Consumer stocks extended their declines this afternoon, with the SPDR Consumer Staples Select Sector ETF (XLP) dropping 1.2% and the SPDR Consumer Discretionary Select Sector ETF (XLY) retreating 1.4%, reversing a small midday advance.
In company news, Coffee Holding (JVA) added 4.3% after the coffee roaster Friday disclosed plans to merge with privately Delta Corp Holdings, with Delta investors splitting $625 million in Coffee Holding ordinary shares with an implied value of $5.50 each. After the deal closes in early 2023, current Delta investors will own 95.2% of the combined companies.
Nike (NKE) slumped over 12% after late Thursday reported a 20% decline in fiscal Q1 earnings compared with year-ago levels, dropping to $0.93 per share but still beating the Capital IQ consensus by $0.01. The athletic apparel company also said it expects gross margin for the current quarter to drop at least 350 basis points from a year ago and that the rising value of the US dollar against other currencies will likely erode reported FY23 sales by as much as $4 billion.
Rent-A-Center (RCII) slid more than 21% after the specialty retailer lowered its Q3 profit outlook, now expecting to earn between $0.85 to $0.95 per share, down from its prior forecast of $1.05 to $1.25 and trailing the revised Capital IQ consensus of $1.03. It also pared the top end of its Q3 sales guidance and named former Santander Consumer USA chief financial officer Fahmi Karam to be its new CFO on Oct. 31, succeeding Maureen Short, who left earlier this week.
Aterian (ATER) fell 37% after the home- and kitchen-wares seller priced a $20.2 million direct offering of more than 10.5 million common shares or pre-funded warrants at $1.90 apiece, or 3.6% under Thursday's closing price. Investors also received an equal number of five-year warrants to buy another share exercisable six months after closing at $2 per share.