Tuesday was another decent day on Wall Street, as most major benchmarks finished slightly above where they started the session. Hopes on the trade front helped to overcome downward pressure from economic readings in the U.S., and investors seem content to ride upward momentum into the last part of 2019. Yet some individual stocks didn't fare as well. Dollar Tree (DLTR 3.13%), Palo Alto Networks (PANW 0.21%), and Movado Group (MOV 6.36%) were among the worst performers. Here's why they did so poorly.
Dollar Tree wilts
Shares of Dollar Tree fell 15% after the dollar store retailer posted disappointing third-quarter financial results. Same-store sales grew 2.5% from year-earlier levels, but earnings came in toward the bottom end of Dollar Tree's previous guidance range. Moreover, the company's Family Dollar store chain underperformed the namesake Dollar Tree stores in terms of same-store comps, reversing trends that the company has seen in recent quarters. Tariffs are having a negative impact on Dollar Tree's overall results, and so the company has a lot to gain if the U.S. and China are able to come to an agreement that would eliminate those levies in the near future.
Palo Alto sees a possible slowdown
Palo Alto Networks saw its stock fall 12% after its results in the fiscal first quarter weren't good enough to overcome some doubts about its likely performance in the near future. The cybersecurity specialist's revenue rose 18% year over year during the period, but net losses widened, and even on an adjusted basis, net income moved lower from year-earlier levels. However, investors seemed to want a more favorable outlook than they got, with Palo Alto predicting revenue growth of 19% to 20% for the full fiscal year. Cybersecurity has gotten a lot more important lately, but fierce competition in the space has made it tougher for Palo Alto to maintain its leadership status.
The clock stops for Movado
Finally, shares of Movado Group plunged more than 20%. The watchmaker suffered a 1.6% drop in revenue, sending net income down 34% compared to year-earlier levels. CEO Efraim Grinberg attributed the shortfall to higher marketing investment in key watch brands during a tough environment in retail generally and in watches specifically. Even though the CEO is still excited about how the holiday season will go, Movado cut its fourth-quarter guidance as well. Movado has worked hard to freshen up its product line, with the acquisition of MVMT and its strategic move toward wearable devices. Yet it's taking longer than expected for those efforts to bear fruit, and investors seem to be losing their patience.