The stock market dropped sharply on Friday, giving up some of its gains from earlier in the week as investors had renewed fears about the state of the global economy. A reading on manufacturing activity in Germany cast a pall over the entire European market, and interest rates in the U.S. began to exhibit behavior that often precedes the beginning of economic recessions. Yet even with most indexes down around 2% or more, some stocks managed to gain ground. Hibbett Sports (NASDAQ:HIBB), Papa John's International (NASDAQ:PZZA), and Red Robin Gourmet Burgers (NASDAQ:RRGB) were among the top performers. Here's why they did so well.
Hibbett wins the earnings game
Shares of Hibbett Sports soared 20% after the sporting goods retailer announced its fourth-quarter financial results. The company said that revenue for the quarter rose 15% from the year-earlier period after adjusting for calendar impacts, with solid contributions from its legacy stores as well as its newly acquired City Gear locations. Earnings were also strong, and CEO Jeff Rosenthal celebrated a 60% jump in online sales as a move in the right direction for the retailer. Hibbett also said that Rosenthal will give way to a new CEO in the near future, and investors took news of coming strategic store closures as a sign that the company is aiming to make a full turnaround over the next year.
Can Shaq save Papa John's?
Pizza specialist Papa John's International saw its stock rise 6% following news that NBA superstar Shaquille O'Neal will join its board of directors and become a brand ambassador for the business. O'Neal will also invest in several restaurant locations in the Atlanta area, building on the former basketball player's business empire, which already includes a Las Vegas-based fast-casual restaurant called Big Chicken and several Krispy Kreme franchises. Shareholders hope that O'Neal's arrival will put more difficult challenges behind Papa John's, especially with founder John Schnatter having withdrawn litigation against the company recently. Shaq's arrival will generate plenty of short-term publicity, but it'll take time to see if it also results in long-term growth for Papa John's.
Red Robin gets some strategic help
Finally, shares of Red Robin Gourmet Burgers rose over 4%. The burger chain has gone through tough times recently, with revenue and earnings having declined in its most recent quarter compared to year-earlier levels. Yet Red Robin isn't standing still, and investors seemed to have a delayed positive reaction to news yesterday that the restaurant chain had brought on investment banking company Cypress Group to offer strategic advice on how best to implement its refranchising efforts. Red Robin's locations are primarily company-owned, but it recently announced plans to convert 100 existing restaurants to franchise operations. Shareholders hope that Red Robin will then be free to concentrate on improving its customer experience, decreasing wait times, and integrating new technology to boost overall performance.