Why Ralph Lauren, Healthways, and Clean Energy Fuels Jumped Today

By Markets Fool.com


Image source: Ralph Lauren.

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The stock market eased lower on Wednesday, pulling away from the record highs it has set in recent days. Some market commentators blamed weakness in the oil market as a cause for the market's pullback, but financial stocks also performed poorly as investors seemed ready for a pause after the big gains for the sector in recent weeks. Major market benchmarks held their losses to less than half a percent, however, and some stocks managed to post significant gains despite the downbeat mood. Among them were Ralph Lauren (NYSE: RL), Healthways (NASDAQ: HWAY), and Clean Energy Fuels (NASDAQ: CLNE).

Ralph Lauren makes profits fashionable again

Ralph Lauren jumped 8% after the upscale retailer gave investors more than they expected in its fiscal first-quarter financial report. Sales at Ralph Lauren fell 4% on a 6% slide in comparable-store sales, and the company noted that lower retail traffic hurt the company's results. However, the company's performance internationally was solid, and its restructuring efforts are already paying off in improved operating margin. Ralph Lauren is returning to its core brand roots, and its Polo brand in particular has gained exposure from major sporting events like the Rio Olympics and the Wimbledon tennis tournament. Guidance from the company suggests that further declines in sales are likely for the remainder of the fiscal year, but Ralph Lauren is taking steps to ensure its long-term survival and improve its chances for success down the road.

Healthways gets a clean bill of financial health

Healthways soared 18% despite reporting a loss in its second-quarter financial report Tuesday afternoon. The provider of wellness and well-being improvement services reported a 10% rise in sales, and earnings from continuing operations almost doubled from year-ago levels. The company reported a GAAP loss because of its Total Population Health Services unit, but the sale of that division at the end of July should ensure that the company will be able to refocus on its core business going forward. Although Healthways intends to spend money on a reorganization of its corporate support infrastructure that could have substantial short-term costs, the company expects that long-term savings will more than justify the investment. CEO Donato Tramuto believes that Healthways' network solutions business will be able to lead the company to sustained profitability, and investors appear to agree with the move.

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Clean Energy powers forward

Finally, Clean Energy Fuels climbed 15%. The provider of natural-gas fueling infrastructure solutions reported an 11% increase in delivery volumes that resulted in revenue gains of nearly a quarter from year-ago levels, and Clean Energy also reversed year-ago losses with modest profits. CEO Andrew Littlefair called out Clean Energy's Redeem renewable natural gas as enhancing the beneficial environmental impact of its alternative fuel offerings over gasoline and diesel fuel. Admittedly, some worry about the move among some government entities to move beyond natural gas toward renewables like wind and solar, but natural-gas advocates have long seen the cleaner-burning fossil fuel as a bridge toward renewables. As long as corporate customers tap into the benefits of converting their trucking fleets to natural-gas powered engines, Clean Energy will have a reliable market that it can expect to grow over time.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Clean Energy Fuels. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.