The Dow Drops, Plus SeaWorld and Fossil Report Washed-Out Earnings

You win some...and you lose some. Fresh after setting records like New York Rangers goalie Henrik Lundqvist in the NHL playoffs, the Dow Jones Industrial Average (DJINDICES: ^DJI  )  dropped a hefty 101 points on Wednesday as investors pulled back from their recent gains.

1. SeaWorld stock drowns in the 1st Quarter
Attendance was down in the first quarter for SeaWorld Entertainment (NYSE: SEAS  ) . The operator of places you dreamt of going to as a kid -- Busch Gardens, Water Country, and the aforementioned legend SeaWorld -- suffered a loss of $49 million in the first three months of 2014. The driver was poor attendance, even though the quarter is only 12% to 15% of business usually.
SeaWorld was privately owned by the private equity arm of Blackstone until It went public last year with an IPO. SeaWorld's CEO took off his snorkel equipment and highlighted the profit the company made in its first full year as a public company -- plus, he mentioned an interesting upcoming contract nearing completion to bring SeaWorld to the Middle East.
Has BlackFish hurt sales? You might have heard about the 2013 documentary that shows the dark side of holding killer whales in captivity, including drowning of trainers by the mighty mammals, which is not fun for anyone. Some musicians refused to perform at SeaWorld after seeing the controversial film, but the CEO said in March it "has had not impact on their business."
Well, OK, but Disney is often compared to SeaWorld, and Mickey's theme parks saw increased attendance in the first quarter, while SeaWorld's dropped 13%, which it attributed to a late Easter (that wasn't in the first quarter) and weird spring-break timing. But why didn't late Easter eggs and confused spring breakers have the same effect on Disney World? Wall Street was just as skeptical and sold the stock to a 1.9% loss Wednesday.

2. Outlook for Fossil watches breaks the stock
Things weren't looking trendy for the maker of your dad's favorite Father's Day gift -- a Fossil watch. Shares of jewelry and accessories designer Fossil Group (NASDAQ: FOSL  )  dropped 10.3% Wednesday after reporting first-quarter earnings that lacked some shine -- revenue increased only slightly from the previous year from $680.9 million to $776.5 million in the first three months of the year.

So why did investors find Fossil's numbers to be off? Because it's (ironically) all about "timing" -- during the earnings report, Fossil execs lowered their outlook for the rest of 2014. Those smooth-looking Fossil "weathered" watch faces may look all-American on your wrist, but across North America, dipping mall sales have sent overall retail sales down 2.4% for Fossil compared with 2013.

The takeaway is that while Wall Street isn't a fan of the company's U.S.-centric outlook, across the pond, foreigners are "digging" for Fossils. While the company's leather business hasn't taken off, overall sales driven by watch demand rose 14.5% in Europe from last year and jumped 23.6% in Asia. Now those are fashionable numbers, Fossil.
As originally published on

Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking and is poised to kill the hated traditional bricks-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under Wall Street's radar. To learn about about this company, click here to access our new special free report.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2958194, ~/Articles/ArticleHandler.aspx, 8/28/2015 6:22:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Market Snacks

MarketSnacks creates a single, simple, daily summary of what’s happened on Wall Street -- that you'll actually want to read.

Today's Market

updated Moments ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^DJI $16643.01 Down -11.76 -0.07%
FOSL $61.60 Up +0.46 +0.75%
Fossil CAPS Rating: ***
SEAS $17.92 Up +0.13 +0.73%
SeaWorld Entertain… CAPS Rating: *