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What Happened in the Stock Market Today

By Steve Symington - Updated Aug 22, 2019 at 5:28PM

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See why Nordstrom popped and L Brands dropped on a mixed day for the broader markets.

Major market benchmarks waffled between positive and negative territory on Thursday as investors weighed a slate of mostly strong earnings reports against comments from U.S. Federal Reserve officials indicating the central bank is unlikely to reduce rates again next month. The Dow Jones Industrial Average (^DJI -2.48%) and the S&P 500 (^GSPC -2.90%) posted mixed results.

Today's stock market

Index Percentage Change Point Change
Dow 0.19% 49.51
S&P 500 (0.05%) (1.48)

Data source: Yahoo! Finance.

As for individual stocks, disparate quarterly reports left shares of Nordstrom (JWN -7.05%) and L Brands (BBWI -7.45%) traveling in different directions.

Man in suit weighing gold coins on a traditional balance scale.

Image source: Getty Images.

Nordstrom's profits improve

Shares of Nordstrom soared 15.9% after the luxury department store chain announced strong earnings despite light revenue in the second quarter.

Revenue fell 4.8% year over year to $3.872 billion, near the low end of its own target range due to a "challenging start to the quarter" given soft sales for its Anniversary Sale event and "off-price" business. Net earnings declined around 5.3% on a per-share basis to $0.90, which was far above consensus estimates for earnings of $0.75 per share.

Co-President Erik Nordstrom credited the company's bottom-line outperformance to "inventory and expense discipline."

"We're focused on driving our top-line, and while this can take time, we are confident in our ability to manage through cycles," Nordstrom added. "We remain encouraged by our key initiatives, including our local market strategy, and are making good progress in key areas of focus that we believe will collectively drive increased value creation for our shareholders."

L Brands' ugly quarter

Meanwhile, shares of L Brands dropped 3.5% after the parent company of Victoria's Secret and Bath & Body Works posted a mixed quarterly update.

L Brands' net sales fell 2.8% year over year to $2.9 billion, translating into reported net income of $37.6 million, or $0.14 per share, down from $0.36 per share a year ago. To be fair, however, that bottom-line result also included a pre-tax charge of $0.11 per share related to early debt extinguishment. Adjusted for that item, net income was $67.6 million, or $0.24 per share.

Analysts, on average, were technically modeling lower adjusted earnings of $0.20 per share on higher revenue of $2.95 billion. 

Driving L Brands' top-line result was a combination of store closures and a 1% comparable-sales ("comps") drop. Within the latter, a 6% comps decline from Victoria's Secret more than offset 8% growth from Bath & Body Works locations.

But it also didn't help that L Brands told investors to expect third-quarter earnings to be approximately breakeven on a per-share basis, plus or minus $0.05 per share. That was well below average expectations for third-quarter earnings of $0.08 per share.

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Stocks Mentioned

Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
JWN
$23.07 (-7.05%) $-1.75
Bath & Body Works, Inc. Stock Quote
Bath & Body Works, Inc.
BBWI
$43.50 (-7.45%) $-3.50
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,844.61 (-2.48%) $-809.98
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,970.14 (-2.90%) $-118.71

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

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