Friday was a solid day on Wall Street, with most major market benchmarks finishing higher on the day. After a week of uncertainty about what will happen between the U.S. and China, market participants focused on the possibility of avoiding a full-blown trade war and returning to a more economically cooperative and prosperous relationship with key trading partners.
Yet even with the broader market seeing good gains, some companies had bad news that sent their shares lower; Foot Locker (NYSE:FL), Lions Gate Entertainment (NYSE:LGF-A)(NYSE:LGF-B), and The Buckle (NYSE:BKE) were among the worst performers. Here’s why they did so poorly.
Foot Locker hits a hurdle
Shares of Foot Locker dropped 16% after the retailer of athletic footwear and apparel reported poor first-quarter results. Foot Locker said that revenue grew by less than 3% during the quarter compared to the year-earlier period, with a 4.6% rise in comparable-store sales offset by a modest decline in total store count. Net income also inched higher by 4% over the same time frame, but investors had hoped for more growth, even in the tough competitive environment the industry faces right now. To satisfy longer-term expectations, Foot Locker will have to find ways to step up its game.
Lions Gate deals with declines
Lions Gate Entertainment saw its shares fall almost 7% following the release of its fiscal fourth-quarter financial report. The entertainment company said that revenue fell more than 12% from year-earlier levels, while adjusted net income plunged by more than half. Fiscal 2019 overall was generally weak for Lions Gate, which saw 20% declines in revenue from its motion picture segment and an 11% drop in television-related revenue. Increasingly, Lions Gate has relied on its media networks segment for top-line growth, but the bigger question is whether the company will end up making a deal with CBS (NYSE:CBS) to sell its Starz network.
Finally, shares of Buckle lost nearly 6%. The retailer’s first-quarter financial results included some disappointing numbers, including a 1.7% drop in net sales for the period and a 1.3% decline in comparable-store sales. Net income was also lower by double-digit percentages. The news was particularly disappointing in light of much more favorable results from the previous quarter, which had seemed to indicate that Buckle was moving in the right direction toward a long-term turnaround. Yet Buckle’s retail niche is fairly crowded, and that leaves the company facing competition that it could struggle to overcome well into the future.