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Giant Brands that Lost Share Value in 2015
An alarming number of prominent stocks lost a big chunk of their value in 2015, as the tail end of one of the longest bull markets in history began to expose underlying imbalances in the global financial market. Negative earnings growth, weak international demand and a firm dollar were some of the common challenges large publicly-traded corporations faced in 2015. Below we look at nine giant brands that lost share value in the 2015 calendar year.
Wal-Mart (NYSE: WMT)
Retail giant Wal-Mart Stores Inc. had a devastating year and wound up being the worst component of the Dow Jones Industrial Average. Declining earnings and higher costs associated with rising wages were some of the biggest obstacles the company faced.[1] The stock dropped around 27% throughout the course of the year, helping send the Dow Jones to its worst annual performance since 2008.[2]
American Express (NYSE: AXP)
Global credit card company American Express was also one of the Dow’s biggest laggards. The company nosedived after it lost Costco, which was one of its key partners. A strong US dollar also hurt overseas sales and resulted in poor earnings. The share price fell about 26%.[3]
Macy’s (NYSE: M)
Last year wasn’t kind to department store chains. Macy’s stock sputtered 47% on the year, as the combination of unusually mild fall weather and a strong dollar weighed on sales. The company also said that the greenback has scared tourists away,[4] making it difficult for the retailer’s 769 nationwide locations to generate sales growth.
Michael Kors (NYSE: KORS)
Michael Kors had a disastrous year, culminating in a 47% drop in its share price. For the luxury retailer, the freefall actually began the year before amid growing pressures in the retail space. Intense competition has forced the company to make several markdowns, which is good for consumers but bad for profits.[5]
Caterpillar (NYSE: CAT)
China’s economic slowdown has taken its toll on Caterpillar, a global industrial equipment manufacturer located in Peoria, Illinois. China’s economy not only grew at its slowest pace in 25 years,[6] Beijing appears to be eyeing an entirely new growth agenda focused more on consumption and less on manufacturing. Caterpillar’s share value shed 25% last year.[7]
Chevron (NYSE: CVX)
The oil price collapse that began in 2014 took its toll on the energy sector and economies tied to them. Chevron Corporation, America’s second-largest oil producer, had a disastrous 2015. The company was forced to scale back investment plans and reduce exploration activities in the face of rock bottom oil prices. When it was all said and done, Chevron’s share price dropped 15% for the year. Exxon Mobil (NYSE: XOM), America’s biggest oil producer, suffered similar losses of 13%.[8]
Volkswagen (ET3: VOW3)
2015 was a catastrophic year for the German automaker, whose reputation was tarnished after a global emissions cheating scandal was uncovered last September. The scandal, which involved a staggering 11 million automobiles worldwide, forced the resignation of CEO Martin Winterkorn.[9] Share prices took a major beating, even declining 30% over two days. Volkswagen shares managed to recover some of their devastating losses toward the end of the year, but still finished down 21%.
Seaworld (NYSE: SEAS)
Seaworld Entertainment Inc. is an interesting case because its share prices actually rose slightly in 2015. However, the company’s value has been in freefall for the past five years, having declined more than 40% over that period. The brand’s reputation has come under fire for its killer whale and orca breeding programs, forcing it to shift direction earlier this year. Company CEO Joel Manby announced plans for big changes, including shifting away from the Shamu brand, in order to save the company from more public backlash. However, critics aren’t convinced with the company’s change in direction is sincere.[10] The Seaworld brand is clearly drowning fast.
IBM (NYSE: IBM)
International Business Machines Corp enjoyed some momentum last summer before falling flat in the latter half of the year. The company closed down more than 14% for the year thanks to all-around weakness. The company hasn’t been able to excel in new and emerging technologies, where competition and innovation are stiff. IBM shares have rebounded in the early part of 2016, but the outlook remains weak in a highly competitive industry.[11]
Viacom (NASDAQ: VIAB)
Viacom Inc., the American global mass media company involved in cinema and cable TV, had an extremely weak year, as the continued success of Netflix and other over-the-top services raised fears about cord cutting. Viacom, which has a large stake in the fledgling cable TV industry, is especially vulnerable to cord cutting. Combined with declining ad revenue, the company’s outlook isn’t too rosy. Viacom’s share price declined 48% in 2015.[12]
[1] Chris Lange (December 23, 2015). “The 7 Worst Performing Dow Stocks of 2015.” 24/7 Wall St.
[2] Evelyn Cheng (December 31, 2015). “Stocks close lower; worst year for S&P 500, Dow since 2008.” CNBC.
[3] Chris Lange (December 23, 2015). “The 7 Worst Performing Dow Stocks of 2015.” 24/7 Wall St.
[4] Matt Egan (December 22, 2015). “These are the worst stocks of 2015.” CNN Money.
[5] Matt Egan (December 22, 2015). “These are the worst stocks of 2015.” CNN Money.
[6] Mark Magnier (January 19, 2016). “China’s Economic Growth in 2015 Is Slowest in 25 Years.” The Wall Street Journal.
[7] Chris Lange (December 23, 2015). “The 7 Worst Performing Dow Stocks of 2015.” 24/7 Wall St.
[8] Chris Lange (December 23, 2015). “The 7 Worst Performing Dow Stocks of 2015.” 24/7 Wall St.
[9] Paul R. La Monica (September 25, 2015). “Volkswagen has plunged 50%. Will it ever recover?” CNN Money.
[10] W. Scott Bailey (March 17, 2016). “Can Sea World make a big splash without Shamu, its start attraction?” Biz Journals.
[11] Chris Lange (December 23, 2015). “The 7 Worst Performing Dow Stocks of 2015.” 24/7 Wall St.
[12] Matt Egan (December 22, 2015). “These are the worst stocks of 2015.” CNN Money.
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