Huge gains for the stock market have become commonplace at the beginning of the new year, and Tuesday continued the trend as the Dow, S&P 500, and Nasdaq Composite once again leaped to records. Nothing has emerged to challenge investors' optimistic outlook on the prospects for the U.S. economy, especially in light of the anticipated upsurge in corporate profits that should stem from lower tax rates taking effect this year. Yet some individual companies failed to share in the broader enthusiasm. Express (NYSE:EXPR), AK Steel (NYSE:AKS), and Acuity Brands (NYSE:AYI) 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.
Express disappoints during the holidays
Shares of Express dropped 20% after the retailer gave a downbeat update on its outlook for its fiscal fourth-quarter and the full fiscal year's financial results. CEO David Kornberg said that Express enjoyed solid sales in November and early December, but sluggish traffic levels leading up to the end of the holiday season caused the overall period to trail internal projections. Dresses and sweaters were the primary product areas that hurt sales, and brick-and-mortar weakness outweighed double-digit percentage gains in e-commerce sales. With new comparable-sales guidance showing a 4% drop from year-earlier levels, Express has a lot of work to do to buck trends that have affected the entire retail industry recently.
AK Steel breaks down
AK Steel stock declined 8% in the wake of negative comments from analysts. Jefferies downgraded the steelmaker from buy to hold, despite the fact that the analyst actually raised its price target on the stock by $1.25 to $6.50 per share. Jefferies expressed some concerns that even if the rally in steel at the beginning of the year were to continue, AK Steel might not be in the best position to benefit from increased demand industrywide. Moreover, the threat of a secondary stock offering could dilute shareholders buying at current levels. Even with today's decline, the stock is still up nearly 8% since the end of 2017.
Acuity turns out the lights
Finally, shares of Acuity Brands lost 15%. The maker of lighting and related control systems reported unimpressive financial results for its fiscal first quarter, including a 1% drop in revenue and a 3% decline in adjusted earnings per share. CEO Vernon Nagel blamed lower sales in the home center and showroom channel, as well as sales in the U.K. and Mexico. Acuity remains optimistic that new lighting solutions that integrate Internet of Things technology could help drive long-term growth, but investors appear to be impatient with the pace of progress that the company has delivered up until now.