Whitbread stock price plummets over 4% on declining sales

Shares of Whitbread PLC (LON: WTB) are trading around 4.5% lower in London after the Premier Inn owner said its sales declined around 80% in the last quarter. Whitbread stock price has now erased gains from the last two days.

Fundamental analysis: Troubling past quarter, optimistic outlook

Whitbread, the owner of Beefeater and Premier Inn hotel chains, said its sales declined 79.4% in March, April and May when the government introduced lockdown measures to prevent further COVID-19 outbreak. 

Almost all hotels and restaurants owned by Whitbread were closed starting from the end of May. Still, the firm’s management has witnessed a surge in demand for hotels and restaurants since they reopened. 

Whitbread was given a major boost in June when it got a £1 billion rights issue away. These funds will now be invested in purchases of land for new hotels.

Jefferies’ analysts believe that Whitbread will achieve a 75% of 2019 occupancy by December. 

Technical analysis: Stock price drops

Whitbread share price has plunged 4.5% today on the news that sales declined for the quarter ending May 31. This made stock erase gains from the last two days, when shares printed a 4-week high. 

Whitbread stock price has now moved below the ascending trend line that has kept supporting the price action. This break may cause shares to slip further lower to the next horizontal support at 2117p.

Summary

Shares of Whitbread fell 4.5% after the Premier Inn hotel owner said its revenue dropped nearly 80% in the last quarter on the closure of its hotels and restaurants amid the COVID-19 outbreak.