The stock market lost ground Thursday as investors reacted negatively to news regarding proposed U.S. corporate and individual income tax cuts. Reports surfaced that the Senate version of tax reform legislation would use a much less aggressive framework, retaining a complex set of seven tax brackets and potentially delaying corporate tax rate reductions until 2019. Major benchmarks fell around 0.5%, with small caps underperforming their larger counterparts. Yet some companies still were able to deliver good news today, and Macy's (NYSE:M), Hostess Brands (NASDAQ:TWNK), and Perrigo (NYSE:PRGO) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.
Macy's gets ready for the holidays
Shares of Macy's climbed 11% after the department store retailer released its third-quarter financial report. Investors had been prepared for the retail giant to suffer another year-over-year decline in revenue, and sure enough, Macy's top line was down 6% on a 4% drop in comparable sales. However, the company believes that the holiday season will be strong, thanks to e-commerce initiatives and the newly relaunched loyalty program driving shoppers into stores and onto online channels. If strategic moves like new store concepts and monetizing valuable real estate work out, then Macy's could come out of the holidays looking better than ever.
Hostess bakes up a good quarter
Hostess Brands stock gained almost 8% in the wake of the company's release of financial results for the third quarter. The Twinkie maker said that net revenue dropped 2%, pointing to supply issues and shipment disruptions related to Hurricanes Harvey and Irma. Yet in-store bakery sales climbed at a pace that nearly doubled compared to the first half of 2017, and Hostess pointed to new products like Chocolate Cake Twinkies, White Fudge Ding Dongs, and Golden CupCakes in driving efforts to grow the top line. Hostess also issued favorable guidance for the full year, including both revenue and earnings projections that exceeded current expectations among investors. Even though the impending retirement of CEO Bill Toler looms large, Hostess is optimistic about its prospects for long-term growth.
Perrigo stays healthy
Finally, shares of Perrigo finished higher by 8%. The specialty drug manufacturer said that its revenue fell 2% in the third quarter compared to the same period a year ago, but the company reversed a massive year-earlier loss by posting a modest profit. On an adjusted basis, net income climbed 12%, and the results were well ahead of what nervous investors had expected from the drug maker. Perrigo also raised its guidance for the full year, with new estimates for its bottom line now expected to be far better than the consensus forecast among those following the stock. With the company having cut debt dramatically, shareholders are more confident than ever about Perrigo's chances to thrive even if a shakeout in the pharmaceutical industry happens in the near future.