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.
