Liz Claiborne Shares Dropped: What You Need to Know

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 clothing maker Liz Claiborne (NYS: LIZ) plunged 13% today after the company cut its 2012 guidance and announced that CFO Andrew Warren would leave by mutual agreement in March.

So what: Wall Street has applauded several of management's moves in recent months -- including closing several brands and even changing the company name -- but today's profit warning serves as a reminder of Liz Claiborne's still-shaky competitive position. Of course, when you also announce the departure of your CFO, it's tough for investors not to think very worrisome thoughts.

Now what: Looking ahead, management now sees full-year 2012 EBITDA of $125 million to $140 million, down from its previous view of $130 million to $150 million. "This new range appropriately reflects a more cautious view of how much cost reduction we can achieve in 2012 versus 2013 as well as a more conservative outlook for the wholesale channel at both Juicy Couture and Lucky Brand," CEO William McComb said. With the shares still up a whopping 70% over just the past three months, however, I'd wait for more of a pullback before getting involved.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies 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 Fool's disclosure policy always gets a perfect score.

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