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 Stage Stores (NYSE:SSI), a department store operating under the names Bealls, Goody's, Palais Royal, and, of course, Stage, dipped as much as 10% today after it reported disappointing second-quarter earnings results.

So what: For the quarter and the year, Stage Stores missed in every way conceivable. Revenue for the quarter rose just shy of 4% to $395.3 million as comparable-store sales increased 1.7%. Adjusted EPS also rose 11% to $0.41 from $0.37 in the year-ago period. That may sound like a decent quarter, but not compared to Wall Street's expectations for $402.9 million in revenue and $0.46 in EPS. Furthermore, Stage Stores' full-year forecast sent shareholders exiting stage left. The company's new outlook entails full-year revenue of $1.672 billion to $1.69 billion on EPS of $1.30 to $1.40 with a comparable-store sales increase of 0.6% to 1.6%. Previously, Stage had projected revenue of $1.7 billion to $1.73 billion on EPS of $1.45 to $1.55 with comparable-store sales growth of 2% to 4%.

Now what: I'm thoroughly surprised that Stage Stores isn't down even more given the scope of the miss! What's really worrisome about Stage Stores' report is CEO Michael Glazer's comments with regard to its merchandise assortment in its South Hill stores. Anytime a retailer uses the phrase "the alignment of merchandise assortments in the stores is taking longer than expected," it's your cue to run away. If Stage Stores is having trouble figuring out what consumers want, it could be a multiple-quarter issue, pricing issues aside. Even taking into account today's drop, I'd have to suggest passing at these levels.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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