Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why RadioShack Shares Dropped and Ulta Popped

Stocks finished flat today, though a small gain by the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) gave the blue chips their fourth straight record finish as the Dow closed 16,945, up just 3 points. With the market at record highs and the VIX, or volatility index, near multi-year lows, there has been little news pushing investors to buy or sell in recent days. There seems to be a sense that the market is fully valued, but every time stocks pull back, buyers have come in to keep them near record levels.

Volume was also below average again today, indicating a sense of complacency among investors. There were no major economic reports released today, though the closely watched retail sales report is due out on Thursday, which could move the market. 

Among stocks making headlines today was RadioShack  (NYSE: RSHCQ  ) , which finished down 10% after turning in another gaping loss in its quarterly earnings report. The struggling electronics retailer posted a loss of $0.97 a share, down from a $0.35 loss a year ago, and worse than estimates of a $0.52 loss. Same-store sales dropped 14% as CEO Joseph Magnacca cited industrywide weakness in consumer electronics and soft mobile sales resulting from a lack of enthusiasm for current available handsets. While Magnacca pointed to positives in the company's turnaround strategy, such as growth at its concept store and cost-cutting measures, with just $61 million in cash, liquidity concerns are beginning to mount. If sales keep slipping, RadioShack may soon go off the air.

After hours, shares of Ulta Salon  (NASDAQ: ULTA  ) were moving in the opposite direction, up 10% on a strong earnings report. The beauty-products chain saw comparable sales improve 8.7%, driving a 22.7% jump in revenue 22.5% to $713.8 million. That beat the analyst consensus of $699.7 million. Earnings also improved from $0.65 a share to $0.77, ahead of estimates at $0.74. E-commerce sales, which are included in comps, were particularly strong, growing 72% in the quarter as the company is growing through organic sales at its current stores, on the online platform, and through new stores, 21 of which opened the past quarter. Looking ahead, Ulta expects more strong growth ahead, as sales are projected to grow close to 20% in the current quarter. Management forecast a range of $706 million to $717 million, ahead of estimates at $703.2 million. EPS guidance of $0.78 to $0.83 was more modest as the company spends to convert customers to its new ULTAmate rewards program. WIth strong revenue growth streams ahead and shares trading at a discount, this could be a good time to pick up shares of the beauty salon.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (0) | Recommend This Article (1)

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: 2989905, ~/Articles/ArticleHandler.aspx, 8/31/2015 2:00:37 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...

Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

Today's Market

updated Moments ago Sponsored by:
DOW 16,555.29 -87.72 -0.53%
S&P 500 1,976.21 -12.66 -0.64%
NASD 4,804.21 -24.12 -0.50%

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

8/31/2015 1:44 PM
^DJI $16555.29 Down -87.72 -0.53%
RSHCQ $0.13 Up +0.02 +0.00%
RadioShack CAPS Rating: *
ULTA $158.28 Down -0.72 -0.45%
Ulta Salon, Cosmet… CAPS Rating: ****