Thursday was a roller-coaster ride for the major indexes, with significant swings up and down. Elevated volatility wasn't too much of a surprise following the beating stocks took on Wednesday, when the S&P 500 plunged nearly 3%. While most market benchmarks finished higher today, some stocks were hit hard by their own issues. Tapestry (NYSE:TPR), General Electric (NYSE:GE), and Canopy Growth (NYSE:CGC) all posted losses. Here's what happened.
Tapestry's Kate Spade brand has issues
Shares of Tapestry, the company behind the Coach, Kate Spade, and Stuart Weitzman luxury brands, plummeted 22.6% in the wake of a somewhat disappointing fiscal fourth-quarter report. Tapestry managed to grow total revenue by 2% from the prior-year period, beating analyst estimates, but its Kate Spade brand struggled.
Kate Spade comparable-store sales were down 6% in the quarter, and the company expects more modest growth from the brand in fiscal 2020. Tapestry now forecasts sales in fiscal 2020 to grow by a low-single-digit percentage, and for earnings per share to be roughly flat compared to fiscal 2019. While the core Coach brand is growing, investors didn't react well to weak sales from Kate Spade.
General Electric hit by whistle-blower claims
General Electric stock dropped 11.3% after Harry Markopolos, an accounting expert who blew the whistle on Bernie Madoff's Ponzi scheme, set his sights on the industrial giant. Markopolos, who is working with an unidentified hedge fund, released a report on Thursday accusing GE of understating liabilities in its insurance business and not properly accounting for its investment in Baker Hughes.
The report was posted on gefraud.com, which claims that the company has "an Enronesque business approach that has left GE on the verge of insolvency." GE issued a press release calling the claims meritless. CEO Lawrence Culp later said the report was "market manipulation."
Canopy Growth loses big
Shares of Canopy Growth plunged 14.4% after the Canadian cannabis producer reported ugly fiscal Q1 results. While revenue surged by nearly 250% year over year to 90.5 million Canadian dollars, it was down from the previous quarter and more than CA$20 million below the average analyst estimate. The weak revenue was partly due to the risk of oversupply of certain oil and softgel products in some markets, which led the company to reduce its net revenue by $6.4 million to account for estimated future returns.
On top of lower-than-expected sales, Canopy reported a net loss of $1.28 billion, mostly due to a noncash loss on the extinguishment of warrants held by Constellation Brands. Despite the weak results, the company expects fiscal 2020 to be an exciting time for the cannabis industry, with new product formats nearly ready to launch.