Why Groupon, Zulily, and Whole Foods Market Tumbled Today

The broader market posted reasonable gains Wednesday, but there was plenty of blood on Wall Street as well. Find out why these stocks plunged.

May 7, 2014 at 8:35PM

The stock market went through a topsy-turvy day Wednesday, as optimism about a potential resolution to the Ukrainian situation trumped nervousness over how the Federal Reserve might address certain risks that Chairwoman Janet Yellen brought up in Congressional testimony today. Even though the broader major-market indexes closed higher, Groupon (NASDAQ:GRPN), Zulily (NASDAQ:ZU), and Whole Foods Market (NASDAQ:WFM) plunged today.


Source: Groupon.

Groupon plummeted almost 21% even after the daily deals-turned-online retail company issued reasonably strong quarterly results. Groupon posted a narrower adjusted loss than investors had expected, and revenue climbed 26%. But investors still seem unconvinced that the company's long-term online retail strategy will prove successful, especially as it ventures into territory in which far larger players already hold dominant positions. Until Groupon shows much better results than it gave investors today, it'll be hard for the company to convince shareholders that its turnaround is for real.

The nearly 30% collapse in Zulily shares came amid rising losses and operational concerns about the online retailer's just-in-time approach to fulfilling orders. Sales at Zulily soared by 87%, which was better even than the ambitious growth expectations that investors already had for the stock. Even though Zulily raised its full-year sales guidance, earnings didn't make the grade, as a rush of orders as Easter approached forced the company to incur additional costs and suffer longer shipping times. The challenge that Zulily will face is reassuring customers that any negative experiences they might have had won't be repeated, as online retail is so fickle that Zulily can't count on getting many second chances.


Whole Foods Market suffered a 19% loss as the premium grocer's quarterly results fell short of expectations. Same-store sales growth of 4.5%, overall revenue gains of nearly 10%, and roughly flat net income year-over-year weren't up to par, and Whole Foods also cut its guidance for revenue growth by one-half to one percentage point and for earnings per share by $0.06 to $0.09 per share. Many investors are nervous that Whole Foods will dilute its margins by offering its high-quality food at lower prices in order to compete with other grocers, which increasingly are jumping onto the organic and natural-foods bandwagon. Yet in the long run, Whole Foods still expects to expand its network of stores and find new ways to use the loyalty of its customer base to bring sustainable growth.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click here to uncover the name of this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!

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

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of 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.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers