Tuesday was a calm day on Wall Street, with several major benchmarks posting modest gains while others stayed closer to the unchanged mark. Market participants generally seemed ready to take a pause in trends over the past several days, as crude oil prices bounced back from their recent drop to climb above $65 per barrel while interest rates eased slightly lower. Yet despite a resilient market that largely avoided most downward pressure, some individual stocks weren't as lucky. Carnival (NYSE: CCL) (NYSE: CUK), Tarena International (NASDAQ: TEDU), and Genesco (NYSE: GCO) were among the worst performers on the day. Here's why they did so poorly.
Carnival gets some downbeat reviews
Carnival's share classes lost 4% to 5.5% after analysts at Morgan Stanley issued a pessimistic analysis about the state of the cruise industry. Morgan Stanley believes that a combination of higher costs for fuel, the impending hurricane season in the Caribbean and Atlantic regions, and the potential for too many ships seeking to transport too few cruise customers all weigh against industry players, and they cut their estimates for earnings from Carnival. A 10% cut in the analyst company's price target for Carnival to $63 per share was actually more benign than how Morgan handled a few of Carnival's peers, but investors seemed equally nervous about the prospects for the industry overall despite favorable predictions from company officials earlier this year.
Image source: Carnival.
Tarena gives investors a learning experience
Tarena International stock plunged 22% after the company released its first-quarter financial results. The Chinese provider of professional educational services said that sales were higher by 22% from year-ago levels, but Tarena's losses widened substantially over the same period. Tarena has seen a dramatic uptick in interest in its programs, with total student enrollment up 10% year over year and with enrollment in its kid-oriented programs nearly quadrupling over the past 12 months. Foreign educational stocks have given investors a roller-coaster ride in recent years, and Tarena's decline is just the latest in a series of challenges that the Chinese company has faced.
Genesco makes a misstep
Finally, shares of Genesco fell 9%. The footwear retailer reported a 1% decline in comparable sales in its fiscal first-quarter results, as well as a reversal of fortune that sent the company to a loss for the quarter. CEO Robert Dennis remained upbeat about Genesco's prospects, noting that warmer weather in the current quarter has boosted demand for footwear in all of its divisions. Despite nervousness about the prospects for its Schuh and Lids Sports units, recent strength in its Journeys and Johnston & Murphy groups could give Genesco a road map for success for the rest of the year. Also, with direct-to-consumer comps up 10%, Genesco's omnichannel efforts appear to be gaining at least some positive momentum.
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