Why Cree, SUPERVALU, and Manhattan Associates Slumped Today

By Markets Fool.com

Wednesday was a solid day for the stock market, and major market benchmarks posted modest gains of about a fifth of a percentage point. A new rebound in the energy sector got much of the attention among market participants, with oil's recent bounce from a brief period below $50 per barrel potentially signaling longer-term strength for the energy market. Earnings reports also helped bolster many stocks, but even with a generally positive attitude prevailing in the market today, some stocks nevertheless lost ground. Among the worst performers were Cree (NASDAQ: CREE), SUPERVALU(NYSE: SVU), and Manhattan Associates (NASDAQ: MANH).

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Lighting is Cree's primary business. Image source: Cree.

The lights go out on Cree

Cree fell 11% after the lighting specialist released its most recent quarterly financial results late Tuesday. The company said that its fiscal first-quarter revenue fell 13% from year-ago levels, and adjusted net income fell by nearly a third. CEO Chuck Swoboda highlighted what he saw as solid results from its light, LED products, and Wolfspeed segments, but Cree also said that it expects fiscal second-quarter revenue of between $360 million and $380 million, translating to adjusted earnings of $0.13 to $0.19 per share. That guidance didn't live up to some expectations among investors, and the imminent sale of the Wolfspeed unit will leave Cree even more exposed to the health of the lighting industry going forward.

SUPERVALU looks for direction

SUPERVALU dropped 9% in the wake of releasing its fiscal second-quarter results. The grocery store chain reported net sales declines of 5%, although earnings stayed steady from year-ago levels. With SUPERVALUhaving just reached an agreement to sell off its Save-A-Lot discount business, the company expects to focus more on growing its wholesale business, which currently makes up just less than half of SUPERVALU'soverall revenue. As competitive as the retail grocery business is, wholesaling in the industry could be even harder, with razor-thin profit margins that require maximum corporate efficiency. Still, it's smart for SUPERVALUto look for ways to grow wherever it can, especially as it shrinks in other ways.

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Manhattan sees sales slide

Finally, Manhattan Associates shares declined 10%. The provider of supply chain logistical services posted a solid 7% gain in revenue, and net income climbed by roughly a fifth to set new record levels for the company. Yet sales didn't grow as much as investors had wanted to see, and the guidance that Manhattan gave investors was equally discouraging on the top line. In the long run, Manhattan believes that efforts to improve efficiency and build up business should result in better financial performance, but for today, investors were simply disappointed by the company's failure to deliver not only earnings gains but also larger advances in revenue.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Manhattan Associates. 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.