What Happened?
A number of stocks fell in the afternoon session after markets gave up early gains with optimism over progress in US-China trade talks quickly fading as the Trump administration announced plans to raise tariffs on all Chinese imports to well above 100%.
Hopes had been lifted by chatter of constructive negotiations aimed at easing and eventually removing U.S. trade tariffs. But the news confirmed fears of a prolonged trade fight, increasing uncertainty about the direction of economic policy. This left investors grappling with the dual threat of slower growth and higher inflation, both of which could linger if the standoff continues.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Apparel and Accessories company Oxford Industries (NYSE: OXM) fell 12.1%. Is now the time to buy Oxford Industries? Access our full analysis report here, it’s free.
- Footwear company Caleres (NYSE: CAL) fell 8%. Is now the time to buy Caleres? Access our full analysis report here, it’s free.
- Apparel Retailer company Urban Outfitters (NASDAQ: URBN) fell 6.6%. Is now the time to buy Urban Outfitters? Access our full analysis report here, it’s free.
- Footwear company Steven Madden (NASDAQ: SHOO) fell 9.6%. Is now the time to buy Steven Madden? Access our full analysis report here, it’s free.
- Apparel Retailer company Lululemon (NASDAQ: LULU) fell 7.2%. Is now the time to buy Lululemon? Access our full analysis report here, it’s free.
Zooming In On Oxford Industries (OXM)
Oxford Industries’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Oxford Industries and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 10.3% on the news that the company reported weak third-quarter 2024 financial results, with revenue and EPS falling below analysts' expectations. Management blamed the weakness on several issues: surging inflation, distractions caused by U.S. elections and global events that weakened transaction volumes, and two major hurricanes in the U.S., which reduced sales by an estimated $4 million and lowered EPS by $0.14. While management acknowledged that some challenges had eased, some of the improvements might take time to show up in the numbers. Therefore, it was no surprise management gave a weak forecast; its full-year guidance for both revenue and EPS fell short of Wall Street's estimates, underscoring a disappointing quarter.
Oxford Industries is down 41.6% since the beginning of the year, and at $45.90 per share, it is trading 58.5% below its 52-week high of $110.69 from May 2024. Investors who bought $1,000 worth of Oxford Industries’s shares 5 years ago would now be looking at an investment worth $1,174.
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