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What: Shares of department store operator Stage Stores (NYSE:SSI) slumped 17% on Thursday after its quarterly results and outlook missed Wall Street's expectations.

So what: Stage Stores shares have dropped sharply in recent months on slumping sales, and today's poor Q3 results -- loss of $10.2 million on a revenue decline of 3.5% -- coupled with downbeat guidance only reinforced that negative trend. In fact, comparable store-sales also slipped 3.5% over the year-ago period while gross margins fell 260 basis points, suggesting that the Houston-based company is a lot more exposed to the beaten-down energy market and declining Mexican peso than investors realize.

Now what: Management now sees full-year EPS of $0.70 to $0.80, down significantly from its prior view of $1.05 to $1.15 and well below the consensus of $0.99. "We will manage our business with discipline around inventory control, implement additional cost reductions and maintain our focus on improving store productivity and driving online sales," said President and CEO Michael Glazer. "Overall, we continue to believe that our strategic initiatives around e-commerce, an increased emphasis on merchandise style and value, a rationalized store base, store remodels, and rejuvenated marketing programs will better position us for sustainable long-term growth." Given the strong oil and gas headwinds working against those initiatives, however, I wouldn't be so quick to buy into that optimism. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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. The Motley Fool has a disclosure policy.