Stupidity is contagious -- even respectable companies can catch it. As we do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. RadioShack is no love shack, baby
Things continue to get uglier for RadioShack (NYSE: RSH ) . The small-box retailer posted a huge deficit during the holiday quarter, dragged down by a disastrous 19% plunge in same-store sales. Folks just aren't shopping at RadioShack anymore, and the chain is going to make it harder to find one by closing as many as 1,100 locations.
Closing underperforming stores isn't a bad idea, but the chain is also bragging about how its remodeled concept stores are experiencing sales growth. One would think that it would invest in repositioning all of its stores if a fix were just a makeover away.
RadioShack's stores may be small, but its problems are big.
2. Guac and roll
Chipotle Mexican Grill (NYSE: CMG ) made headlines for all of the wrong reasons as an interesting nugget in its most recent quarterly filing came to light.
The fast-growing burrito roller warned that several factors "including any changes associated with global climate change" could create food sourcing issues. Chipotle went on to single out its popular guacamole as an item that could be temporarily suspended if costs get out of hand.
Really, Chipotle? Companies place insane scenarios in SEC filings to cover themselves, but this seems to either be a political shot by Chipotle or a warning that its "food with integrity" mantra could backfire.
Chipotle should know better than to drum up fear over something that is highly unlikely.
3. The "easy" button just got hard
It's not just RadioShack closing hundreds of stores. Staples (NASDAQ: SPLS ) shares tumbled on Thursday after it revealed plans to nix as many as 225 of its office supply superstores.
This should've been a good time for Staples. Its two nearest competitors just merged late last year -- a move that some believed would ease cutthroat pricing. Staples argues that half of its sales are being generated online, but chasing that channel is risky, because Staples can't match the low overhead of the pure online retailers.
4. Bean counters get the last laugh
Elon Musk isn't always coated in Teflon, apparently. It was silly enough that shares of SolarCity (NASDAQ: SCTY ) didn't move lower last week after the company delayed its quarterly report by a week. In fact, the stock soared 12% over the week.
However, when Monday rolled around and SolarCity revealed that it will have to delay its report yet again -- there are accounting questions regarding acquisitions and overhead allocation -- investors had had enough.
SolarCity remains a market darling, but the stock has fallen for five straight trading days through Thursday's close.
5. Home is where the hard is
We may be in a housing boom, but not every homebuilder is rolling these days. Hovnanian Enterprises (NYSE: HOV ) posted disappointing quarterly results on Wednesday.
Revenue inched a mere 1.6% higher, and if that seems odd given that real estate prices have moved a lot higher over the past year it's simply a matter of Hovnanian completing fewer homes. It delivered 1,138 homes during the holiday quarter, compared to 1,188 homes a year earlier.
The backlog of home orders is improving, and that's clearly a good sign. However, it's hard to get encouraged with Hovnanian posting a much larger quarterly deficit than analysts were expecting.
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