly true for companies like event promoter Live Nation Entertainment and resort operator Vail Resorts. We have already seen hundreds of large conferences and festivals canceled, including some of the biggest, and Vail Resorts just tossed its guidance for 2020, citing uncertainty. 

Group of people wearing surgical masks.

Who wants to go shopping? Apparently nobody. Image source: Getty Images.

Similarly, retailers such as RH and Williams-Sonoma, which count on steady traffic to their retail stores, are feeling the pinch as investors sell in fear of what could prove a painful 2020. The global spread of a highly contagious -- and deadly -- virus is likely to affect traffic as more people begin practicing "social distancing" to reduce the risk of infection. 

But it's not just brick-and-mortar retail that's taking a hit. Online e-commerce platforms like furniture retailer Wayfair and handmade and vintage goods marketplace Etsy are both taking it on the chin over worries that the coronavirus could hinder the economy and hurt their sales. Even Mobile Mini, which provides portable storage solutions to many companies including retailers, would likely lose out if the economy were to weaken

Now what

There's little doubt that right now, Mr. Market clearly sees bad days ahead for all of these companies. At market close today, the Dow Jones Industrial Average officially entered "bear market" territory, falling more than 20% from a high for the first time since 2009. And if the worst fears about the coronavirus' impact on the global economy prove true, there very well could be worse days to come. 

But with that said, it's often when it looks like things will only get worse that investors can find excellent opportunity to buy. After all, each of these eight companies have solid track records of delighting their customers, and have some degree of competitive advantage that sets them apart. 

That's not to say that the next few months -- or possibly longer -- won't be painful. If COVID-19 outbreaks lead to wide-scale quarantines, or even if more people choose to self-quarantine, cut back on concerts or travel, or otherwise reduce personal exposure to public events and places, business could get worse for these companies before it gets better. 

But looking out a year or two or five, my expectation is that all eight of these companies will not only survive the bear market (and possible recession) of 2020, but they will be businesses that thrive in the future. And there's a good chance that investors who buy during this ongoing sell-off will enjoy market-beating returns as a result. 

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Stocks Mentioned

Vail Resorts, Inc. Stock Quote
Vail Resorts, Inc.
$234.16 (2.08%) $4.78
RH Stock Quote
$276.38 (5.16%) $13.56
Williams-Sonoma, Inc. Stock Quote
Williams-Sonoma, Inc.
$112.34 (1.69%) $1.87
Mobile Mini, Inc. Stock Quote
Mobile Mini, Inc.
Live Nation Entertainment, Inc. Stock Quote
Live Nation Entertainment, Inc.
$90.50 (5.98%) $5.11
Wayfair Inc. Stock Quote
Wayfair Inc.
$49.72 (4.45%) $2.12
Etsy, Inc. Stock Quote
Etsy, Inc.
$79.24 (0.51%) $0.40
Planet Fitness, Inc. Stock Quote
Planet Fitness, Inc.
$67.82 (-2.50%) $-1.74

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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