Why Fossil Group, Mattel, and National Beverage Slumped Today

MarketsMotley Fool

Wall Street was in an exceptionally good mood on Friday, as favorable news on the employment front helped send major benchmarks up nearly 2%. The economy created 313,000 nonfarm jobs during the month of February, according to the latest report from the Department of Labor, and the unemployment rate remained at a low 4.1%. Even better, those who had feared that strong jobs would cause labor inflation were pleased with a weak rise in wage levels for workers. That opened the door for potentially more dovish monetary policy from the Federal Reserve in 2018.

Yet some companies missed out on the rally. Fossil Group (NASDAQ: FOSL), Mattel (NASDAQ: MAT), and National Beverage (NASDAQ: FIZZ) were among the worst performers on the day. Here's why they did so poorly.

Continue Reading Below

Keeping watch over Fossil

Shares of Fossil Group dropped almost 8% in the latest bout of volatility for the beleaguered watchmaker. Fossil stock has been extremely turbulent recently, with a nearly 70% rise in February stemming from the company's strong fourth-quarter performance. Bullish investors are enthusiastic about Fossil's strategic plans to shift more toward wearable devices, but extremely high short interest has come from more negative investors thinking that the high-fashion watchmaker won't be able to adapt to changing consumer preferences in an extremely competitive market. Today's move is a setback for shareholders, but the stock is still up by nearly half so far in 2018.

Mattel deals with retail fallout

Mattel stock fell 7% after investors heard news that one of its key customers might well cease to exist as a brick-and-mortar retailer. Toys R Us sought bankruptcy protection last September, but it hasn't yet been able to come up with a reorganization plan with creditors to maintain its normal operations, and reports are now surfacing that suggest that Toys R Us might instead choose simply to liquidate its U.S. store network. Mattel relies on the toy retailer for a significant part of its revenue, and even though Toys R Us might aim to shift to an e-commerce model, that wouldn't necessarily translate to continued sales for Mattel. The hit would be just another blow in a long line of challenges that the toymaker has faced, and investors are growing concerned about just how much Mattel can take.

National Beverage goes flat

Finally, shares of National Beverage fizzled, finishing down 8%. The maker of Shasta cola and LaCroix sparkling water reported fiscal third-quarter results that included a 16% rise in sales, but investors were disappointed that the beverage company wasn't able to sustain greater top-line growth. CEO Nick Caporella blamed severe weather for disrupting deliveries temporarily in some of National Beverage's markets, potentially holding back revenue. Today's decline reflects the high expectations that investors have for the beverage maker, but fundamental performance prospects still look good for National Beverage for 2018 and beyond.

Offer from The Motley Fool: The 10 best stocks to buy nowMotley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*

Tom and David just revealed their ten top stock picks for investors to buy right now.

Click here to get access to the full list!

*Stock Advisor returns as of March 5, 2018.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool is short shares of Mattel. The Motley Fool recommends Fossil Group. The Motley Fool has a disclosure policy.