A humorous look at the companies that caught our eye, for better or worse, this week
There’s an easy fix for Lululemon’s excessively sheer yoga pants: Wear a pair of long johns over top. Or, since the pants only become see-through when the person bends over, put a label on them that says: “Warning: Not suitable for activities that involve bending over.” But no, the retailer is recalling all of the faulty bottoms at a cost of up to $17-million in lost first-quarter revenue, causing the stock to plunge and creating unnecessary misery for investors. And voyeurs.
Among schoolchildren, it is common knowledge that wearing a new pair of sneakers will make you run significantly faster. And among investors, it is widely known that owning shares of Nike will make your portfolio grow faster. At least that was the case this week, when the athletic shoe giant posted a 16-per-cent jump in quarterly profit, boosted by rebounding orders in China and expanding gross margins. The stock has the wind at its back.
You know when you receive a package, and as soon as you open it a spring-loaded boxing glove punches you in the face? Investors in FedEx know the feeling: The global parcel delivery company posted a 31-per-cent drop in third-quarter profit and slashed its full-year outlook, citing weak shipments to and from Asia and a shift to slower, less expensive delivery methods. With FedEx planning to cut air capacity and trim its work force, the stock’s nursing a shiner.
For Suntech Power investors, this week ushered in a dramatic eclipse. Hammered by a glut of solar panels and plunging prices worldwide, the Chinese company’s main operating subsidiary filed for bankruptcy, sending the already battered stock to new lows. With numerous other panel makers in the United States and Europe scaling back or closing shop, the solar power business is experiencing some dark days indeed.
Remember when The Hunger Games – the heartwarming and inspiring tale of teenagers who bludgeon each other to death – was all the rage? Scholastic shareholders certainly do: Now that the film has come and gone, sales of the book trilogy that inspired it have fallen off a cliff, contributing to a wider-than-expected third-quarter loss at the children’s book publisher and distributor. With Scholastic slashing its full-year guidance, investors are the ones covered in blood.