Though nowhere near as rough as Thursday’s selling, and despite solid news in terms of job growth, the stock market ended a bad week on a lackluster note. The S&P 500 lost another 1.08% to end the week at 1922.03. That translates into more than a 5% loss for the week.
It could have been worse, however… as owners of Valeant Pharmaceuticals Intl. Inc. (NYSE:VRX), Weight Watchers International, Inc. (NYSE:WTW) and Gap Inc. (NYSE:GPS) know all too well. Here’s what went wrong for each of these names today.
Gap Inc. (GPS)
While trendy apparel retailer Gap has had its fair share of problems of late, at the very least it could always rely on its Old Navy division propping the rest of the company up. Now, though, even the Old Navy unit is struggling.
The retailer chain told GPS owners the bad news this morning — December’s comparable store sales were down 5%, versus a 1% upswing in the same month of 2014. Not even Old Navy was of any help, posting a 7% decline in year-over-year revenue comparisons. It’s the second month in a row Old Navy has seen year-over-year sales fall.
While unseasonably warm weather may have played a role in the weak numbers, the demise of Old Navy’s top line suspiciously coincides with the exit of division president Stefan Larsson, who left that post in late December.
GPS shares closed 14% lower on Friday.
Valeant Pharmaceuticals Intl. Inc. (VRX)
On the one hand it’s good for consumers. On the other hand, what’s good for consumers may be bad for Valeant Pharmaceuticals shareholders.
Thursday afternoon, Valeant Pharmaceuticals’ interim CEO Howard Schiller said the company would be holding off on any major price hikes for its drugs. The move is in response to a great deal of backlash following a tweet from presidential hopeful Hillary Clinton vowing to take aim at what she called price-gouging from pharmaceutical companies. The same move, however, threatens the value of VRX shares, sending them lower to the tune of nearly 5% yesterday and nearly 7% today.
Fanning the bearish flames for VRX was the resurfacing story of another possibly-improper relationship with a specialty pharmacy. This time the pharmacy in question is Direct Success. Sales of Wellbutrin XL have been abnormally high even in the face of generic competition. Bloomberg has theorized Direct Success could be artificially keeping Wellbutrin numbers inflated.
The last thing VRX shareholders need at this point is another scandal… or even a hint of one.
Weight Watchers International, Inc. (WTW)
Last but not least, and as was largely expected, the boost that Oprah Winfrey gave Weight Watchers International shares last week — following her TV commercial touting the company’s product — has completely withered away. WTW was down 14% from last week’s highest close as of Thursday afternoon, but today’s 24% plunge put an exclamation point on the pullback.
The bulk of today’s selloff was largely caused by comments from NutriSystem Inc. (NASDAQ:NTRI) CEO Dawn Zier, who said “There has been a lot of stock market volatility, but I haven’t really seen Oprah impact our business.”
If Oprah Winfrey can’t even make a dent for Weight Watchers, what can?
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
