Why Stein Mart, Inc. Shares Sank
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 Stein Mart, Inc. plunged 10% today after its current-quarter outlook disappointed Wall Street.
So what: Stein Mart's third-quarter results -- breakeven EPS on a revenue increase of 6% -- were pretty much in line with estimates, but downbeat margin guidance for the fourth quarter is triggering concerns over slowing growth going forward. Of course, management cited more normal discount levels than last year and increased e-commerce sales -- which carry lower margins -- for the view, suggesting that its competitive position is at least holding up.
Now what: Management expects its gross profit rate for Q4 to decrease about 100 basis points year over year, resulting in a second-half rate lower than last year's second-half rate. "Our earnings continue to improve as a result of our continued sales momentum," CEO Jay Stein reassured investors. "We have been very focused on refining our brands, pricing and sales execution and the improvements are evident in our results." Of course, with Stein Mart shares still up more than 100% from its 52-week lows, I'd wait for an even bigger pullback before buying into that bullishness.
More reliable ways to wealth
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.
The article Why Stein Mart, Inc. Shares Sank originally appeared on Fool.com.
Fool contributor 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.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.