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Why Guess?, Canadian Solar, and Lands' End Slumped Today

By Dan Caplinger – Updated Apr 14, 2019 at 7:23PM

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Competition and poor earnings results left these stocks out of the rally.

The stock market climbed higher on Thursday, sending the Dow Jones Industrial Average up more than 200 points and other indexes to similar percentage gains. General optimism about the U.S. economy followed on the heels of Wednesday's decision from the Federal Reserve to keep interest rates unchanged, and some positive news from key sectors kept growth investors happy. Yet a few stocks weren't able to generate the enthusiasm needed to participate in the rally. Guess? (GES -0.94%), Canadian Solar (CSIQ 0.44%), and Lands' End (LE 0.70%) were among the worst performers. Here's why they did so poorly.

Who got hurt in Levi's IPO? Can you Guess?

Shares of Guess? dropped 12.5% following the jeans maker's release of fourth-quarter financial results. Revenue climbed 6% during the quarter, with adjusted earnings posting a double-digit percentage increase. Yet investors had expected a more extensive bounce-back from difficult conditions in recent years, and guidance for revenue growth of just 4% to 5% in the coming year along with weak earnings gains stood in stark contrast to the growth prospects that jeans rival Levi Strauss has in front of it. With Levi's IPO hype stealing the show, Guess? shareholders seemed unwilling to remain patient with turnaround efforts that have taken a while to deliver results.

Several models wearing jeans and jean shorts in front of an old orange car in front of a Guess logo on the back wall.

Image source: Guess?.

Canadian Solar goes dark

Canadian Solar stock plunged more than 18% after the solar specialist released fourth-quarter financial results that included downbeat guidance for the coming year. Total solar module shipments for the quarter came in at 1.95 gigawatts, up from 1.59 gigawatts in the third quarter, and revenue and earnings were both higher than in the year-earlier period. However, Canadian Solar believes that sales growth will slow in 2019, projecting full-year module shipments of 7.4 to 7.8 gigawatts. That could result in an outright decline in net income for 2019 compared to 2018, and even after a period of sharp growth, Canadian Solar shareholders don't seem ready to accept the "temporary pullback" that CEO Shawn Qu anticipates in the coming year.

Check out the latest earnings call transcripts for Guess?, Canadian Solar, and Lands' End.

Lands' End hits the brakes

Finally, shares of Lands' End fell 6%. At first glance, the apparel retailer seemed to post strong results. Net revenue for the fourth quarter of 2018 fell 1.6% from the year-ago period, but most of the decline came from there being an extra week in Q4 2017. Same-store sales jumped 9.1%, and although the company noted that there were 125 fewer Lands' End at Sears locations than it had 12 months earlier, earnings were up sharply. Yet after bidding shares up shortly after the market opened, investors seemed to take issue with CEO Jerome Griffith's strategy of investing further in Lands' End's digital presence and using third-party e-commerce channels to boost marketing and brand awareness. Nevertheless, the retailer's future looks brighter than today's stock move implies.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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