The stock market crept higher on Wednesday as investors reflected on the one-year anniversary of President Trump's election. When all was said and done, both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) managed to eke out small gains to hover near all-time highs set earlier this week.
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Today's stock market
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Consumer goods stocks extended yesterday's climb, with the Consumer Staples Select Sector SPDR ETF (NYSEMKT: XLP) rising 1.1%. But oil stocks endured a rough session amid fears that Russia's rising crude oil exports could pressure oil futures, sending the SPDR S&P Oil & Gas Exploration and Production ETF (NYSEMKT: XOP) down 1.5%.
As for individual stocks, quarterly earnings news sent shares of Fossil Group (NASDAQ: FOSL) and Take-Two Interactive (NASDAQ: TTWO) in opposite directions.
Fossil Group's grim outlook
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Shares of Fossil plummeted 17.2% today after the fashion and lifestyle accessories company announced weak quarterly results and disappointing guidance.
But Fossil's third-quarter results weren't as bad as Wall Street was expecting. Revenue declined 6.7% year over year to $688.7 million -- above estimates for $650 million -- hurt by broad-based declines in sales of watches (down 3%), leather products (down 19%), and jewelry (down 21%). That translated to a GAAP net loss of $5.4 million, or $0.11 per share, which was well above estimates for a $0.28-per-share loss.
CEO Kosta Kartsotis stated he was "pleased" with the quarter, elaborating that the company continues to make progress against strategic initiatives such as wearable technology devices -- sales of which have tripled so far this year -- despite a challenging retail environment.
"We and our partners are investing heavily in these products," he added, "and we are prepared for the important holiday season."
For the crucial holiday quarter, however, Fossil anticipates revenue will decline in the range of 11% to 3.5% from the same year-ago period, which should translate to earnings ranging from a loss of $0.08 per share to net income of $0.47. Investors were hoping for significantly higher fourth-quarter earnings of $1.31 per share on a much smaller 0.6% revenue decline.
Take-Two's big beat
Take-Two Interactive stock popped 10.6% today after the video game maker posted an impressive quarterly report. For its fiscal second quarter of 2018, Take-Two's GAAP net revenue grew 5.6% year over year to $443.6 million, resulting in a net loss of $2.7 million, or $0.03 per share. The latter was well below investors' expectations for net income of $0.77 per share.
But Take-Two's preferred operational metric of net bookings soared 20% to $577 million, crushing consensus estimates for just $510 million. For that, the company credited the strength of its NBA 2K18 and NBA 2K17 games, the wildly popular Grand Theft Auto franchise, Dragon City and Monster Legends titles, and XCOM 2.
Looking forward to the full 2018 fiscal year, Take-Two now expects net bookings to range from $1.93 billion to $2.03 billion (up from previous guidance for $1.65 billion to $1.75 billion). It also anticipates generating operating cash flow of $300 million this fiscal year, marking a 50% increase from its previous outlook for $200 million.
Finally, CEO Strauss Zelnick teased that fiscal 2019 should be another record year for both net bookings and operating cash flow, helped by the impending launch of Rockstar Games' Red Dead Redemption 2.
"We have a robust development pipeline and are better positioned than ever for long-term growth and margin expansion," Zelnick stated.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Take-Two Interactive. The Motley Fool recommends Fossil Group, Inc. The Motley Fool has a disclosure policy.