Anybody who has been following retailer bebe
Last week, bebe shares dropped on its November same-store sales data and its comments on the second quarter. bebe's November comps rose 5.8% compared to a 4.2% increase last year this time, but November's number came in below analysts' expectations for a 7.9% increase in comps. Total sales for the month increased 16.2% to $46.3 million.
Word of a weak beginning to November probably didn't shore up some investors' optimism. Management said that the beginning of November wasn't too strong, but also said that things picked up in the fourth week and Black Friday. However, bebe said that if December pans out like November, second-quarter results will probably come in at the low end of guidance. (You might recall investors weren't too happy about second-quarter guidance attached to bebe's last quarterly announcement back in October.)
This, of course, is nothing new. Early in 2006, sentiment regarding bebe wasn't too optimistic, seeing as how the shares had been just about cut in half (this Fool saw the opportunity), but some very strong, impressive financial data later in the year contributed to the stock's having appreciated 30% over the last 12 months. On the other hand, over the last three months, bebe shares have declined 6%.
I can't help but wonder if recent drops are just short-term angst. bebe seems to compete very competently with competitors like Guess
One thing about short-term angst, though, is that it can add up to long-term opportunity for investors. Buying shares in strong companies on dips, when overall market sentiment mires them down, is a solid long-term strategy -- and bebe has been presenting such opportunities for patient investors, if recent history is any judge.
Walk down memory lane with bebe:
- Last quarter, bebe got burned (and here's the Fool by Numbers).
- Flash back to bebe's hot summer.
- Here's the skinny on bebe as 2006 began.