What Happened?

A number of stocks fell in the morning session after crude oil prices surged toward $120 a barrel amid escalating geopolitical conflict in the Middle East. 

The spike in crude prices follows an intensification of the Iran war, stoking fears of production and shipping disruptions. These concerns rattled global markets. For the consumer discretionary sector, which includes companies that sell non-essential goods and services, the impact is significant. Higher oil prices can lead to a new wave of inflation, squeezing household budgets and reducing the disposable income available for discretionary spending. This threatens to soften consumer demand, creating headwinds for the sector.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Boat & Marine Retailer company OneWater (NASDAQ: ONEW) fell 6%. Is now the time to buy OneWater? Access our full analysis report here, it’s free.
• Department Store company Kohl's (NYSE: KSS) fell 5.3%. Is now the time to buy Kohl's? Access our full analysis report here, it’s free.
• Grocery Store company Grocery Outlet (NASDAQ: GO) fell 12.6%. Is now the time to buy Grocery Outlet? Access our full analysis report here, it’s free.
• Home Furniture Retailer company Sleep Number (NASDAQ: SNBR) fell 6.6%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
• Footwear Retailer company Designer Brands (NYSE: DBI) fell 7.3%. Is now the time to buy Designer Brands? Access our full analysis report here, it’s free.

Zooming In On Grocery Outlet (GO)

Grocery Outlet’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for Grocery Outlet and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 4 days ago when the stock dropped 28% on the news that the company reported disappointing fourth-quarter 2025 financial results and provided a weak forecast for 2026. 

The discount grocer's adjusted earnings of $0.19 per share and sales of $1.22 billion both fell short of analyst expectations. Additionally, a key performance metric, same-store sales, was flat year on year. The outlook for the upcoming year was particularly concerning for investors. The company's full-year revenue guidance of $4.66 billion at the midpoint was 5.4% below estimates, and its adjusted earnings per share guidance of $0.50 at the midpoint missed analyst projections by a substantial 38.6%. Overall, the combination of missed Q4 targets and a sharply lower-than-expected forecast for the year ahead drove negative investor sentiment.

Grocery Outlet is down 43.9% since the beginning of the year, and at $5.71 per share, it is trading 69.4% below its 52-week high of $18.66 from September 2025. Investors who bought $1,000 worth of Grocery Outlet’s shares 5 years ago would now be looking at an investment worth $159.25.

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