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What Happened in the Stock Market Today

By Demitri Kalogeropoulos – Nov 10, 2016 at 7:12PM

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Shack Shack and Kohl's stood out with big price jumps as indexes rose on Thursday.

Image source: Getty Images.

Stocks rose on Thursday, with the Dow Jones Industrial Average (^DJI 0.60%) gaining over 1% to close at a new record high as the broader S&P 500 (^GSPC 0.17%) index ticked up slightly. 

Today's stock market


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Data source: Yahoo! Finance.

Banks were the market's best performers, with the Financial Sector Select SPDR Fund (XLF 1.39%) adding to yesterday's 4% post-election jump with a 3% rise on Thursday. World markets again went in the opposite direction, pushing the Emerging Market Index Fund (EEM -0.54%) down by another 3%.

As for individual stocks, Shack Shack (SHAK 2.02%) and Kohl's (KSS 0.98%) both enjoyed significant price jumps following their quarterly earnings report announcements. 

Shake Shack's expanding store base

Burger joint Shake Shack rose 12% after posting 40% higher third-quarter revenue that also significantly outpaced consensus estimates. Nearly all of that increase came from an expanding store base, though. And in fact, the chain's 2.9% comparable-store sales boost represented a decrease from the prior quarter's 4.5% expansion pace. Still, the company is tracking ahead of management's full-year sales guidance, given that comps are up 5.3% over the last nine months and it has projected 4.5% gains for 2016.

Image source: Getty Images.

Shake Shack's restaurant-level margins fell slightly thanks to rising labor costs. But earnings growth was healthy overall. "We delivered another quarter of solid results, with 40% growth in total revenue and a 28.8% Shack-level operating profit margin," CEO Randy Garutti said.

Garutti and his team are focusing on store expansions and raised their target to 19 locations due to launch this year, up from 18 targeted three months ago (and 16 to start the year). The quicker launch pace led to a significant boost in the revenue outlook for 2016. Meanwhile, Shake Shack provided an aggressive initial look at 2017 forecasts, which call for revenue of $350 million at the midpoint of the range and would represent 32% growth over this year's projected result. The company also plans to boost menu prices by about 2%, and so investors cheered the improving outlook for both sales and profit growth ahead for a stock that's been battered over the last 12 months.

Kohl's growth rebound

Kohl's shares jumped 11% higher, after the department-store chain reported improving -- but still negative -- revenue trends. Comparable-store sales fell by 1.7%, marking an uptick over the prior quarter's 1.8% decline and a significant increase over the 3.8% plunge it posted in the first quarter. "We are pleased to see continued improvement in our sales trends," CEO Kevin Mansell said in a press release that noted strength in the back-to-school shopping season. "We are encouraged by these trends as we enter the holiday season."

Image source: Getty Images.

The news was even better on the earnings side of the equation, as net income soared 22% higher to $146 million. And thanks to significant share repurchase spending, that boost translated into a 32% gain in earnings per share, which jumped to $0.83 from $0.63 last year.

Executives did a good job managing inventory and didn't have to resort to deep discounts to keep sales growth intact. Gross profit margin held steady at 37% of sales.

Mansell and his team would prefer to see positive comps right now. However, customer traffic and profits trends are both headed in the right direction, and that rebound was enough to push shares back into positive territory on the year.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool is short Shake Shack. We Fools may not 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.

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