Why Procter & Gamble Co. (PG), Qorvo Inc. (QRVO) and Whole Foods Market, Inc. (WFM) Are 3 of Today’s Worst Stocks

Advertisement

With no new catalysts to push it in either direction, the market snapped back from an early lull on Thursday to close at a breakeven… almost exactly. The S&P 500’s close at 2,108.63 today was a mere 0.06 points above Wednesday’s closing price. Other market indices were similarly stuck in neutral.

Why Procter & Gamble Co. (PG), Qorvo Inc. (QRVO) and Whole Foods Market, Inc. (WFM) Are 3 of Today's Worst StocksSome stocks like Qorvo Inc. (NASDAQ:QRVO), Whole Foods Market, Inc. (NASDAQ:WFM) and Procter & Gamble Co. (NYSE:PG), however, would have settled for neutral. These three names were among the hardest hit today for completely understandable reasons.

Qorvo (QRVO)

Poor earnings upended Qorvo on Thursday, sending QRVO shares more than 14% lower.

The semiconductor maker actually topped fiscal Q1 earnings estimates of $1.05 per share by posting a profit of $1.09 per share of QRVO. Revenue of $673.6 million also rolled in higher than expectations of $665.3 million. It’s dire outlook for the current quarter, however, was more than Qorvo shareholders could stomach.

For the second quarter of its current fiscal year, Qorvo now expects a top line of between $690 million and $710 million, versus analyst estimates of $744 million. The company’s per-share profit guidance of $1.05 to $1.15 was drastically weaker than the profit of $1.28 per share of QRVO that analysts, on average, were looking for.

Still, analysts were upbeat on QRVO, largely suggesting investors use the dip as an entry point. Mike Burton, a Brean Capital analyst, opined “We believe the September miss is a temporary issue due to China being too hot in the June quarter (and ‘choppy’ in general).”

Whole Foods Market (WFM)

Whereas Qorvo’s future was the issue, Whole Foods Market suffered from a grim present and recent past. The organic grocery store chain missed its top- and bottom-line forecasts for its recently completed quarter, sending WFM down nearly 12%.

Analysts were collectively looking for a profit of 45 cents per share of WFM, versus the actual report of 43 cents. The top line of $3.6 billion fell short of the $3.7 billion analysts were expecting from Whole Foods Market. Same-store sales growth of only 1.3% was also a letdown, and the company said to expect more of the same kind of tepid growth for the rest of the year.

The numbers were bad enough for Sterne Agee CRT analyst Charles Grom to lower his opinion on WFM from a “buy” to a “neutral.” Grom went on to explain:

“Our move is predicated not on the comp slowdown QTD, but rather a higher level of uncertainty that we have with the Whole Foods model today, including: (a) the long-term ramifications that the NYC Audit will have on Whole Foods’ pricing image; (b) the depth needed on price investments to stimulate demand; (c) the company’s long-term same-store-sales trajectory given today’s highly competitive market; & (d) the impact that the new 365 concept will have across the entire P&L and ROIC.”

Procter & Gamble (PG)

Last but not least, Procter & Gamble may have topped its earnings estimates in its fourth fiscal quarter, but revenue came up short, sending PG lower by 4%.

All told, the profit of $1.00 per share was better than the 95 cents per share of PG analysts were calling for. Revenue of $17.79 billion, though, just missed expectations of $17.98 billion.

All five of its segments saw year-over-year sales dip. Procter & Gamble cited a stronger dollar as the cause, though the market was clearly unsympathetic to the explanation.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/07/procter-gamble-co-pg-qorvo-inc-qrvo-whole-foods-market-inc-wfm-3-todays-worst-stocks/.

©2024 InvestorPlace Media, LLC