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Benchmarks finished in the red on Thursday dragged down by retail stocks which suffered after Macy reported weaker than expected quarterly results. Meanwhile, weak earnings performance by Snap subdued investors’ confidence which ultimately had an adverse impact on the Nasdaq.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) declined 0.1% to close at 20,919.42. The S&P 500 fell 0.2% to close at 2,394.44. The tech-laden Nasdaq Composite Index declined 0.2% to close at 6,115.96. A total of around 6.7 billion shares were traded on Thursday, in line with the last 20-session average. Decliners outnumbered advancing stocks on the NYSE by a 1.58 to 1 ratio.
Macy's Shares Drop
Shares of Macy’s, Inc. (M - Free Report) tanked 17% and dragged down the consumer discretionary sector, following the release of the company’s weaker-than-expected first quarter 2017 earnings results. Macy’s succumbed to a negative earnings surprise of 31.4% in the first quarter of fiscal 2017. Total sales also fell short of the estimate for the second quarter in row. Further, the company’s top and bottom lines continued to decline year over year.
Macy’s reported first-quarter adjusted earnings of $0.24 a share that missed the Zacks Consensus Estimate of $0.35 and declined substantially from $0.40 reported in the year-ago period. The company generated revenues of $5,338 million that fell short of the Zacks Consensus Estimate of $5,469 million, and declined 7.5% year over year.
In fact in the past six months, Macy’s shares have declined roughly 29.4% compared with the Zacks categorized Retail-Regional Department Storesindustry that plunged 29.8%. Analysts pointed out that the overall industry is grappling with waning mall traffic and increased online competition. Macy’s reaffirmed its fiscal 2017 outlook, and continues to expect total sales to decline in the range of 3.2% to 4.3%. (Read More)
Meanwhile, Kohl’s Corporation (KSS - Free Report) reported first quarter 2017 results with earnings beating the Zacks Consensus Estimate. However, revenues missed the same. The company reported revenues of $3.843 billion, missing the Zacks Consensus Estimate of $3.864 billion. Also, it declined 3.2% from the prior-year quarter due to a challenging sales environment and lower comparable store sales. However, the company’s adjusted earnings of $0.39 per share surpassed the Zacks Consensus Estimate of $0.28. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lower spending on apparel and accessories and a general slowdown in consumer spending are hurting sales at department stores. Kohl's and its competitors have struggling in an intensely competitive market from online retailers. Shares of the company declined 7.8%.
Weak performances from Macy’s and Kohl’s Corporation had a negative impact on investors’ sentiment, which ultimately had an adverse impact on the broader market.
Snap Dragged Down the Nasdaq
Shares of Snap Inc (SNAP - Free Report) tanked 21.5% following the release of its first earnings report as a public company. Investors remained concerned over the company’s long-term prospects as the first-quarter 2017 results clearly depict a slowdown in user base and revenue growth rate.
For the quarter, Snap reported loss per share of $2.31, much wider than the year-ago quarter’s loss of just $0.14. The year-over-year disappointing comparison was mainly due to stock compensation expenses related to its recently concluded IPO, which inflated the overall costs and expenses.
The company posted revenues of $149.6 million, registering a whopping 286% year-over-year jump. However, on a sequential basis, revenues were down 10%, which, according to the company, may be due to seasonal impact on advertising, which comprises the bulk of its revenues.
Notably, the company added only 5 million active daily users in fourth-quarter 2016, as well as last quarter, which happens to be the lowest since third-quarter 2014. User growth holds the key in attracting advertisers, which is the primary source of revenues for Snap. A slowdown in user base growth rate may look unattractive to advertisers.
Leading Canadian telecom operator TELUS Corp. (TU - Free Report) reported impressive financial results in the first quarter of 2017, wherein both the top and bottom line outpaced the Zacks Consensus Estimate. (Read More)
Shares of Dillard's Inc. (DDS - Free Report) plunged 17.5% yesterday, following the company’s first-quarter fiscal 2017 results, wherein both top and bottom lines declined year over year. (Read More)
Delta Air Lines, Inc. (DAL - Free Report) recently announced in a regulatory filing that its board of directors has approved a new share repurchase program worth $5 billion. (Read More)
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks ""Strong Sells"" absolutely free >>.
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Stock Market News for May 12, 2017
Benchmarks finished in the red on Thursday dragged down by retail stocks which suffered after Macy reported weaker than expected quarterly results. Meanwhile, weak earnings performance by Snap subdued investors’ confidence which ultimately had an adverse impact on the Nasdaq.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) declined 0.1% to close at 20,919.42. The S&P 500 fell 0.2% to close at 2,394.44. The tech-laden Nasdaq Composite Index declined 0.2% to close at 6,115.96. A total of around 6.7 billion shares were traded on Thursday, in line with the last 20-session average. Decliners outnumbered advancing stocks on the NYSE by a 1.58 to 1 ratio.
Macy's Shares Drop
Shares of Macy’s, Inc. (M - Free Report) tanked 17% and dragged down the consumer discretionary sector, following the release of the company’s weaker-than-expected first quarter 2017 earnings results. Macy’s succumbed to a negative earnings surprise of 31.4% in the first quarter of fiscal 2017. Total sales also fell short of the estimate for the second quarter in row. Further, the company’s top and bottom lines continued to decline year over year.
Macy’s reported first-quarter adjusted earnings of $0.24 a share that missed the Zacks Consensus Estimate of $0.35 and declined substantially from $0.40 reported in the year-ago period. The company generated revenues of $5,338 million that fell short of the Zacks Consensus Estimate of $5,469 million, and declined 7.5% year over year.
In fact in the past six months, Macy’s shares have declined roughly 29.4% compared with the Zacks categorized Retail-Regional Department Storesindustry that plunged 29.8%. Analysts pointed out that the overall industry is grappling with waning mall traffic and increased online competition. Macy’s reaffirmed its fiscal 2017 outlook, and continues to expect total sales to decline in the range of 3.2% to 4.3%. (Read More)
Meanwhile, Kohl’s Corporation (KSS - Free Report) reported first quarter 2017 results with earnings beating the Zacks Consensus Estimate. However, revenues missed the same. The company reported revenues of $3.843 billion, missing the Zacks Consensus Estimate of $3.864 billion. Also, it declined 3.2% from the prior-year quarter due to a challenging sales environment and lower comparable store sales. However, the company’s adjusted earnings of $0.39 per share surpassed the Zacks Consensus Estimate of $0.28. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lower spending on apparel and accessories and a general slowdown in consumer spending are hurting sales at department stores. Kohl's and its competitors have struggling in an intensely competitive market from online retailers. Shares of the company declined 7.8%.
Weak performances from Macy’s and Kohl’s Corporation had a negative impact on investors’ sentiment, which ultimately had an adverse impact on the broader market.
Snap Dragged Down the Nasdaq
Shares of Snap Inc (SNAP - Free Report) tanked 21.5% following the release of its first earnings report as a public company. Investors remained concerned over the company’s long-term prospects as the first-quarter 2017 results clearly depict a slowdown in user base and revenue growth rate.
For the quarter, Snap reported loss per share of $2.31, much wider than the year-ago quarter’s loss of just $0.14. The year-over-year disappointing comparison was mainly due to stock compensation expenses related to its recently concluded IPO, which inflated the overall costs and expenses.
The company posted revenues of $149.6 million, registering a whopping 286% year-over-year jump. However, on a sequential basis, revenues were down 10%, which, according to the company, may be due to seasonal impact on advertising, which comprises the bulk of its revenues.
Notably, the company added only 5 million active daily users in fourth-quarter 2016, as well as last quarter, which happens to be the lowest since third-quarter 2014. User growth holds the key in attracting advertisers, which is the primary source of revenues for Snap. A slowdown in user base growth rate may look unattractive to advertisers.
Stocks that made Headlines
TELUS Surpasses Earnings and Revenue Estimates in Q1
Leading Canadian telecom operator TELUS Corp. (TU - Free Report) reported impressive financial results in the first quarter of 2017, wherein both the top and bottom line outpaced the Zacks Consensus Estimate. (Read More)
Why Dillard's Crashed 17.5% Despite Q1 Earnings Beat
Shares of Dillard's Inc. (DDS - Free Report) plunged 17.5% yesterday, following the company’s first-quarter fiscal 2017 results, wherein both top and bottom lines declined year over year. (Read More)
Delta Rewards Investors with Dividend Hike & New Buyback
Delta Air Lines, Inc. (DAL - Free Report) recently announced in a regulatory filing that its board of directors has approved a new share repurchase program worth $5 billion. (Read More)
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks ""Strong Sells"" absolutely free >>.