Consumer discretionary stocks gained 1.3% on Wednesday, helping to lead U.S. equities to a broad up-day. The S&P 500 Index gained 0.6%, the Dow Jones Industrial Average surged 0.3% and the Nasdaq Composite gained 0.9%.
As we head into Thursday, the spotlight has shifted to retailers, including Kohl’s Corporation (NYSE:KSS) and Sears Holdings Corp (NASDAQ:SHLD), as well as biotech firm Halozyme Therapeutics, Inc. (NASDAQ:HALO).
Here’s what investors should know as the trading day unfurls:
Kohl’s Corporation (KSS)
KSS was off significantly Thursday, along with other retailers, as it reported lackluster holiday sales results and lowered its guidance.
Kohl’s slashed its adjusted earnings forecast from a range of $3.80 to $4 per share to a range of $3.60 to $3.65 per share. That came in the wake of a 2.1% decline in comparable-store sales for the combined November-December 2016 period. Revenues declined 2.7% over the same time period.
Said CEO Kevin Mansell:
“Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December.”
Kohl’s did perform well in a few categories, including men’s, home and footwear.
KSS shares were violently sold off as a result, down 14% in Thursday’s premarket trade. If the move extends into the open, it will knock shares well below the company’s 50-day moving average — a level that has provided support to Kohl’s stock for almost a year now.
Kohl’s wasn’t the only retailer off big on Thursday, either. Macy’s Inc (NYSE:M) was clobbered on a similarly ugly holiday sales report.
Halozyme Therapeutics, Inc. (HALO)
HALO shares gained by double digits in Thursday’s premarket after the company reported top-line results from a trial of its PEGPH20 drug.
Halozyme was testing PEGPH20 in combination with Abraxane and gemcitabine in stage IV pancreas cancer patients. Results from a combined analysis of Stages 1 and 2, as well as just Stage 2, of its HALO 202 study, showed statistically significant increases in progression-free survival among those with high levels of hyaluronan for those being treated with all three drugs, rather than just Abraxane and gemcitabine alone.
Dr. Sunil R. Hingorani, the trial’s principal investigator, said, “The Study 202 data confirm for the first time in a randomized Phase 2 trial using the current standard of care that a biopsy-based biomarker for hyaluronan content can potentially identify patients who will have a meaningfully greater response when PEGPH20 is added to their treatment. The analysis suggests statistically significant and clinically important progress in this very difficult to treat cancer. The median PFS is a notable increase over the current standard of care and supports ongoing exploration in the current Phase 3 study.”
Halozyme is targeting a fairly large market, with pancreas cancer ranking as the No. 3 cause of cancer-related death in the U.S.
HALO shares were up 15% in Thursday’s premarket action.
Sears Holdings Inc (SHLD)
SHLD shares were up solidly early Thursday amid news that the struggling retailer has sold off yet another piece of itself — this time, the Craftsman tool brand.
Stanley Black & Decker, Inc. (NYSE:SWK) will buy the tools brand for $900 million in segments — $525 million up front, $250 million in 2020, then annual payments of between 2.5% and 3.5% on sales of Craftsman products through year 15.
Sears has been in full cash-raise mode for some time now, closing and unloading some stores, and also seeking to several brands, including Craftsman, Diehard and Kenmore. That’s largely to help shore up a balance sheet that features just $260 million in cash versus $4.3 billion in total debt.
Still, in the very short year, Sears is one of the best-performing stocks thanks to its cost-cutting moves. SHLD stock was up 11% to start the year, and news of the Craftsman asset sale has shares up another 11% in premarket trading.
