Nothing was up on Thursday except bonds, and even that was a “just barely” exception to the day’s norm, as a December rate hike is increasingly looking like a foregone conclusion. By the time the closing bell rang, the S&P 500 had given up 1.4% of its value, finishing the day at 2,045.97.
It could have been worse though, and for owners of Flowers Foods, Inc. (NYSE:FLO), Fitbit Inc (NYSE:FIT) and Advance Auto Parts, Inc. (NYSE:AAP), it was worse, with each losing a great deal of ground; two of them fell by double digits. Here’s why.
Advance Auto Parts, Inc. (AAP)
Advance Auto Parts suffered a breakdown on Thursday following disappointing third-quarter results and the surprise exit of its top executive.
Last quarter, the auto parts retailer earned $1.95 per share on revenue of $2.3 billion. Analysts, however, were collectively calling for earnings of $2.09 per share of AAP stock and sales of $2.33 billion. A strong U.S. dollar and lingering expenses related to the integration of General Parts International after its early 2014 acquisition by Advance Auto Parts were cited as key reasons for the shortcoming.
Sales were up only 0.3%, while earnings grew only 3.2%. Same-store sales advanced a tepid 0.5%.
Though not necessarily related to lackluster third-quarter results for AAP, CEO Darren Jackson announced he would be retiring on Jan 2 and would, for the time being, be replaced by President George Sherman.
AAP finished the day down 15%.
Flowers Foods, Inc. (FLO)
AAP wasn’t the only stock to get hit hard by disappointing earnings news on Thursday. Flowers Foods also took a sizable hit after its third-quarter report, sending FLO shares lower to the tune of 12%.
Last quarter, Flowers Foods earned 23 cents per share on sales of $885 million. Earnings were flat with year-ago levels, and the top line grew 4.8% versus Q3-2014’s top line of $845 million. The pros, however, were expecting a bottom line of 24 cents per share.
The real torture for Flowers Foods, though, was spurred by the company’s full-year earnings outlook. Now the company is projecting a profit of only between 96 cents and 98 cents per share of FLO, versus prior guidance of between 96 cents and $1.01 per share.
Fitbit Inc (FIT)
Last but not least, Fitbit had to know it was coming sooner or later. Now it’s here.
Xiaomi — the same company named as serious threat to GoPro Inc. (NASDAQ:GPRO) earlier in the year when it unveiled a low-cost action camera — recently unveiled the Mi Band Pulse, which monitors the wearer’s pulse … a first for the low-end wearable market. With a price tag of only $16, the Mi Band Pulse could pose real problems for Fitbit.
Thursday’s 8% plunge from FIT followed Tuesday’s and Wednesday’s collective 8% stumble spurred by news of a secondary offering that would inject another 21 million shares into the float.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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