The dramatic news that hit these 2 iconic stocks hard on Thursday | the motley fool

Thursday brought no relief to stock market investors as attempts throughout the day to see a sustained rally failed to follow through. At the end of the day, the Dow Jones Industrial Average (^ DJI -0.75%), S&P 500 (^GSPC -0.58%)Y Nasdaq Composite (^IXIC 0.00%) They were back in the red and, although the falls were not pronounced, they took the Dow Jones and the S&P to their lowest levels in more than a year.

Data source: Yahoo! Finance.

Seeing some of the biggest gainers of recent years lose ground during the current market pullback has been painful, but it hasn’t been nearly as surprising as seeing some high-profile companies suffer additional losses. On Thursday, shares of harley-davidson (PIG -9.29%) Y under armor (AU -15.76%) (AUA -11.87%) saw big declines as each company made announcements that could have a profound impact on their business going forward.

Image source: Getty Images.

Harley stops shipments

Shares of Harley-Davidson fell more than 9% on Thursday. The motorcycle manufacturer clamped down in response to potentially problematic issues that arose regarding its vehicles.

Harley-Davidson released a statement Thursday morning explaining its decision to suspend all vehicle assembly and shipping for a period of two weeks. According to the motorcycle manufacturer, a third-party supplier informed Harley-Davidson earlier in the week that a regulatory compliance issue had arisen regarding one of the components it produces. Harley-Davidson characterized the decision as “out of an abundance of caution” but did not provide further details about the incident.

The decision sent shares to their lowest levels in more than a year, more than 35% below their highs in May 2021. More importantly, it likely calls into question whether the motorcycle company will be able to meet investor expectations, with shareholders currently expecting to see continued modest earnings growth from Harley-Davidson.

Many value investors have found Harley-Davidson stock’s single-digit earnings multiples attractive. However, if shareholders cannot count on earnings due to potential production problems, the stock could become a value trap.

Under Armor faces a leadership crisis

Meanwhile, shares of Under Armor fell more than 15%. The sports apparel company is going through a leadership transition, and it’s unclear who will take the lead in leading Under Armor through a potential change.

Just after the market closed on Wednesday, Under Armor announced that CEO Patrik Frisk would step down effective June 1. He will be replaced in an interim role by COO Colin Browne, and the board said it had launched a search process both internally and externally. to find a permanent replacement. Frisk will stay on as advisor until early September to smooth the transition.

The decision surprised investors, and if anyone expected founder and board chairman Kevin Plank to weigh in, those hopes were quickly dashed. In a CNBC interview, Plank said twice that he would not return to his old role as chief executive.

After a rocky 2020, Under Armor had seen sales growth return in 2021, but investors remain unconvinced of its turnaround efforts. If the company can find an effective leader to take the next steps to restore the brand’s reputation, then Under Armor could have a lot of potential to bounce back in the years to come.