Stocks ended the day and the week on a surprising high note, but without any fanfare. Thanks to Friday’s 0.52% gain and close of 2102.06, the S&P 500 gained nearly 1.7% for the week.
Not every stock ended the week as bullishly, however. Rite Aid Corporation (NYSE:RAD), Dover Corp. (NYSE:DOV) and Gap Inc. (NYSE:GPS) all dipped rather deep into the red ink on Friday. Here’s why.
Gap (GPS)
The good news: Overall sales at retailer Gap were up last month. The bad news is: Same-store sales for the namesake Gap division were lower in March. Choosing to see the glass as half-empty, traders sent GPS stock down nearly 4% on Friday.
On a company-wide basis, Gap drove a 2% uptick in same-store sales last month, mostly fueled by a strong showing from its Old Navy brand. Sales at Gap brand stores fell 7%, while same-store sales for its Banana Republic were off 3% on a year-over-year basis.
Though the overall numbers were better than anticipate, Janney Montgomery Scott analyst Adrianne Yih explained the concern best by saying:
“We believe ON’s ability to ‘subsidize’ weak results at Gap will lessen in 2015. Product still an issue at Gap brand; based on their nine-month lead time, product issues are likely to last through spring, with potential latter 2H15 improvement.”
Rite Aid (RAD)
Though the bad news came out Wednesday morning, having had another night to think about it, Rite Aid investors decided they still weren’t done dumping their RAD stakes.
What happened: On Wednesday, after the close, drug store chain posted better-than-expected earnings. The profit of twelve cents per share of RAD beat estimates of only seven cents per share, and blew away the year-ago bottom line of five cents. Revenue of $6.8 billion was in line with estimates, better than the $6.6 billion in sales Rite Aid achieved in the same quarter a year earlier.
What’s still spooking RAD investors is the full-year outlook. The company now foresees a per-share profit of between 19 and 27 cents (which includes a tax expense of between 13 and 18 cents), versus a consensus estimate of 43 cents per share. Rite Aid also offered revenue guidance of between $26.9 billion and $27.4 billion, versus a top line of $26.5 billion for last fiscal year.
RAD closed at $8.35 on Friday, down 1.7%.
Dover (DOV)
Machinery and component maker Dover isn’t going to do as well this year as initially thought, according to a notice posted by the company on Thursday. Due partially to an adverse currency exchange scenario, the company now expects earnings to roll in between $4.20 and $4.40 per share of DOV, on revenue that’s 4% to 6% weaker than 2014’s top line.
Prior earnings guidance from Dover had suggested a bottom line of $4.70 to $4.95 per share of DOV this year, and analysts had been collectively expecting a profit of $4.68 per share.
Shares of DOV were off 3% today.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
