The Jones Group Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fashionista The Jones Group (NYSE: JNY  ) tanked as much as 24% today as investors fled the stock following a worse-than-expected third-quarter earnings report.

So What: Jones has been struggling in recent years under the weight of strapped customers and hefty goodwill writedowns. While the company appears to be getting its footing back to some extent -- sales were up 19% from the prior year -- rising costs dragged down margins across the board. Adjusting for one-time costs such as retail store closures and acquisitions, the company reported $0.54 in per-share earnings, well short of analysts' $0.62 expectation.

Now What: Just yesterday we watched shares of Coach (NYSE: COH  ) head for the rafters after it reported particularly strong third-quarter results, so it would seem that the fashion consumer may be coming out of hibernation. At this point, investors are showing almost no confidence in Jones Group, as shares currently change hands at less than 10 times trailing earnings. That's certainly a tempting price, but management still needs to show that it's back on a sustainable growth path, and that means both on the top and bottom line.

Interested in more info on Jones Group? Add it to your watchlist here by clicking here.

Coach is a Motley Fool Stock Advisor choice. The Fool owns shares of Coach. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1347025, ~/Articles/ArticleHandler.aspx, 10/31/2014 1:01:09 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement