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Why Office Depot, Roku, and Landec Slumped Today

By Dan Caplinger - Updated Apr 4, 2019 at 4:40PM

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Worries hurt these companies despite overall gains in the stock market.

The stock market was generally higher on Thursday, although not all major indexes were able to post gains. Broad-based benchmarks were mixed, with the S&P 500 easing higher but the Nasdaq Composite finishing slightly lower amid conflicting assessments of the likely future direction of the global economy and corporate profits. Yet even though the market ended the session close to where it started, some stocks posted sharp declines. Office Depot (ODP -0.02%), Roku (ROKU -4.68%), and Landec (LNDC -1.52%) were among the worst performers. Here's why they did so poorly.

Office Depot loses ground

Shares of Office Depot plummeted almost 24% after the office supply retailer warned that its first-quarter results would be discouraging. The company said that it expects sales for the period to be down about 2.5% from year-ago levels, with adjusted operating income falling more than 30%. Office Depot blamed its CompuCom IT services division for the shortfall, but CEO Gerry Smith still sees CompuCom as being "an important strategic asset for our future." However, many fear that the company might become the next victim of e-commerce competition, and it'll take more effort for Office Depot to show that it's truly turning itself around.

Office Depot store location with logo above doorway.

Image source: Office Depot.

Roku fades to black on analyst concerns

Roku saw its stock fall 6% after the television technology specialist got negative comments from analysts at Guggenheim. The analyst company downgraded Roku from buy to neutral and cut its price target by $5 to $72 per share. Guggenheim worries that efforts from Apple to come out with a streaming-video product could indeed prove to be a competitive threat to Roku, even though the platform as initially conceived would include Roku's own channel offering. Even Guggenheim believes that Roku has an impressive growth trajectory ahead, but it questions whether the future will be as bright as investors seem to believe -- and as Roku's own stock price suggests.

Landec looks less than healthy

Finally, shares of Landec dropped more than 12%. The diversified health and wellness solutions provider reported its fiscal third-quarter financial results, which included a 7% rise in revenue but a more-than-50% plunge in earnings per share compared to year-earlier levels. Bouncing back from a disappointing quarter three months ago, Landec said that it's made progress toward its long-term strategic objectives, which include transformative changes at its Curation Foods food business and considerable work at growing its Lifecore Biomedical contract development and manufacturing organization. Yet investors wanted to see clearer evidence of that progress, and until they do, it could be hard for Landec's stock to recover significantly.

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Stocks Mentioned

The ODP Corporation Stock Quote
The ODP Corporation
ODP
$41.24 (-0.02%) $0.01
Landec Corporation Stock Quote
Landec Corporation
LNDC
$9.06 (-1.52%) $0.14
Roku Stock Quote
Roku
ROKU
$93.26 (-4.68%) $-4.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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