The stock market meandered on Thursday, with no noteworthy news to give it direction. Major benchmarks never moved very far from where they began, while investors were distracted by the inability of the White House to achieve progress on policy initiatives and expressed concern regarding the approaching debt ceiling debate. Adding to the subdued mood was bad news from a number of individual companies. J.M. Smucker (NYSE:SJM), Hormel Foods (NYSE:HRL), and The Toro Company (NYSE:TTC) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Coffee crimps Smucker's quarter
Shares of J.M. Smucker fell 9.5% after the company's first-quarter report revealed lower demand for Folgers coffee. Revenue fell by 4%, and increases in marketing and higher commodity costs caused net income to plummeted 23% compared to the year-ago period. Due to these disappointing results, J.M. Smucker reduced its full-year earnings forecast, which now falls below analysts' expectations.
CEO Mark Smucker believes the company has the situation under control, stating, "[W]e have taken actions to improve our competitive positioning for Folgers. As a result, volume trends are improving. ... We are also pleased with the progress on our cost management programs." Investors seemed unconvinced.
Hormel isn't bringing home the bacon
Hormel Foods stock dropped 5.4% after the company reported financial results that disappointed investors. The food purveyor, known for its Spam and Skippy brands, saw revenue fall 4% and earnings per share shrink 6%. Lower demand for Jennie-O Turkey and Muscle Milk contributed the shortfall, which was partially offset by increased demand for bacon, pepperoni, and Wholly Guacamole. Also hitting results was the divestiture of the Farmer John brand, which was sold late last year. Hormel expects that its earnings will continue to suffer from higher input costs for pork and beef.
The company stated that it paid its 356th consecutive quarterly dividend payment, which amounts to $0.68 annually. Hormel also announced that it has acquired Cidade do Sol, the Brazilian company popular for its Ceratti brand of premium lunch meats, which gives the company a stake in the growing Latin American market. Nevertheless, shareholders seemed concerned that progress was slow in coming.
Toro shares get trimmed
Finally, Toro stock plunged 8.7% despite record financial results. The lawn care equipment company reported third-quarter sales in its professional segment jumped 9.5%, while residential sales fell 9.3%, resulting in an overall increase of 4.5% compared to the year-ago quarter. Toro was also able to leverage its expenses across higher sales, resulting in improved margins and earnings that increased 22%. CEO Richard Olson was encouraged, saying, "We are pleased to deliver strong results for the quarter driven by positive momentum in our professional segment. Innovative new offerings across our professional portfolio fueled the growth."
Investors seemed to focus on the recent run-up in shares, which have gained 29% in the last year. Even given Toro's record results, the stock may have simply gotten ahead of itself.