Why AMD, Coach, and PetMed Express Tumbled Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks posted minimal gains today, with the S&P 500 rising a single point even as the Dow declined on earnings-related news. For many stocks, though, the news wasn't as good, as Advanced Micro Devices (NYSE: AMD  ) , Coach (NYSE: COH  ) , and PetMed Express (NASDAQ: PETS  ) all fell substantially today.

AMD dropped 12% after its earnings report included discouraging guidance for its current quarter. Huge sales of video game consoles with AMD chips helped power fourth-quarter revenue up 38% from the previous-year's quarter, but the sales only produced adjusted net income of $45 million. But the company said that it expects first-quarter 2014 sales to drop 16%, and gross margins will likely stay at lower levels for the foreseeable future.

Coach declined 6% after missing earnings and revenue estimates for its holiday quarter. The luxury retailer suffered particularly bad results in North America, where same-store sales fell 13.6%. Even relatively strong 11% growth in international sales excluding currency impacts wasn't enough to offset poor performance closer to home, as Coach continued to struggle against the strength of rival Michael Kors (NYSE: KORS  ) and its more successful work at making itself a lifestyle brand. Coach needs to find an answer to its lack of popularity if it wants to return to investors' good graces.

PetMed Express also fell 6% after reporting sluggish sales and unimpressive net income. Earnings per share were flat compared to the year-ago period, but the pet-products seller only managed to grow revenue by 1% despite solid increases in reorder and e-commerce sales figures. Despite efforts to cut operating expenses in order to bolster profitability, PetMed Express hasn't been able to deliver the increased traffic that investors have wanted to see. Moreover, as Amazon (NASDAQ: AMZN  ) starts to notice the profit potential from pet-related sales, PetMed Express could see more competition at the worst possible time for the company.

What's next for retailers?
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  • Report this Comment On January 22, 2014, at 10:22 PM, bluesky64 wrote:

    Dan,

    Did you hear the same call I heard?

    AMD guidance YOY 1st qrt. growth 21% from 1q 2013 $ 1.088 billion to $ 1.35 billion for 1st quarter 2014

    with break even. or slight profits.

    Dan AMD sales are seasonal do the math from the decline of 16% from the 4qr.2013 equals 1.35 billion that's up from last yr 1qr 2013 $ 1.088. Up 20 % to $ 1.35 Billion. The revenues to come in break even or slight profits that's much better than 1qt 2013. Please look at the facts closer.

  • Report this Comment On January 22, 2014, at 10:24 PM, bluesky64 wrote:

    MF put this same info out 4 times today missing the details. Seem strange not to put all the facts out.

  • Report this Comment On January 28, 2014, at 9:16 AM, PETVET1111 wrote:

    Pets is going lower.I expect 11 or even 9

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