Briggs & Stratton Corporation (NYSE:BGG) shares tumbled 47% today, signaling a 44-year low for BGG stock.
Worst Day for BGG Stock Since 1975
The gasoline engine and outdoor power equipment manufacturer reported a surprise quarterly loss and cut its earnings guidance and dividend. In an attempt to consolidate costs, the company also announced it would be closing a Kentucky-based plant, which employs 630 people. The company said it will offer employees in Kentucky the opportunity to relocate to the company’s other plants, which are located in Alabama, Georgia, Missouri, and New York. Today’s trading represents the worst day for BGG stock since April 1975.
In its fiscal fourth-quarter results, Briggs & Stratton reported a wider loss of $18.5 million, or 45 cents a share compared with $11.8 million, or 29 cents a share for the same period last year. Todd Teske, CEO of BGG, said in a conference call following the announcement “During the year, we encountered weather-related headwinds in all three major lawn and garden markets around the globe. This challenging and highly unusual environment was coupled with the Sears bankruptcy and several brand transitions.”
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BGG also blamed operational inefficiencies for the losses, which may have informed the company’s decision to shut down its Kentucky plant as it seeks to implement a business optimization program. Investors in BGG stock will be hoping that this program adequately addresses the internal issues at the company, as the company also works on a debt refinancing plan, which it hopes to complete by the end of the year.
What Next for BGG Stock?
While today’s trading clearly shows investors putting as much distance between themselves and BGG stock as possible, this could be good news for speculators with an appetite for risk. The company has announced a series of plans and initiatives to drive growth in the future, and with BGG stock nearly halving in price overnight, perhaps this could be a good time to pick up some shares should these initiatives bear fruit.
What do you think?
Featured image: DepositPhotos © bernjuer
