The stock market had a reasonably good session on Tuesday, with market participants reacting favorably to positive news on the domestic economic front despite worries from overseas over the long weekend. Major benchmarks clawed their way out of negative territory early to post solid gains at midday, and by the end of the session, stock indexes were higher by as much as 0.2%. Yet not every company shared in that overall success. Middleby (NASDAQ:MIDD), Tile Shop Holdings (OTC:TTSH), and Uniti (NASDAQ:UNIT) were among the worst performers. Here's why they did so poorly.
Middleby loses its leader
Shares of Middleby dropped 7% after the maker of kitchen equipment said that its chief executive officer would retire effective immediately. Selim Bassoul, who also served as board chair in addition to being CEO, said that he will focus on his family and his Bassoul Dignity Foundation. In his place, Timothy FitzGerald will take over the CEO role, having been Middleby's CFO since 2003. Company executives all sang their praises of Bassoul's service, but given how critical the departing CEO has been to Middleby's long-term success, some shareholders question whether it can keep making progress in its transformative efforts.
Tile Shop cracks
Tile retailer Tile Shop Holdings saw its stock fall 16.5% following the release of its fourth-quarter financial report. Tile Shop's results seemed solid at first glance, with revenue climbing nearly 7% on a 5% rise in comparable-store sales. However, the tile retailer wasn't able to eliminate its net loss completely during the period, and Tile Shop's guidance indicates continued careful management of expenses in an effort to try to regain profitability. The company's efforts to move toward serving more upscale customers have involved some shifts in strategy, but many believe that Tile Shop will see a payoff from them in the long run.
Uniti takes a hit from Windstream
Finally, shares of Uniti Group plunged more than 37%. The communications infrastructure real estate investment trust (REIT) issued a statement today regarding a court's ruling against Windstream Holdings subsidiary Windstream Services, noting that the decision relates to the spinoff of network assets that ended up under Uniti's corporate umbrella. With creditors going after Windstream, investors in Uniti worry that the spinoff might somehow end up getting reversed, with claims allowed against Uniti assets. Moreover, even if the spinoff is honored, the ongoing troubles that Windstream faces jeopardize the REIT's major source of income. Either way, today's decline in Uniti's share price seems justified, and investors will have to wait for the other shoe to drop to see what happens.