Disney Boasts Record Earnings; Zulily Plunges 30% Despite Growth

Shares of Whole Foods Market, Inc. also freefall after earnings, and the Dow rebounds.

May 7, 2014 at 6:18PM
Longview

Stocks rebounded from yesterday's steep sell-off on Wednesday, recovering nearly all of Tuesday's losses. Federal Reserve Chairwoman Janet Yellen waxed optimistic about the economy in front of Congress today, assuring lawmakers that interest rates would remain low into the near future. Eight in 10 sectors finished safely in the black by the market's closing bell, with consumer services and tech ending as the lone decliners. With 22 of its 30 components logging gains, the Dow Jones Industrial Average (DJINDICES:^DJI) took Yellen's soothing words to heart, jumping 117 points, or 0.7%, to end at 16,518. 

While there's nothing like a good macroeconomic report card from the schoolmaster of financial markets (a.k.a. the Federal Reserve), the three stocks under today's microscope were each driven by fresh quarterly results. Walt Disney (NYSE:DIS) shares, for instance, finished near the bottom of the Dow, shedding 0.9%, despite the fact that Wall Street initially cheered its numbers. The entertainment behemoth posted record profits in the first quarter, handily beating consensus estimates with earnings per share of $1.11 where the market expected EPS just under $1. CEO Bob Iger spoke this afternoon about American consumers, saying that there's "not much visibility, but not much fear," in terms of their current and future spending habits. 

For the average Zulily (NASDAQ:ZU) investor, today was rife with fear, as shares cratered a staggering 29.7% after a disappointing earnings report. Shares of the female-facing flash-sales retail site have been incredibly volatile since the day of its IPO last November, when Zulily's stock -- it went public at $22 a share -- surged 87% by day's end to finish above $37. Today's skid sent shares back below that mark, as investors worried that Zulily may be a victim of its own success. Revenue in the first quarter rocketed 87% higher, but the young company struggled to fill orders in a timely and cost-effective manner, and the business wasn't even able to break even. 

Whole Foods Market

Source: Whole Foods website

While Zulily is still in the process of defining itself, the fear from Whole Foods Market (NASDAQ:WFM) investors is that the high-end organic grocer has already defined itself. Both sales and EPS numbers came in under expectations, which sent the stock plunging 18.8% on Wednesday. In what had typically been known as a notoriously low-margin, unexciting business, Whole Foods took the grocery game to a new level as it capitalized on and participated in an organic food revolution. The question is whether high margins are here to stay as competitors muscle their way into the market, undercutting Whole Foods' prices. While today's slump gives long-term investors a more attractive entry point, personally I find its stores far too pricey to frequent. With even old-fashioned grocers now highlighting their organic options, I don't see my portfolio craving Whole Foods anytime soon, either.

6 stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors.

John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends and owns shares of Walt Disney and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers