Thursday brought yet another day of gains for the Dow Jones Industrials and other key benchmark indexes. Market participants appreciated signs that their fears about global economic growth and escalating trade tensions might soon prove to have been overblown, especially given a more agreeable tone from Washington concerning negotiations with Chinese officials. Yet even though the market rose broadly, some individual stocks lost ground due to company-specific challenges. Duluth Holdings (DLTH -1.58%), Tailored Brands (TLRD), and Adverum Biotechnologies (ADVM -10.88%) were among the worst performers. Here's why they did so poorly.
Shares of Duluth Holdings dropped 11% for the day after releasing its second-quarter financial results. Its sales rose 10% from year-ago levels, but gross margin fell more than three percentage points. Duluth's profits also dropped substantially year over year. Founder Stephen Schlecht, who recently took over as CEO from Stephanie Pugliese after her late August exit, admitted that "our performance in the first half of this fiscal year fell below our expectations." Schlecht is convinced that focusing on the upcoming holiday season will give it a successful finish to the fiscal year, but investors seem to have more doubts about whether Duluth can get things turned around that quickly.
Tailored Brands suspends its dividend
Shares of formal apparel company Tailored Brands sank 30% in the wake of the release of its latest financial results. In its second quarter, company-wide sales fell 4% from year-ago levels, including a 5% decline from the key Men's Wearhouse chain and a nearly 4% drop at the Jos. A. Bank unit. Adjusted earnings were down precipitously year over year, and investors were especially disappointed to see Tailored Brands suspend its dividend, which had previously paid shareholders a yield exceeding 10%. The retailer's forecasts also looked grim, giving shareholders little to look forward to.
Adverum takes a dive
Finally, shares of Adverum Biotechnologies plunged 50%. The gene-therapy specialist presented data from its phase 1 clinical trial of its ADVM-022 treatment for wet age-related macular degeneration. Many of the trial's results were encouraging, including improved visual acuity on average. However, several patients experienced worse visual acuity. Also, biotech investors might have reacted negatively to news that the study saw 19 adverse events in six patients. Although none of them were severe, 14 were mild and five were moderate. Investors can expect more updates during the fourth quarter, when Adverum will provide further development plans for the trial and the treatment.