Shares of J.B. Hunt dropped sharply by 13% following the company’s announcement projecting a decline in third-quarter earnings by 5% to 10%. This guidance was shared by Chief Financial Officer Brad Delco during the Morgan Stanley Industrials conference, where he highlighted increased costs impacting the company’s financial performance.

Delco explained that expenditures related to recruiting, advertising, onboarding, training, and sign-on bonuses are expected to rise by approximately $25 million in the third quarter compared to the second. These additional investments are part of J.B. Hunt’s strategy to support future growth despite the near-term earnings pressure.

The company is also grappling with severe fluctuations in fuel prices, experiencing some of the most extreme swings in its history. Record-high diesel prices have created a $10 million headwind, compounding the cost challenges J.B. Hunt currently faces. Delco noted that improving volume levels sequentially is anticipated to help offset some of these financial pressures.

Despite the difficulties, J.B. Hunt is taking steps to repair its profit margins, though Delco acknowledged there remains considerable progress to be made. The stock, which has nearly doubled over the last year, now faces short-term headwinds as the company navigates these operational and market challenges.