Wall Street had a major celebration on Friday, as the S&P 500 finished at an all-time high for the first time in roughly seven months. Investors generally pointed to Federal Reserve Chairman Jerome Powell's comments that suggested that a gradual pace of future interest rate increases was the most likely scenario for the U.S. credit markets. The prospects for predictable monetary policy moves was a positive for the market overall, but there were still some companies that dealt with specific bad news that hurt their individual stock prices. Foot Locker (NYSE: FL), Hibbett Sports (NASDAQ: HIBB), and Grupo Supervielle (NYSE: SUPV) were among the worst performers on the day. Here's why they did so poorly.
Foot Locker takes a hit
Shares of Foot Locker finished lower by 9% after the sports footwear retailer reported its second-quarter financial results. The company said that comparable-store sales rose by only 0.5%, with store openings and foreign exchange impacts helping to produce a 5% rise in overall revenue. Investors generally downplayed the fact that net income soared more than 70% from the year-ago quarter, instead seemingly focusing on their fears that Foot Locker might end up getting squeezed out as major manufacturers of athletic apparel and footwear start to emphasize their own direct-to-consumer e-commerce channels. Foot Locker executives remain optimistic, but this holiday season should provide a good data point to see what impact manufacturers' moves could have on the retailer.
Image source: Foot Locker.
Hibbett gets hammered
Hibbett Sports stock plunged 30% in the wake of the company's poor second-quarter financial performance. The sporting goods retailer disappointed investors by posting a modest loss for the quarter, despite comparable sales rising by 4.1% and overall revenue picking up 12% from year-ago levels on e-commerce strength. CEO Jeff Rosenthal blamed Hibbett's licensed offerings, equipment, and accessories businesses for its poor showing, but said that encouraging results in branded apparel and footwear could provide upward momentum for the sporting goods retailer. Yet with the company projecting that full-year comparable-store sales could ended up falling as much as 1% from last year, it's hard for Hibbett shareholders to be completely confident about the future.
Cry for me, Argentina
Finally, shares of Grupo Supervielle lost a third of their value. The financial services company, which primarily serves the Argentina market, suffered an 11% drop in its comprehensive income figure compared to the year-ago quarter, with net income plunging by nearly half over the same period. Extreme volatility in local interest rates in Argentina weighed on Supervielle's profitability in both its banking business and its consumer finance portfolio, and trading losses resulting from the devaluation of the Argentine peso also hurt the company's bottom line. With financial problems in Argentina showing no signs of letting up, investors can expect continued pressure for Grupo Supervielle for the foreseeable future.
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