What happened
Del Taco (TACO) shareholders trailed a booming market last year. Their stock gained 14% in 2020, compared to the 16% increase logged by the S&P 500, according to data provided by S&P Global Market Intelligence.
Still, investors are likely pleased with the results, given that the fast-food chain had been down by more than 60% at one point in the year.
Image source: Getty Images.
So what
Management said in late July that COVID-19 closures had a significant but short-term impact on Del Taco's stores. Sales plunged by over 20% in the four weeks that ended on April 21, but declines improved to 7% in the following month and reached a flat result by mid-June.
Executives said they were "very pleased" with these results, given the geographic focus of the brand in areas like California and Nevada, where outbreaks had been significant. Most of Del Taco's dining rooms were closed for several weeks through the early summer months.
Now what
The rebound momentum continued into the third quarter, but Del Taco struggled with a more competitive selling environment in that period, and investors' lukewarm reception to that report ended up pushing the stock's return just below the broader market.
Del Taco might shift that sentiment when it reports Q4 results, but for now, investors are approaching the stock with caution while they wait for clarity about whether its growth rate is accelerating or heading back toward negative territory.
