Viewpoint — March 2009
I’m Not Going to Lie…..Things Are Not Pretty Out There
Written by Bob Gershberg, Managing Partner Dick Wray Executive Search
Moody's, which has long been criticized for sleeping through the credit bubble and, by some accounts, causing it in the first place, this morning came out with an attempt at absolution. In a quarterly publication called the "Bottom Rung", the rating agency lists 283 companies which it believes are the most likely to default. As you might suspect, the list is flush with restaurant and retail companies. About 45 percent of companies on the list will default on debt in the next year, Moody's says, which could include anything from filing for bankruptcy to missing debt payments.
Shares of the top 26 restaurant companies have seen their stocks lose an average of 49.3% of their value since their 52 week highs. That drop is more severe than the 46.5% decline of the Standard & Poor’s 500 from its 52 week high. A few restaurant groups, Ruth’s Hospitality, DineEquity and Ruby Tuesday are approaching a 90% drop.
Shares of Restaurant Stocks | ||||
Company |
Symbol |
Stock price |
Change from |
Year-to-date |
Wendy's/Arby's |
WEN |
$4.86 |
-16.9% |
-1.6% |
McDonald's |
MCD |
$54.57 |
-18.6% |
-12.3% |
BJ's Restaurants |
BJRI |
$11.99 |
-24.9% |
11.3% |
McCormick & Co. |
MKC |
$30.15 |
-28.3% |
-5.4% |
Panera Bread |
PNRA |
$46.28 |
-28.8% |
-11.4% |
Texas Roadhouse |
TXRH |
$8.45 |
-30.2% |
9.0% |
Buffalo Wild Wings |
BWLD |
$31.24 |
-30.5% |
21.8% |
Papa John's International |
PZZA |
$21.19 |
-30.9% |
15.0% |
Jack in the Box |
JACK |
$20.48 |
-32.5% |
-7.3% |
Steak n Shake |
SNS |
$6.31 |
-33.2% |
6.1% |
CEC Entertainment |
CEC |
$25.33 |
-36.0% |
4.5% |
California Pizza Kitchen |
CPKI |
$10.66 |
-37.0% |
-0.6% |
PF Chang's China Bistro |
PFCB |
$19.30 |
-41.5% |
-7.8% |
Starbucks |
SBUX |
$9.58 |
-50.4% |
1.3% |
CKE Restaurants |
CKR |
$7.06 |
-51.1% |
-18.7% |
Chipotle Mexican Grill |
CMG |
$55.50 |
-54.2% |
-10.5% |
Brinker International |
EAT |
$10.89 |
-54.4% |
3.3% |
Sonic |
SONC |
$9.22 |
-60.5% |
-24.2% |
The Cheesecake Factory |
CAKE |
$8.09 |
-65.2% |
-19.9% |
Red Robin Gourmet Burgers |
RRGB |
$14.67 |
-66.3% |
-12.8% |
Landry's Restaurants |
LNY |
$5.70 |
-72.6% |
-50.9% |
O'Charley's |
CHUX |
$2.99 |
-76.9% |
49.5% |
McCormick & Schmick's Seafood Restaurants |
MSSR |
$2.93 |
-78.7% |
-27.1% |
Ruby Tuesday |
RT |
$1.26 |
-86.4% |
-19.2% |
Ruth's Hospitality Group |
RUTH |
$1.03 |
-87.8% |
-25.4% |
DineEquity |
DIN |
$6.16 |
-88.5% |
-46.7% |
Source: Standard & Poor's Capital IQ |
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This climate will truly test our mettle. Substantive measures, brilliant innovation and laser focused execution will be the path to surviving the downturn and thriving in the subsequent upswing. Let’s remain cognizant of what brought us to success as these are the building blocks that will get us there yet again. Be true to your brand. Lead with absolute integrity and uphold the company’s core values. Encourage unique ideas and creative thought. Build bonds of trust. And by all means drive execution.
Bob Gershberg |Managing Partner|
bob.gershberg@dickwray.com
(888) 875-9993 ext 102
Matching the dreams, energy and experience of super-star candidates with the vision of our business partners.
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