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 apparel retailer Guess?
So what: While Guess' fourth-quarter profit rose 19%, its North American same-store sales managed to fall 1.1% on particularly weak customer traffic. Even worse, management doesn't expect that trend to reverse anytime soon, offering first-quarter and full-year guidance that came in well below Wall Street expectations.
Now what: I'd look into today's double-digit plunge as a possible entry point. While Guess' North American retail business is a big weak spot, Europe and Asia, which saw fourth-quarter sales growth of 32% and 23%, respectively, continue to provide attractive long-term upside. More importantly, with Guess continuing to sport a rock-solid balance sheet and just having expanded its stock buyback program to $250 million, the downside seems well-protected.
Interested in more info on Guess? Add it to your watchlist.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool Options has recommended writing puts on Guess?, and the Fool owns shares of it. Try any of our Foolish newsletter services free for 30 days.
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