Several of the largest restaurant companies in the U.S. are struggling with capacity restrictions on indoor dining and attempting to lure customers with takeout in a bid to avoid financial disaster.
While the nation’s largest publicly traded restaurants face a less than 1 in 5 chance of defaulting in the next year, according to the new report by S&P Global Market Intelligence, they remain in perilous terrain.
“The odds that the largest publicly traded U.S. restaurants will default fell in recent months as states allowed businesses closed by the coronavirus pandemic to reopen,” S&P says in the new report. “But the ongoing financial hits from the virus and uncertainty over whether laid-off consumers will receive expanded unemployment benefits continue to pressure the industry as more companies enter bankruptcy.”But some are faring better than others.
Dave & Buster's recorded a net loss of $43.5 million for the quarter ended in early May. But the company has taken steps to raise money, including securing new investment financing, that have significantly improved its chances of surviving without defaulting, according to S&P.This chain, whose famous Bloomin' Onion item shares a first name with the restaurant’s parent company, faces a 13.2% chance of defaulting.
But CEO John Miller said in a July 28 statement that"we believe we are well-positioned to effectively navigate further impacts of the pandemic while preparing for eventual and future growth."Having already failed to make rent payments on time in the spring, The Cheesecake Factory has been facing financial troubles since the start of the crisis. On the other hand, experts say the company’s decision not to pay rent on time might have been a negotiating tactic with landlords.
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