Top Losers in the Consumer Sector: October 2–6, 2017



Top losers in the consumer sector

On October 6, 2017, there were speculations that Amazon (AMZN) plans to mark its entry into online drug sales. CNBC reported that Amazon plans to make a decision before Thanksgiving about selling prescription drugs online. After the news, drug companies CVS Health (CVS) and Walgreens Boots Alliance (WBA) fell 5.4% and 5.2% last week.

After the market closed on October 5, 2017, Costco Wholesale (COST) announced its fiscal 4Q17 results and September sales results. The company posted revenues of $42.3 billion in fiscal 4Q17—an increase of 15.7% YoY (year-over-year). Its revenue surpassed estimates by 1.8%. The company’s EPS rose 17.5% to $2.08 in fiscal 4Q17—compared to its fiscal 4Q16 EPS of $1.77. The EPS surpassed estimates by 3.0%. For September, the company reported net sales of $12.4 billion—an increase of 12.1% compared to the same period the previous year. Despite the earnings and revenue beat, Costco shares fell 4.4% last week due to a drop in its fiscal 4Q17 gross margin. The company mentioned that its initiatives to drive sales and enhance member loyalty and satisfaction caused the gross margin to fall by 15 basis points.

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Nordstrom (JWN) fell 6.0% last week after the New York Post reported that the company’s talks of going private might be uncertain. Two sources close to the talks revealed that Nordstrom is having a hard time acquiring financing for the deal after Toy “R” Us filed for bankruptcy. After the news, other retailers like Kohl’s (KSS) and Macy’s (M) fell 5.1% and 4.6% last week.

Brokerage firms downgraded Walgreen’s and Advance Auto Parts (AAP) stock, which caused the fall last week.

PepsiCo (PEP) reported its fiscal 3Q17 results on October 4, 2017, before the market opened. The company posted EPS (earnings per share) of $1.48 in fiscal 3Q17—an increase of 5.7% compared to EPS of $1.40 in fiscal 3Q16. The EPS surpassed the estimate of $1.43. The company reported revenues of $16.2 billion in fiscal 3Q17—an increase of 1.3% compared to fiscal 3Q16. The revenue missed the estimates by 0.43%. Pepsico stock fell 0.9% last week.


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