Wall Street had another good session on Thursday, with further gains for major markets as benchmarks like the Russell 2000 index of small-cap stocks flirted with record highs. A favorable reading from the consumer price index showed only modest growth in prices, and the idea that inflation remains in check led market participants to believe that the Federal Reserve won't have to speed up its efforts to return short-term interest rates to more normal levels. Yet even with the overall market picking up ground, some companies had bad news that weighed on their share prices. Booking Holdings (BKNG -2.13%), Exelixis (EXEL -1.01%), and L Brands (BBWI -3.06%) were among the worst performers on the day. Here's why they did so poorly.
Shares of Booking Holdings lost 5% after the company announced its first-quarter financial results. The online travel giant behind the Booking.com and Priceline brand names reported solid revenue gains of 21%, and bottom-line increases of 20% from year-ago levels were better than most investors had expected to see. Yet several of Booking's internal business metrics continued to show slowing growth in key areas like hotel room nights booked, and projections for future results left some investors concerned about the viability of its long-term strategy. Booking Holdings tends to set a low bar when giving guidance, but investors aren't giving the travel company any benefit of the doubt in sending its share price lower today.
Exelixis has some bad pipeline news
Exelixis stock dropped 14.5% after the biotech company gave a negative update on one of its candidate treatments. Exelixis had been working with Roche Group's Genentech unit in a phase 3 trial studying a combination of Exelixis' MEK inhibitor Cotellic and Genentech's anti-PDL1 antibody Tecentriq in patients with certain extreme forms of colorectal cancer. The trial failed to meet its primary endpoint of demonstrating significantly improved survival compared to using a competing treatment. The news doesn't stop Exelixis from continuing to sell Cotellic for its approved indication with certain melanoma patients, but the company hopes to find at least some other indications to boost its total sales.
This isn't a surprise L Brands investors wanted
Finally, shares of L Brands finished lower by 7%. The parent of retail chains Bath & Body Works and Victoria's Secret warned that it now expects its first-quarter earnings to come in toward the lower end of its previously projected range of $0.15 to $0.20 per share, following the release of April monthly sales data that showed flat comparable sales compared to the year-ago period. Net revenue for the month was higher by 4%, although the company did say that the change in timing of the Easter holiday created some temporary distortions in the year-over-year comparisons. Investors will get more color when L Brands issues its full report later this month, but many shareholders fear a potential return to the tough conditions in the retail industry that have held some stocks in the space back for years now.