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 1.32%), United Parcel Service (UPS 0.34%), and Guess? (GES 0.20%) 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.
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.
