Major benchmarks trended downward Wednesday, taking a break from the rally that had boosted stocks in the previous session. Investors seemed uncertain about President Donald Trump's plans to abandon the North American Free Trade Agreement (NAFTA). Among the worst performers of the day were Stryker Corporation (NYSE:SYK), Ultragenyx Pharmaceutical (NASDAQ:RARE), and La-Z-Boy (NYSE:LZB). Below, we'll look more closely at these stocks to tell you why they did so poorly.
Stryker strikes out
Shares of Stryker Corporation fell 5% today after the medical device company announced a voluntary recall of specific lots of its oral care products and instituted a temporary shipping hold on those products, which account for half of the revenue from its Sage Products segment. This follows a previous warning by the U.S. Food and Drug Administration (FDA) last month regarding these issues. Stryker admitted that there was the possibility of cross-contamination that could cause minor irritations and allergic reactions, but it was not aware of any serious safety issues. The company severed ties with the responsible third-party supplier and expects to begin shipping the products again next month. As a result of these actions, the company has reduced its expectations for the year to the lower end of its previously issued guidance, which included earnings guidance of between $6.45 and $6.55 per share.
Ultragenyx drug fails trial
Shares of Ultragenyx Pharmaceutical slumped 13% today after the rare-disease drugmaker announced disappointing results for a late-stage trial. The company had hoped that the drug, aceneuramic acid extended release (Ace-ER), would improve muscle strength in patients with muscle-wasting disorder GNE myopathy, as compared to a placebo. Unfortunately, the treatment failed to perform as anticipated, and the company decided to discontinue the study, as the drug failed to achieve both the primary and secondary objectives of the trial. Investors were justifiably disappointed, as this was one of Ultragenyx's most advanced indications.
La-Z-Boy reclines on earnings
Shares of La-Z-Boy plummeted 20%. The furniture maker released its fiscal first-quarter financial report, which wasn't as good as expected, as an unfavorable product mix weighed on the results. Even as revenue grew by 4.8%, same-store sales increased by a measly 0.7%, and earnings per share were 14% lower than in the prior-year quarter. Increases in other divisions bypassed the upholstery manufacturing operations, which is the company's most profitable segment, weighing on profit margins. La-Z-Boy expressed optimism for the future, particularly regarding its burgeoning e-commerce initiatives. The company pointed to its comprehensive strategy of increasing sales through its online store, leveraging its global supply chain to support other brands, and investing in new online companies.