Mother nature has been on a tear in last few weeks. With both Hurricane Irma and Hurricane Harvey making landfall in the U.S. this summer, thousands of restaurants were forced to close their doors.
Several establishments in Hurricane Irma and Harvey’s path have been damaged and many of the restaurants fortunate enough to be able to quickly recover offered a lending hand to the local communities.
13,000 stores of publicly-traded restaurant chains in the U.S were in exposed hurricane areas. This is 15% of total units, according the Credit Suisse’s Jason West.
This means that these chains, many of which are in the quick-serve and casual dining segment, are bound to see a summer slump.
Here are some of the chains that had to close the most stores—
The beloved coffee chain Starbucks had a large percentage of units in the Houston-area and Florida and was forced to close 700 stores.
Fiesta Restaurant Group with the popular restaurants Pollo Tropical and Taco Cabana had 70% of their stores exposed to areas impacted by either Hurricane Irma and Harvey.
Darden Restaurant Group, which operates Olive Garden and Longhorn Steakhouse, had 15% of units in hurricane zones.
Other casual dining chains like BJ’s Restaurants saw 13% and The Cheesecake Factory saw 10%.
“More store closure days equals more impact,” said Nicole Miller Regan, Piper analyst to “Yahoo” Finance. “Flooding tends to lead to that, whereas a wind storm potentially has relatively less impact if doors reopen more quickly.”
With the massive flooding from Harvey, it took a while for restaurants to recuperate. Although there was less rainfall from Irma, the storm surge still caused flooding in several areas close to Florida’s coast.
Evidently, this will have a significant impact on the restaurant brands in the stock market. Even when the restaurants do reopen, it takes a while after natural disasters for guests to return to their normal dining out habits.
“We remain cautious and believe stocks will be remain under pressure in the near term until we gain greater visibility around the impact of Hurricane Irma,” according to Canaccord’s Lynne Collier.