Stock Market Crash Warning: Don’t Get Caught Holding These 3 Restaurant Stocks. | Markets

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The restaurant industry is difficult. Competition is fierce. Consumers are picky. Workers are transitory. And profit margins can be razor thin. The National Restaurant Association estimates that only 20% of restaurants are successful. About 60% of all restaurants fail in their first year of operation, and 80% fail within five years of opening. Those are some depressing statistics and they help to explain why many restaurant stocks chronically underperform the broader market. Currently, there’s quite a long list of restaurant stocks to avoid.

A lot of restaurant stocks have missed out on the rally of the past 18 months. While tech stocks zoomed ahead, many restaurant companies have seen their share price stuck in the mud, unable to gain any traction or forward momentum. Higher prices prompted by inflation have forced many consumers to eat at home, hurting the financial results and stock performance of restaurant chains and companies. Slowing economic growth at home in the U.S. and abroad has further complicated matters.

As you update your portfolio to take into account current trends, don’t get caught holding these three restaurant stocks to avoid.

Darden Restaurants (DRI)

Source: Shutterstock

The stock of Darden Restaurants (NYSE:DRI) is down nearly 10% on the year as the company continues to report mixed financial results and a decline in same-store…


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