Stocks rallied for a second day in a row on Friday, with the second day being even better than the first, as the bulls try to put Wednesday’s implosion in the rear-view mirror. The S&P 500 ended the day and the week at 2,381.73, up 0.68% from Thursday’s close, though still on the fence from a technical trading perspective.
The last trading day of the week wasn’t a winner for all names, however. Campbell Soup Company (NYSE:CPB), Halozyme Therapeutics, Inc. (NASDAQ:HALO) and Foot Locker, Inc. (NYSE:FL) investors will all be starting the weekend in a bit of a sour mood following Friday’s losses.
Foot Locker, Inc. (FL)
Try as the company might, athletic apparel retailer (and sneaker specialist) Foot Locker couldn’t soften the blow suffered by FL shareholders today. Its first-quarter results just raised too many red flags.
For the quarter ending in April, Foot Locker earned $1.36 per share last quarter, on revenue of $2.0 billion. Problem: Analysts were expecting revenue of $2.015 billion, and a profit of $1.38 per share of FL stock. Same-store sales growth of 0.5% also came up short of estimates.
The company partially blamed the Internal Revenue Service, explaining, “The slow start we experienced in February, which we believe was largely due to the delay in income-tax refunds, was unfortunately not fully offset by much stronger sales in March and April,” referencing a law put into place in 2015 that encouraged some taxpayers to delay filing their returns.
Shareholders weren’t sympathetic though, sending FL to a loss of 16.6% for the session. The market is wondering why other retailers didn’t face the same tax-return headwind.
Halozyme Therapeutics, Inc. (HALO)
Investors had to know it was coming sooner or later, but there’s just something about seeing it in print that’s unsettling.
Thursday afternoon, biotech outfit Halozyme Therapeutics — which primarily develops cancer drugs — announced it would be making a secondary offering. All told, the company intends to raise $100 million by issuing roughly 7.1 million new shares of HALO. That’s about 5.4% of the 130 million or so shares outstanding right now. While the funds will predominantly be used to continue the development of PEGPH20 oncology drugs, the prospect of dilution led the stock 8.8% lower on Friday.
Campbell Soup Company (CPB)
Last but not least, though the 2.0% pullback shares of Campbell Soup Company made today wasn’t a devastating move, it was the day’s biggest loss among large cap stocks … most of which ended the day with a solid gain.
Earnings, not surprisingly, were the culprit. For its third fiscal quarter ending in April, CPB earned 59 cents per share versus estimates for a profit of 64 cents per share. Sales of $1.85 billion also missed estimates of $1.87 billion.
It wasn’t so much the miss that spooked investors, however. It was the 4.8% year-over-year drop in profits and the lowered full-year revenue guidance that inspired the mild selloff. Its C-Fresh unit, soups and V8 vegetable juice products were the weakest links.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.