Stocks closed higher on Wednesday, extending yesterday's modest gains despite heightened tensions with North Korea and concerns over the economic impact of Hurricane Harvey. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) each posted gains.
Today's stock market
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Tech stocks enjoyed a good session, with the Technology Select Sector SPDR Fund (NYSEMKT:XLK) up 0.7%. Gold stocks declined as the market shifted away from the safe-haven investment, leaving the Market Vectors Gold Miners ETF (NYSEMKT:GDX) down 1.1%.
As for individual stocks, shares of fashion accessories and handbag specialist Vera Bradley (NASDAQ:VRA) plunged after management changes overshadowed a decent quarter, and earnings from Bob Evans Farms (NASDAQ:BOBE) drove the refrigerated convenience food company higher.
Vera Bradley's executive turnover
After initially climbing as much as 13.2% in early trading, Vera Bradley stock pulled back to close down 9.2% after the company followed better-than-expected fiscal second-quarter 2018 results with news of the impending departure of two key executives.
Revenue fell 5.7% year over year to $112.4 million, as a 4.3% decline in comparable sales was offset by new store growth. That translated to adjusted net income of $4.6 million, or $0.13 per share. Analysts were only expecting adjusted earnings of $0.10 per share on revenue of $11.7 million.
Vera Bradley CEO Robert Wallstrom noted that comparable sales trends improved sequentially from last quarter, though today's challenging retail environment continued to hold back growth.
In a separate SEC filing, however, Vera Bradley announced Chief Creative Officer and co-founder Barbara Bradley Baekgaard will step down from her post, effective tomorrow, to be replaced by Beatrice Mac Cabe. Baekgaard will remain on Vera Bradley's board, and will continue to be employed by the company to "focus on various Vera Bradley-related products."
In addition, Kim Colby, Vera Bradley's executive vice president of design, will step down late next month, though she'll continue to "provide support to the company as an advocate for the Vera Bradley brand."
The worry here is that Vera Bradley won't be the same as its co-founder reduces her role, so it's understandable that this turnover would eclipse any improvement shown in recent months. But given the continued involvement and seeming loyalty of these two executives to the brand, I suspect Vera Bradley will be just fine over the long run.
Bob Evans Farms' beat and raise
Shares of Bob Evans Farms climbed as much as 10.9% early today, then settled to close up 7% after the refrigerated and frozen convenience food specialist delivered its own delicious quarter.
For its fiscal first quarter 2018, Bob Evans Farms' revenue climbed 27.1% year over year to $109.3 million -- well above Wall Street's expectation for sales of $102.3 -- helped by volume growth in both refrigerated side dishes and sausage during the quarter. Excluding Pineland Farms (which Bob Evans acquired in May), as well as sales to Bob Evans Restaurants (which was divested earlier this year), sales climbed 11.1%. On the bottom line, adjusted net income arrived at $7.4 million, or $0.37 per share, up from $4.6 million, or $0.23 per share in the same year-ago period. Analysts, on average, were expecting roughly the same adjusted earnings on significantly lower sales of $102.3 million.
For the full fiscal year, Bob Evans Farms increased its guidance for sales to be in the range of $474 million to $486 million (up from $464 million to $476 million previously), and for adjusted earnings per share of $2.10 to $2.30 (up from $2.06 to $2.24 previously).
This was a simple beat-and-raise from Bob Evans Farms, so it's no surprise shares jumped higher today.