The stock market enjoyed a solid advance on Friday, carrying positive momentum into the weekend on optimism that long-held concerns about trade and macroeconomic conditions worldwide will give way to a favorable outcome. Most benchmarks were higher by 0.5% to 0.8%, with particular strength in sectors like technology. However, not every stock was able to join in the celebration to finish the week. Adobe (NASDAQ:ADBE), BioScrip (NASDAQ:BIOS), and Ascena Retail Group (NASDAQ:ASNA) were among the worst performers. Here's why they did so poorly.
Adobe disappoints despite record sales
Shares of Adobe dropped almost 4% after the software giant reported fiscal first-quarter financial results. The maker of popular creative software platforms said that its sales soared 25% from the year-ago quarter, with an even stronger 29% gain in recurring subscription-based revenue. Net income was also up by double-digit percentages from year-ago levels, but some investors weren't pleased with Adobe's guidance for the current fiscal second quarter. Adobe believes that temporary headwinds from integrating recent acquisitions will give way to stronger growth in the long run, and long-term investors might well appreciate the brief decline in the tech company's stock.
BioScrip makes a big buy
BioScrip's stock plunged 21% following the infusion therapy specialist's announcement that it would purchase home-therapy rival Option Care Enterprises. Under the terms of the deal, BioScrip will issue new shares to the owners of Option Care Enterprises, which include private equity investor Madison Dearborn Partners and drugstore giant Walgreens Boots Alliance. Once the merger is complete, Madison Dearborn and Walgreens will own roughly 80% of the combined company, leaving BioScrip's shareholders collectively holding a minority stake. The stock initially jumped immediately after the announcement, but BioScrip has faced its share of troubles over the years, and shareholders apparently have questions about the direction that the merged company will take and how they'll profit from it.
Ascena takes a retail hit
Finally, shares of Ascena Retail Group plummeted 28%. The parent of retailers Ann Taylor, Justice, Dress Barn, and Lane Bryant reported a wider loss in its fiscal second quarter than it did a year ago, and although the company's premium fashion concepts had extremely encouraging double-digit growth in comparable sales, plus fashion concepts struggled, holding Ascena's overall gains in comps to just 2%. The retailer also sees weakness continuing into the current quarter, and investors worry that the company's chains might be falling out fashion -- and carrying Ascena's share price with them.