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Why NVIDIA, Dillard's, and Fossil Group Slumped Today

Friday was a solid day for the stock market, which enjoyed a slight recovery from more substantial losses over the preceding trading sessions during the week. Investors seemed generally to be at least a bit more comfortable with the geopolitical situation globally, and some favorable news on the earnings front supported the idea that the U.S. economy will be able to keep growing even if tensions rise outside the financial markets. Yet some companies faced their own specific obstacles today, and NVIDIA (NASDAQ: NVDA), Dillard's (NYSE: DDS), and Fossil Group (NASDAQ: FOSL) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

NVIDIA can't clear a big hurdle

Shares of NVIDIA dropped 5% after the graphics chip specialist didn't do well enough in its second-quarter financial results to satisfy growth-hungry investors. At first glance, NVIDIA's performance looked stellar, with revenue climbing by more than half and net income more than doubling from year-ago levels. Yet the stock has soared roughly 150% over the past year, and part of what was driving those gains were even higher hopes about the chipmaker's prospects. Going forward, NVIDIA still has a lot going for it, including gains on initiatives to tap into key themes like data centers and artificial intelligence. Shareholders might have to get used to the idea that even great results won't always push the stock higher after it having seen such extensive gains already.

Image source: NVIDIA.

Dillard's misses the retail rebound

Dillard's stock finished down 6% in the wake of the company's second-quarter financial report. The department store retailer reported a loss for the quarter, facing headwinds in the form of a 1% drop in comparable-store sales and an inflated level of inventory that it had to liquidate at discounted prices during the quarter. Investors should also be aware that Dillard's stock is going through some unusual fluctuations, perhaps because of extensive short-selling activity that in turn has led to short-term squeezes and big share-price gains. Fundamentally, Dillard's faces many of the same challenges as its retail peers, and it hasn't consistently been able to address them as well as some of its rivals have.

Fossil keeps slipping

Finally, shares of Fossil Group lost another 7%, adding to its poor performance earlier in the week. The watchmaker reported extremely weak results for its second quarter, including a 13% overall decline in revenue on an 11% drop in retail comparable sales. Fossil is hopeful for the long-term prospects of its connected wearables business, but the retailer is seeing demand dry up for its traditional lines of watches, as well as accessories like leather and jewelry. Without quick action to mount a better turnaround, Fossil has some investors worried about more dire consequences for the watchmaker's long-term prospects.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool recommends Fossil Group, Inc. The Motley Fool has a disclosure policy.