The follow-through on Tuesday’s bullishness was nil on Wednesday, with traders unable to find another reason to keep the buying heat turned up. By the time the closing bell rang, the S&P 500 was at 2,361.13, up a scant 0.11%.
The measly gain still would have been preferable to the pullbacks Skechers USA Inc (NYSE:SKX), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) and Paychex, Inc. (NASDAQ:PAYX) suffered today, though. Here’s a closer look at what went wrong for each.
Paychex, Inc. (PAYX)
Human resources service provider Paychex may have managed to top its fiscal Q3 earnings estimates, but the revenue miss spooked PAYX shareholders.
For the quarter ending in February, Paychex earned 56 cents per share on revenue of $795.8 million. Analysts were only looking for a profit of 54 cents per share of PAYX, but those same analysts were also calling for a top line of $798.4 million.
Although sales were up 6% year-over-year and operating income grew 10%, shareholders couldn’t get past the revenue miss. PAYX ended the day down 2.5%.
Dave & Buster’s Entertainment, Inc. (PLAY)
PAYX wasn’t the only name to get hit hard on Wednesday despite impressive growth. Restaurant and entertainment outfit Dave & Buster’s was also upended.
In its fourth fiscal quarter ending in January, PLAY earned 63 cents per share, well up from the 53 cents per share it earned in the same quarter a year earlier. Revenue of 270.2 million was up 15% on a year-over-year basis as well, and same-store sales edged 3.2% higher.
It just wasn’t good enough, though. Analysts had set the stage for 3.7% growth in same-store sales last quarter, and were also looking for more same-store sales growth this year. The pros were expecting comparable store revenue growth of 3.6%, but Dave & Buster’s is only projecting a 2% to 3% improvement on that front.
Despite the fact that Dave & Buster’s Entertainment did better last quarter than the vast majority of its peers, it wasn’t enough to prevent PLAY from plunging 3.4%.
Skechers USA Inc (SKX)
Last but not least, shares of shoemaker Skechers were sent lower today, to the tune of 4.7%, after Susquehanna Financial Group downgraded SKX to “Negative” on concerns that the company’s competition was getting better.
Analyst Sam Poser was particularly concerned about Adidas AG (ADR) (OTCMKTS:ADDYY), Nike Inc (NYSE:NKE) and Puma, saying “Hot brands such as Adidas & Puma are receiving much larger allocations [from retailers]… Nike is commanding its usual allotment of incremental dollars… several retailers are planning incremental dollars to fund Under Armour.” Poser went on to say, “While we continue to believe Skechers’ product suite has markedly improved, our proprietary checks indicate that initial sell-through and order-flow in the domestic wholesale business is trending short of expectations and will remain challenged. We don’t believe upside will materialize.”
The downgrade materialized despite the fact that Skechers posted outstanding Q4 numbers in February, and won a key upgrade from Cowen just last week.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.