Please ensure Javascript is enabled for purposes of website accessibility

Why Hershey, United Parcel Service, and Guess? Slumped Today

By Dan Caplinger - Feb 1, 2018 at 3:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

On a turbulent day for the market, these stocks fell. Find out why.

Wall Street saw continued volatility on Thursday, with major benchmarks starting the day with losses, climbing to sizable gains at midday, and then giving up those gains to finish close to where they began. Earnings season has introduced some choppiness, as some companies haven't thrived the way that investors expected them to, and more broadly, market participants seem like they're preparing for a possible pullback from the repeated record highs that the Dow and other major indexes posted in January. Bad news about several stocks also weighed on sentiment. Hershey (HSY 2.71%), United Parcel Service (UPS 1.34%), and Guess? (GES -0.88%) 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.

Hershey gets a little sour

Share of Hershey fell 6% after the chocolate maker reported fourth-quarter financial results that fell short of the mark. Net sales for the quarter were down 1.6% compared to the previous year's period, helping to send adjusted net income down by nearly 13%. The confectioner said that demand in international markets wasn't as strong as many had expected, and some timing issues related to shipments in its North American segment also weighed on performance. With consumer trends leaning away from candy toward foods that are perceived as being healthier, Hershey has had to look for strategic moves to try to diversify its product offerings, but it will take time for the company to reinvent itself fully.

Packaging for Hershey's Mini Kisses.

Image source: Hershey.

UPS deals with the downside of e-commerce

United Parcel Service stock dropped 6% in the wake of the company's fourth-quarter financial report. The delivery and logistics specialist reported solid gains of 11% in sales, but profit growth was limited to just 3% on an adjusted basis. UPS blamed shipment demand that exceeded its capacity during especially busy periods of the holiday season for additional costs that hit its bottom line hard. The company hopes to use savings from tax reform to help bulk up its network to handle the demands of e-commerce on its logistics assets, but shareholders worry that pressure from online shopping providers seeking their own delivery solutions could pose a long-term threat to UPS.

Guess? deals with troubling comments

Finally, shares of Guess? plunged 18%. The jeans maker faced fallout from a tweet from actress and model Kate Upton yesterday that said, "It's disappointing that such an iconic women's brand @GUESS is still empowering Paul Marciano as their creative director #metoo." Readers immediately drew the inference that Upton, who had modeled for Guess? in the past, was implying allegations of sexual misconduct against the retailer's co-founder. The denim specialist has already faced major challenges to its business, and investors have to be afraid of the chilling effect on consumers that the latest news could have.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

United Parcel Service, Inc. Stock Quote
United Parcel Service, Inc.
UPS
$184.99 (1.34%) $2.45
The Hershey Company Stock Quote
The Hershey Company
HSY
$221.00 (2.71%) $5.84
Guess?, Inc. Stock Quote
Guess?, Inc.
GES
$16.90 (-0.88%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.