Bad Golf Game Hurts Dick's, Staples Stock Gets Stapled, and Credit Suisse Dishes $2.8 Billion
Americans must have been busy buying up hoverbikes over clothes, food, and necessities over the past few months, because poor quarterly earnings from major U.S. retailers ticked off investors, who sent the Dow Jones Industrial Average down 138 points Tuesday in disappointment (plus, Credit Suisse had a bad day).
1. Credit Suisse pleads guilty to tax evasion, pays $2.8 billion
It's not Credit "Swiss," it's Credit Suisse. A pompous accent is required when referring to the legendary wealth management/investment bank, which pleaded guilty Tuesday to helping rich Americans avoid taxes. The $2.8 billion fine hurts, but more memorable may be the label as the only major bank successfully charged with a felony in years.
Like a dog burying a bone, Credit Suisse found ways to hide clients' wealth in the protected nooks and crannies of the Swiss Alps, far from where the U.S. government could reach (and tax). The massive tax evasion scheme went on for decades, according to authorities, and no American officials skiing in central Europe were able to do anything about it.
Whose money was CS hiding? That we'll never know. One reason the penalty was so high was that CS continues to refuse to reveal the list of tax evaders it supported (it's about Swiss banking secrecy laws).
The takeaway is that this is the first bank felony charge in decades. The investigation has been known since 2010, so U.S.-listed stocks of Credit Suisse actually rose 1% Tuesday, since the bank didn't receive the dreaded death sentence of losing its U.S. banking license. The U.S. Department of Justice gets a win here with the big penalty, the guilty plea, while not forcing the bank to fall, which could have sparked a crisis.
2. Golf swings hurt Dick's Sporting Goods stock
The Cleveland Cavaliers, the Phoenix Coyotes, the New York Mets -- all teams whose sports records are almost as bad as the quarterly earnings from Dick's Sporting Goods . Shares of Dick's plummeted almost 18% Tuesday, after the chain reported $1.4 billion in revenue last quarter -- a 7.9% rise from last year, but lower than Wall Street's expectations.
The takeaway is that just because your buddy who drops half a paycheck on sleeves of long-range golf balls isn't doing so at Dick's doesn't mean their execs are too worried -- Dick's management was pumped that online sales increased and footwear sales strengthened last quarter. But investors punished the stock, as Dick's was forced to overall lower its earnings expectations for the rest of the year.
3. Staples stock falls on more brutal earnings
The ultimate back-to-school store for way-too-organized people had another disorganized quarter. Shares of Staples dipped 12.6% Tuesday after revenue fell 2.8% and profits dropped 43.5% from the same period last year. Too bad Staples execs couldn't just press the "That Was Easy" button.
The takeaway is that Staples has been whipping out its three-ring binders and restructuring itself. CEO Ron Sargent said the company would save $500 million through the end of 2015 by cutting costs, mostly from closing stores. Although Staples has already closed the book on 16 locations this year, investors sold down the stock in disappointment.
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The article Bad Golf Game Hurts Dick's, Staples Stock Gets Stapled, and Credit Suisse Dishes $2.8 Billion originally appeared on Fool.com.Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Amazon.com and owns shares of Amazon.com and Staples. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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