The stock market came under modest pressure on Thursday, although pullbacks were still relatively small and major benchmarks stayed close to their historic highs. Bad news on the earnings front from a major tech company weighed on investor sentiment, and some worried rising unemployment claims were a potential harbinger of economic weakness. Yet even with a slightly downbeat mood on Wall Street, some stocks managed to post strong gains. American Outdoor Brands (NASDAQ:SWBI), International Game Technology (NYSE:IGT), and Dillard's (NYSE:DDS) were among the top performers. Here's why they did so well.
A Smith & Wesson spinoff is coming
Shares of American Outdoor Brands gained 6% after it announced that it would break itself up into two companies. American Outdoor said it would spin off its firearm business into a company to be known as Smith & Wesson Brands, with the remaining corporate entity keeping its original name and containing the outdoor products and accessories business. Board chair Barry Monheit said he expects the breakup to let each company "better align its strategic objectives with its capital allocation priorities." Given the challenges related to the gun business overall, it'll be interesting to see which stock performs better once the deal closes in the second half of 2020.
IGT plays to win
International Game Technology saw its stock climb more than 23% after reporting its third-quarter financial results. Revenue for the slot machine and lottery specialist was essentially flat from year-earlier levels, and adjusted earnings per share plunged 32% year over year. Yet investors seemed pleased with the numbers, in part because of how the company fought against higher taxes in the Italian market and particularly strong performance in the year-ago quarter. Moreover, IGT's outlook was reasonably solid, and those following the stock are excited about the innovative CrystalBetting terminal and how it could be an even bigger draw both for players and for the company.
Dillard's makes some money
Finally, shares of Dillard's rose 14%. The department store retailer surprised investors by making a modest profit in the third quarter of 2019, and even though both revenue and net income were down year over year, Dillard's managed to post flat comparable sales. That was an improvement from the previous quarter. CEO William Dillard said that "we were not satisfied with the third quarter," but shareholders seemed happy about the progress that Dillard's has made in fighting back against an extremely difficult environment for department-store retailers.