Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The stock market largely marked time on Thursday, waiting for tomorrow's important U.S. employment report for the latest signs of whether the economy is still strong enough to warrant continued reductions in central-bank intervention activity. Yet, even though the Dow and S&P 500 were little changed today, shares of Pier 1 Imports (PIRRQ), Qunar Cayman Islands (QUNR), and Bed Bath & Beyond (BBBY) fell sharply from bad news that hit those individual companies hard.
Pier 1 fell 12% after the home-furnishings retailer posted same-store sales growth of just 1.3% for December, leaving CEO Alex Smith "extremely disappointed" in light of what had been a record year for the weekend after Thanksgiving. Pier 1 blamed the weather for the declines, citing strong execution and promotional pricing behavior that nevertheless was unable to offset the downside pressure from cold. Pier 1, therefore, cut guidance for the fourth quarter and the full fiscal year, expecting flat comps for the fourth quarter, and quarterly earnings per share off more than 20% from its previously announced range.
Qunar Cayman Islands dropped 14%, giving back all of its gains from the past two trading sessions. Qunar is a big player in the online travel industry in China and, with backing from Baidu.com, the company has been competing fiercely against Ctrip.com International (TCOM 0.24%) and its rival travel portal. Earlier in the week, Qunar had soared as it experienced better growth among mobile users than Ctrip; but with both Ctrip and Qunar now expecting to move into new areas of the travel business, weaker profit margins could hurt both players. Ctrip fell 10%.
Bed Bath & Beyond declined 12% after falling prey to many of the same problems as Pier 1, reporting quarterly earnings last night that rose just 2% on a 1.3% rise in same-store sales. With the home-goods retailer cutting its profit forecast for the full fiscal year by 2% to 3%, it's readily apparent that Bed Bath & Beyond has seen increased competition from online retailers, especially given the relatively poor performance from its bricks-and-mortar peers in the space. Retailers like Bed Bath & Beyond will have to keep working on their own online strategies in order to compete against other players in the space.
