Why Floor & Decor Holdings Inc. Stock Fell Today

What happened

Shares of flooring retailer Floor & Decor (NYSE:FND) took a hit Thursday, falling as much as 22.3%. At the time of this writing, shares are down 15%.

The stock's pullback is likely primarily due to Floor & Decor's lower-than-expected revenue and its reduced outlook for the full year. Floor & Decor lowered its outlook for revenue, comparable-store sales growth, and adjusted earnings per share.

Image source: Getty Images.

So what

Floor & Decor reported revenue and non-GAAP EPS of $434.3 million and $0.27, respectively.�On average, analysts were expecting revenue and non-GAAP EPS of about $436 million and $0.25.�These metrics compare to revenue of $334 million and non-GAAP EPS of $0.20 in the year-ago quarter.

CEO Tom Taylor was happy with the quarter's performance, which saw comparable-store sales growth of 11.4% when including approximately 280 basis points of benefit in the year-over-year comparison because of the hurricane in Houston in the year-ago quarter. "Our new stores' first-year sales and profitability have never been higher, and this reinforces our confidence in the 400-store opportunity we see for Floor & Decor," Taylor said.

Now what

Floor & Decor said it expected third-quarter revenue between $427 million and $433 million and non-GAAP EPS between $0.21 and $0.23. On average, analysts were expecting third-quarter revenue of $435 million and non-GAAP EPS of $0.24.

The company's revised full-year guidance calls for revenue between $1.696 billion and $1.710 billion, comps growth of 9% to 10%, and non-GAAP EPS between $0.93 and $0.96. Management previously expected these metrics to come in at $1.705 to $1.735 billion, 9.5% to 11.5%, and $0.93 to $1.01, respectively.

Tanger Factory Outlet Centers Offers an In-Line Quarter

Tanger Factory Outlet Centers Inc.�(NYSE:SKT)�announced solid second-quarter 2018 results on Tuesday after the market closed, detailing flat top-line growth but also continued high occupancy rates, an increased dividend, and a reiteration of full-year guidance.

Let's look at the results of this the retail outlet-center REIT�to get a better idea both of the state of the business and what investors should be watching in the coming quarters.

Image source: Tanger Factory Outlet Centers.

Tanger Factory Outlets results: The raw numbers Metric

Q2 2018

Q2 2018

Year-Over-Year Growth

Revenue	$119.7 million	$119.6 million	0%
Net income available to Tanger common shareholders	$22.7 million	$29.1 million	(22%)
Net income per diluted share	$0.24	$0.31	(22.6%)

Data source: Tanger Factory Outlet Centers.

What happened with Tanger Factory Outlets this quarter? Adjusted funds from operations -- a real-estate industry metric that essentially measures Tanger's cash flow from operations -- declined 0.6% year over year to $59.1 million but grew 1.7% on a per-share basis to $0.60. Trailing-12-month (TTM) blended average rental rates grew 14% on a straight-line basis, and 5.8% on a cash basis, excluding strategic remerchandising costs. Consolidated portfolio occupancy was 95.6%, down from 95.9% last quarter and 96.1% at the same point last year. TTM average tenant sales productivity was flat on a year-over-year basis, at $383 per square foot. Same-center tenant sales increased 1% for the trailing 12 months ended June 30. Tanger commenced 358 leases totaling 1.7 million square feet renewed or released during the quarter, including 296 leases totaling 1.4 million square feet for a term of at least 12 months. Tanger recaptured 68,000 square feet related to bankruptcies and brandwide restructurings among retailers during the quarter.� Tanger repurchased 476,000 common shares for $10 million, or an average price of $21.01 per share. Earlier this month, Tanger raised its annual cash dividend by 2.2% to $1.40 per share, marking its 25th consecutive annual dividend increase. What management had to say

Tanger CEO Steven Tanger stated:

Consumers continue to seek the brands and value that we provide at our centers, as seen in the year-over-year sales increase. Additionally, customers are reacting positively to our enhanced efforts to bring experience and fun to shopping with events such as food truck festivals and family fun nights. We continue to�work hard to maintain our high occupancy, extend shorter-term leases with quality long-term tenants, and pursue new prospects for our centers. As we look ahead, we maintain an unwavering focus on creating shareholder value by procuring the right tenant mix for our consumers, and providing retailers with a quality yet cost-effective distribution channel.

Looking forward

As such, Tanger Factory Outlets reiterated its previous full-year 2018 guidance, which calls for net income per diluted share in the range of $0.95 to $1.01, and funds from operations per share of $2.40 to $2.46.

In the end, there were no big surprises this quarter, and -- after last quarter's relative pain induced by those retailer bankruptcies -- that's a good thing for patient, long-term investors willing to collect Tanger's juicy 5.8% dividend while the company traverses these headwinds.

FirstEnergy (FE) Downgraded to “Hold” at Zacks Investment Research

Zacks Investment Research lowered shares of FirstEnergy (NYSE:FE) from a buy rating to a hold rating in a report published on Wednesday.

According to Zacks, “In a year’s time, shares of FirstEnergy have gained against a decline of its industry.  FirstEnergy is now reporting as a fully regulated utility company and maintained its operating guidance for the year. FirstEnergy’s modernization drive and ambitious Energizing the Future plan is processing well and is aimed at upgrading its transmission capabilities. Inspection and regular maintenance keep its infrastructure ready for providing quality services to customers. FirstEnergy's transformational investment will help strengthen its balance sheet by lowering existing debts.  However, the risks of unplanned outages and stringent regulatory norms are some of the headwinds. Any delay in completion of the ongoing capital project could hurt its operation and profitability, going forward.”

Get FirstEnergy alerts:

Other research analysts have also issued research reports about the company. Morgan Stanley raised their price objective on FirstEnergy from $35.00 to $37.00 and gave the company a buy rating in a research report on Monday, April 16th. ValuEngine lowered FirstEnergy from a buy rating to a hold rating in a research report on Thursday, May 17th. Barclays began coverage on FirstEnergy in a research report on Tuesday, July 10th. They set an equal weight rating and a $39.00 price objective for the company. Mizuho upgraded FirstEnergy from a neutral rating to a buy rating in a research report on Monday, May 7th. Finally, Wells Fargo & Co upgraded FirstEnergy from a market perform rating to an outperform rating and raised their price objective for the company from $27.93 to $34.30 in a research report on Monday, April 30th. Seven equities research analysts have rated the stock with a hold rating and ten have assigned a buy rating to the company. The company presently has an average rating of Buy and an average target price of $36.48.

Shares of FE stock opened at $35.31 on Wednesday. FirstEnergy has a 52-week low of $29.33 and a 52-week high of $37.00. The company has a quick ratio of 0.40, a current ratio of 0.46 and a debt-to-equity ratio of 2.32. The firm has a market capitalization of $16.84 billion, a price-to-earnings ratio of 11.93, a price-to-earnings-growth ratio of 2.47 and a beta of 0.26.

FirstEnergy (NYSE:FE) last issued its quarterly earnings results on Monday, April 23rd. The utilities provider reported $0.67 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.68 by ($0.01). FirstEnergy had a positive return on equity of 22.52% and a negative net margin of 5.33%. The business had revenue of $2.90 billion during the quarter, compared to analysts’ expectations of $3.36 billion. During the same quarter in the previous year, the company posted $0.78 EPS. The company’s quarterly revenue was down 18.4% on a year-over-year basis. analysts expect that FirstEnergy will post 2.38 EPS for the current year.

The business also recently declared a quarterly dividend, which will be paid on Saturday, September 1st. Investors of record on Tuesday, August 7th will be given a $0.36 dividend. The ex-dividend date of this dividend is Monday, August 6th. This represents a $1.44 annualized dividend and a yield of 4.08%. FirstEnergy’s dividend payout ratio is currently 46.91%.

A number of institutional investors and hedge funds have recently added to or reduced their stakes in FE. Raymond James & Associates grew its position in FirstEnergy by 13.9% in the fourth quarter. Raymond James & Associates now owns 117,381 shares of the utilities provider’s stock worth $3,594,000 after acquiring an additional 14,288 shares in the last quarter. Ladenburg Thalmann Financial Services Inc. grew its position in FirstEnergy by 5.1% in the fourth quarter. Ladenburg Thalmann Financial Services Inc. now owns 75,185 shares of the utilities provider’s stock worth $2,302,000 after acquiring an additional 3,657 shares in the last quarter. LPL Financial LLC grew its position in FirstEnergy by 98.4% in the fourth quarter. LPL Financial LLC now owns 38,475 shares of the utilities provider’s stock worth $1,178,000 after acquiring an additional 19,078 shares in the last quarter. Jane Street Group LLC grew its position in FirstEnergy by 23.4% in the fourth quarter. Jane Street Group LLC now owns 30,853 shares of the utilities provider’s stock worth $945,000 after acquiring an additional 5,853 shares in the last quarter. Finally, BB&T Securities LLC grew its position in FirstEnergy by 2.9% in the fourth quarter. BB&T Securities LLC now owns 66,606 shares of the utilities provider’s stock worth $2,039,000 after acquiring an additional 1,874 shares in the last quarter. Institutional investors own 95.06% of the company’s stock.

FirstEnergy Company Profile

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution, Regulated Transmission, and Competitive Energy Services segments. It owns and operates coal-fired, nuclear, hydroelectric, oil and natural gas, wind, and solar power generating facilities.

See Also: Book Value Per Share in Stock Trading

Get a free copy of the Zacks research report on FirstEnergy (FE)

For more information about research offerings from Zacks Investment Research, visit Zacks.com