There wasn't any news today for Dave & Buster's Entertainment (NASDAQ:PLAY), but that didn't keep shares from tanking on Monday. The stock fell 8% for the day as investors are seemingly getting nervous about the ongoing coronavirus situation.
Among restaurants, Dave & Buster's is especially ill-suited for to-go dining. As the COVID-19 pandemic has forced people to stay home more, the company's business has suffered. It's why the stock is still down around 70% year to date.
Fresh coronavirus news is shaking investors up. For example, Major League Baseball players for the Miami Marlins tested positive for COVID-19, causing the league to postpone the team's home-opening game. Also, Kentucky's governor has decided to close bars again for two weeks and limit indoor restaurant seating capacity to 25%.
These are just two examples of growing coronavirus concerns. Could we be headed for a second round of a shutdown? If so, that would be worse for Dave & Buster's than others.
Some fast-food companies thrived when diners were sheltering at home. For example, Wingstop saw its same-store sales surge 33% higher in April. Casual-dining restaurants didn't do so hot, but some were able to limp along by pivoting to to-go orders. Texas Roadhouse sales fell over 70% at the worst of the shutdown, but some stores are now generating $100,000 in weekly to-go orders as the company tries to just hang on.
For Dave & Buster's, it offers customers an in-store arcade experience. That's why it closed all of its locations when shelter-in-place guidelines were laid out. That obviously led to a steep drop in sales.
For Dave & Buster's, it's done things to ensure survival. It's cut spending, cut its dividend, and raised new funds by offering stock. It had $157 million in cash and cash equivalents at the end of its first quarter. Between this and the more than $100 million it raised, it can surely make it the rest of the year.
Even still, I can understand investors' concerns today. With stocks creeping back toward all-time highs, now is a great time to evaluate your portfolio. Assessing which companies are most likely to create shareholder value over the long term, irregardless of macroeconomic pressure, is always a good process to go through when investing in stocks.