S&P 500 Losers: From Lululemon To MGM — What Went Wrong?

Core Insights - The S&P 500 remained relatively stable, decreasing by 0.12% during the week ending September 5, despite significant declines in several notable stocks due to various factors including earnings outlook revisions and regulatory risks [2][3] Company-Specific Summaries - Lululemon (NASDAQ: LULU): The stock fell 17% after management cut full-year revenue and EPS guidance, despite beating quarterly earnings estimates. U.S. same-store sales decreased by 4%, while international sales grew by 17% in China and 12% elsewhere. The stock now trades at 1.8x trailing revenues, significantly below its five-year average P/S ratio of 6.9, indicating investor caution due to domestic softness [4] - Kenvue (NYSE: KVUE): The stock dropped 10% amid concerns that the U.S. Health and Human Services Secretary may link its Tylenol brand to autism risk for pregnant women. Tylenol accounts for nearly 10% of Kenvue's sales, and the stock is currently valued at 2.6x trailing revenues, reflecting uncertainty in the legal landscape for this Johnson & Johnson spin-off [5] - TransDigm (NYSE: TDG): The stock declined by 9% following ratings downgrades due to risks associated with normalization in its profitable aftermarket aerospace business. Despite the decline, TDG trades at a premium of 9.5x trailing revenues, above its five-year average P/S of 7.9, indicating confidence in long-term growth [7] - Constellation Brands (NYSE: STZ): The stock fell 8% after projecting lower fiscal 2026 sales and earnings due to weakening beer demand in the Hispanic American market. Currently priced at $150 per share, STZ trades at 2.7x trailing revenues, well below its five-year average of 4.7x, raising concerns about a potential value trap [8] - MGM Resorts (NYSE: MGM): The stock lost 8% following the announcement of COO Corey Sanders' exit amid a decline in Las Vegas visitation, which has seen a 12% year-over-year drop in July. The stock trades at 0.6x trailing sales, significantly below its five-year average of 1.6x, with continued margin pressures and demand softness justifying the discounted valuation [9]