Stocks endured another volatile session on Wednesday, with major benchmarks swinging between positive and negative territory several times before closing down on the day. The Nasdaq Composite set the pace for today's decliners, falling 0.9%, while the S&P 500 fell a more modest 0.3%, and the Dow Jones Industrial Average just barely edged into negative territory.
Still, several individual stocks fared much better than the rest. Here's why lululemon athletica (NASDAQ: LULU), Macy's (NYSE: M), and LaSalle Hotel Properties (NYSE: LHO) delivered outsize gains for investors today.
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Lululemon's earnings surprise
Shares of Lululemon Athletica soared 9.2% after the yoga apparel specialist announced stronger-than-expected fiscal fourth-quarter results. Quarterly revenue climbed 18% year over year to $928.8 million, and translated to 33% growth in adjusted earnings per diluted share to $1.33. Analysts, on average, were only anticipating adjusted earnings of $1.27 per share on sales of $911.4 million.
Driving Lululemon's top line was a 12% increase in total comparable sales, including 2% growth in comparable-store sales and a whopping 44% increase in direct-to-consumer revenue. Glenn Murphy, Lululemon's executive chairman of the board, credited the continued execution of the company's global growth strategies for its relative outperformance during the quarter.
If that wasn't enough, Lululemon expects full-year 2018 revenue in the range of $2.985 billion to $3.022 billion, good growth of 12.7% to 14.1% from 2017, which should result in full-year earnings of $3.00 to $3.09 per share. Here again, the midpoints of those ranges were comfortably above most investors' expectations for fiscal 2018 earnings of $3.02 per share on revenue of $2.94 billion.
Amazon's pain is Macy's gain
Macy's stock climbed 4.1% following a report that President Trump is weighing his options to curtail the market leadership of online retail behemoth Amazon.com (NASDAQ: AMZN).
Amazon shares fell 4.4% today after sources speaking to Axios revealed that Donald Trump is "[o]bsessed" with the notion that Amazon is harming traditional retailers while receiving a "free ride" from taxpayers and unjustified favorable treatment from the U.S. Postal Service. And despite being informed in "multiple meetings" that the Postal Service "actually makes a ton of money from Amazon," the sources say, Trump is still considering options to go after Amazon with antitrust or competition laws.
Of course, department store chains like Macy's would seem to be obvious beneficiaries of such action. But that's also not to say Macy's can't compete without the president's help. The company recently outlined plans to fend off Amazon through the modernization of its business, with initiatives including mobile checkout options, the rollout of virtual-reality shopping experiences, and increasing its focus on exclusive private labels.
LaSalle plays hardball
Finally, shares of LaSalle Hotel Properties soared 15.3% today after the U.S. hotel chain rejected an unsolicited acquisition bid from rival Pebblebrook Hotel Trust (NYSE: PEB).
Earlier this month, Pebblebrook offered to purchase all outstanding shares of LaSalle in an all-stock transaction for 0.8655 common shares of Pebblebrook per common share of LaSalle -- a deal that values LaSalle at $29.95 per share, or a premium of roughly 22.8% from yesterday's close. After consulting with its financial and legal advisors, however, LaSalle's board determined that the offer was "insufficient" and not in the best interests of shareholders. LaSalle also worried that Pebblebrook was taking advantage of its own "overly-optimistic growth targets," which may have artificially inflated the latter's stock price.
Pebblebrook, for its part, promptly replied that it is "prepared to engage in discussions around" the price and mix of the consideration, noting that the merger would create an industry-leading business with a "best-in-class" portfolio of upscale and luxury hotel properties in the United States.
All told, it's easy to see why LaSalle shares popped given the prospect of an even juicier acquisition premium still on the table.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Steve Symington owns shares of Lululemon Athletica. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Lululemon Athletica and Pebblebrook Hotel Trust. The Motley Fool has a disclosure policy.