Why Express Scripts, Signet Jewelers, and Dollar Tree Slumped Today

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The stock market eased downward on Thursday, but the day's losses weren't particularly large and showed the relative resiliency in the market. Major market benchmarks fell less than a fifth of a percent, and trading was relatively quiet as investors focused instead on the ongoing Jackson Hole meeting of global central bankers and the potential implications for investors from the actions discussed at that meeting.

Despite the calm mood as the vacation-laden month of August begins to draw to a close, some stocks suffered more precipitous drops. Among the hardest hit were Express Scripts (NASDAQ: ESRX), Signet Jewelers (NYSE: SIG), and Dollar Tree (NASDAQ: DLTR).

Express Scripts gets a scare

Express Scripts fell 6% in the wake of adverse attention to the pharmaceutical industry more broadly. The healthcare industry in general performed badly on Thursday, as drug-maker Mylan responded to allegations that it is overcharging for its popular EpiPen allergy treatment by instead pointing the finger at companies further down the supply chain, such as Express Scripts. In particular, Mylan CEO Heather Bresch noted that several intermediary companies stand between pharmaceutical producers and end users, including pharmacy benefit managers like Express Scripts. With political pressure hitting the entire healthcare industry, investors believe Express Scripts might well suffer adverse effects from the scrutiny.

Signet isn't sitting pretty

Signet Jewelers dropped 13% after releasing a troubling second-quarter financial report. The company behind chain names Jared, Kay Jewelers, and Zales reported a nearly 3% drop in revenue. Same-store sales were down 2.3%, and although the strong dollar weighed on its foreign currency results, it didn't explain the entire amount of the shortfall. Signet said its ongoing integration of Zales is going well, but CEO Mark Light pointed to "market conditions [that] have been challenging particularly in the energy-dependent regions" in which it does business. As a result, Signet cut its guidance for the full year, expecting a drop of 1% to 2.5% in same-store sales and adjusted earnings of $7.25 to $7.55 per share. That was far less than investors had expected, and it points to continued difficulties in the luxury retail market that could last for quite a while longer.

Dollar Tree wilts

Finally, Dollar Tree declined 10%. The dollar-store retailer reported that total revenue jumped by nearly two-thirds, but nearly all of the gains came from the company's acquisition of Family Dollar. Same-store sales climbed by just 1.2%, or less than half the pace in the year-ago quarter. CEO Bob Sasser noted that the company still faces "a challenging retail sales environment," and poor results from Dollar Tree's main rival in the dollar-store space also accentuated the nervousness among investors in the industry. What seems to be occurring is that a renewed battle between dollar stores and discount big-box department store retailers has heated up, and it's unclear whether Dollar Tree and its peers will be able to hold onto the customers it won in past years from its big-box competitors. Until the situation resolves itself, Dollar Tree could find it difficult to make back the ground it has lost.

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