The stock market had logged a solid rally by Thursday afternoon as trade tensions eased. The U.S. postponed the implementation of 5% extra tariffs on certain Chinese goods by two weeks, while China is considering increasing imports of American farm goods.

Index

Change at 1:45 p.m. EDT

Dow Jones Industrial Average (DJINDICES:^DJI)

0.51%

S&P 500 (SNPINDEX:^GSPC)

0.61%

Nasdaq Composite (NASDAQINDEX:^IXIC)

0.67%

Data source: Yahoo! Finance.

Weak earnings reports from menswear retailer Tailored Brands (NYSE:TLRD) and cannabis producer Aurora Cannabis (NYSE:ACB) prevented those stocks from participating in the rally. Here's what happened.

Tailored Brands drops a bombshell

Shares of menswear retailer Tailored Brands fell off a cliff Thursday, down 27.8% by 1:45 p.m. EDT. The company behind Men's Wearhouse and Jos. A. Bank provided abysmal guidance for the third quarter, and it announced that it was suspending its dividend to focus on debt repayment and share buybacks.

Tailored Brands' second-quarter results weren't great. Sales were down 4.1%, with comparable sales down across all its brands. The core Men's Wearhouse brand was the weakest link, with comps down 4.3%. Non-GAAP (adjusted) earnings per share came in at $0.82, down from $1.07 in the prior-year period.

A man in a suit.

Image source: Tailored Brands.

The third quarter will be even worse for the retailer. Tailored Brands expects to produce adjusted EPS between $0.40 and $0.45, down from $1.01 in the prior-year period. Comparable sales will be down again, with the company expecting a 3% to 5% decline for Men's Wearhouse, and a 2% to 4% decline for Jos. A. Bank.

Beginning in the fourth quarter, Tailored Brands will no longer pay its regular quarterly dividend. That will save the company $36.5 million annually, which it will use to pay down debt and buy back shares. Tailored Brands currently has about $1.15 billion of long-term debt, so this will barely make a dent.

If there's one kind of company that the market does not like right now, on the potential eve of a recession, it's a not-trendy retailer with tumbling sales and crashing profits.

A tough quarter for Aurora Cannabis

Canadian cannabis producer Aurora Cannabis didn't live up to expectations with its fiscal fourth-quarter report. Revenue grew 52% year over year to $98.9 million in Canadian dollars, but that was more than CA$4.5 million below the average analyst estimate. It was also below the company's guidance, issued in August, calling for revenue between CA$100 million and CA$107 million. The stock was down 9.6% at 1:45 p.m. EDT.

Aurora isn't even in the ballpark of being profitable, but that was expected. Adjusted EBITDA was a loss of $11.7 million, a big improvement over the third quarter, but negative nonetheless. "Developing a profitable and robust global cannabis company is extremely important to Aurora," reads the company's earnings release. It's not there yet.

Looking forward, Aurora expects its sales volumes and revenues to be volatile as it launches new products in December. It sees adjusted EBITDA improving in the future, driven by higher revenue, a rising gross margin, and keeping costs in check.

With Aurora valued at roughly $6 billion, this is certainly a risky stock.