G&K Services Shares Dropped: What You Need to Know

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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 branded uniform specialist G&K Services (NAS: GKSR) took a beating early today, falling as much as 11% in intraday trading before recovering to a lesser loss.

So what: G&K announced its fiscal first-quarter earnings today, and I have to say it looks like Mr. Market is reacting poorly. For the quarter, G&K reported earnings per share of $0.45 on total revenue of $209.7 million. That was above Wall Street's expectation of $208.4 million in revenue and $0.43 in per-share profit.

Even better, the company maintained its full-year revenue outlook but boosted its profit view, taking its expected earnings-per-share range to $1.80 to $2.05. The midpoint of that range is above current analyst expectations.

So why are shares down today? That's the "wisdom" of the market for you. Good-looking numbers or not, it's tough for almost any stock to be up today in the face of the broad concerns about Greece and the eurozone.

Now what: While G&K's quarter was better than expected, investors aren't completely crazy to be concerned about what's going on in the broader economy. As a business services company, G&K will do best when businesses are doing best, and that will happen when the economy is clicking along. While I think the trading action today is pretty silly, G&K investors will want to keep an eye on the developments in the broader economy.

Want to keep up to date on G&K Services?Add it to your watchlist.

At the time this article was published 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.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye. 

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