Wednesday was a great day for the stock market, with the Dow Jones Industrial Average jumping more than 500 points in the wake of the midterm elections. Investors seemed pleased with the results of the contests, which included Republicans retaining control of the Senate but Democrats gaining the majority in the House of Representatives. Yet even amid the celebratory mood on Wall Street, some companies had bad news that sent their shares tumbling. Zillow Group (NASDAQ:Z) (NASDAQ:ZG), Match Group (NASDAQ:MTCH), and Michael Kors Holdings (NYSE:CPRI) were among the worst performers on the day. Here's why they did so poorly.
Zillow gives disappointing guidance
Shares of Zillow Group plunged 27% after the online real estate platform provider released its third-quarter financial results. Performance for the period seemed encouraging, including a 22% rise in revenue and an all-time high 195 million unique users during one month of the summer quarter. But investors weren't pleased at Zillow's projections for the near future, as concerns about churn rates among advertisers, higher expenses, and fears that rising interest rates could put an end to the long bull market in housing led the company to issue conservative guidance on revenue and adjusted pre-tax operating profit for the remainder of the year. If housing starts going south, Zillow could see key sources of revenue go with it.
Investors fall out of love with Match
Match Group stock fell 17% despite what at first glance seemed to be quite solid results from the online dating specialist during the third quarter of 2018. Match said that total revenue climbed 29%, with the number of subscribers to its services rising to 8.1 million and adjusted pre-tax operating earnings growing at a 38% pace compared to the year-earlier quarter. Moreover, the Tinder operator declared a special dividend of $2 per share payable next month. Yet investors had high expectations for Match coming into the report, and the company's sales guidance raised concerns that it won't be able to sustain the growth rates that shareholders have come to take for granted from Match.
Kors hits a rough patch
Finally, shares of Michael Kors Holdings finished lower by 15%. The luxury retailer delivered results for its fiscal second quarter that in some ways were the opposite of what Zillow and Match gave, featuring an optimistic outlook but subpar financial performance during the actual period. The acquisition of Jimmy Choo last year helped to produce some top-line growth, but the namesake Michael Kors segment of the business had lower revenue and comparable-store sales figures. Even a rise in earnings guidance for the remainder of 2018 wasn't enough to allay concerns that Kors' recent bid to acquire Versace could prove to be too much of a distraction from the need to focus on making the most of the business the luxury retailer already has.