Please ensure Javascript is enabled for purposes of website accessibility

Why Dave & Buster's, Cheesecake Factory, and Brinker International Were Falling Today

By Rich Duprey – Jun 26, 2020 at 4:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors seem to have lost their appetite for restaurant stocks.

Shares of most restaurant stocks were falling hard on Friday as fear over a surge in coronavirus cases caused Texas to reverse its policies on reopening its economy. One day after it had paused the process, it said it was closing the state down again.

Dave & Buster's Entertainment (PLAY -1.40%) was among the worst hit restaurants, with shares falling 12%, but Cheesecake Factory (CAKE -2.33%) was down 9%, and Brinker International (EAT -2.54%), the owner of Chili's and Maggiano's Little Italy, was falling 4%.

Group of friends being served by a waiter.

Image source: Getty Images.

The adult food and entertainment chain Dave & Buster's is bearing the brunt of investor worry because, unlike many other restaurants, it doesn't have a takeout or delivery option available; its experience is built on customers being in the restaurant. 

CEC Entertainment, the parent of Chuck E. Cheese, is positioned similarly to Dave & Buster's but with a focus on kid-oriented food and entertainment, and it just declared bankruptcy yesterday. Investors are undoubtedly worried what a new round of shutdown orders would do to Dave & Buster's.

While Cheesecake Factory does have a to-go business to fall back on, it has been looking forward to reopening its restaurants. It reported earlier this month 25% of its restaurants were reopened, and it had already recaptured 75% of their pre-pandemic sales.

So, too, with Brinker's family of restaurants, which recently told investors 82% of its restaurants were open again, and it was seeing steady improvement in comparable sales.


Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dave & Buster's Entertainment, Inc. Stock Quote
Dave & Buster's Entertainment, Inc.
$31.03 (-1.40%) $0.44
Brinker International, Inc. Stock Quote
Brinker International, Inc.
$24.98 (-2.54%) $0.65
The Cheesecake Factory Incorporated Stock Quote
The Cheesecake Factory Incorporated
$29.28 (-2.33%) $0.70

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.