Within sight of new all-time highs, the bulls flinched today, reversing a two-day rally that held such great promise. The S&P 500‘s close of 2,269.0 was 0.08% lower than Wednesday’s close, though that was still above some key technical support levels. A disappointing ADP payroll growth figure for December likely contributed to the day’s weakness, suggesting Friday’s employment report from the Department of Labor could be trouble.
Macy’s Inc (M)
The struggle department store chain Macy’s has faced for several quarters now isn’t exactly a veiled secret. But, M shareholders’ worst fears were confirmed today on the heels of the company’s holiday sales report and subsequent adjustment — lower — full-year profit outlook. Same-store sales fell 2.1% over the course of November and December, forcing the retailer to lower its 2016 profit guidance from a range of $3.15 to $3.40 per share of M to a range of only $2.95 to $3.10.
The salt in the wound: Macy’s announced it would also be shuttering another 68 full-service, full-priced units by the end of the year, even though it intended to open more off-price and beauty stores.
Jim Cramer commented on the matter, “If you haven’t figured it out yet, maybe you’re never going to figure it out.”
M ended the day down a hefty 13.9%.
Constellation Brands, Inc. (STZ)
With just a superficial look at the headlined regarding its fiscal third-quarter results and updated 2017 outlook, distiller/vintner Constellation Brands shares should be decidedly bullish today. Yet, there it is … STZ was down a sizeable 7% on Thursday. The prod for the selloff in the shadow of good news is ongoing worries about its taxes in the foreseeable future.
The good news: Last quarter’s per-share profit of $1.96 was 38% stronger than the year-ago comparison, and handily topped estimates for income of $1.72 per share. Sales of $1.81 billion were up 10%, and also topped analysts’ outlooks. Constellation Brands upped its 2017 profit outlook range by a dollar per share, to something between $7.55 and $7.65.
The bad news: STZ shareholders remain concerned that Donald Trump’s proposed import tax could prove very problematic for Constellation Brands, which makes the bulk of its booze in Mexico.
Gartner Inc (IT)
Last but not least, though it’s arguably a good business-building addition with a good chance of finding a fair amount of synergy, Gartner shareholders don’t appear too pleased with the acquisition of CEB; maybe it’s the $2.6 billion price tag.
Gartner, which primarily performs research on information-technology markets, is exchanging a combination of cash and IT shares in exchange to add CEB’s exposure to new areas of market research and analysis. CEB’s growth has been slower than that boasted by Gartner, though Gartner believes it can leverage its experience to accelerate CEB’s expansion. IT investors aren’t quite as optimistic that this was money well spent, however, pushing the stock to a loss of 11% for the day.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.