Setting aside the macro stuff and turning to micro, there are 3 reasons for the drop that I can discern.
1. Retirement of CEO and now new CEO.
2. No permanent CFO
3. Build up in inventories.
1. Creates uncertainly. Didn't help that new CEO was a bit clumsy on the call. I don't place a lot of weight on this--new CEO is just fine.
2. Creates uncertainty. I don't place a lot of weight on this--the team is strong
3. The company had a good explanation. Comp Q was negative. Furthermore, the build up in inventory was planned and TG sales were strong.
Goldman Sachs resumes coverage on Francesca's Holdings (NASDAQ: FRAN) with a Neutral. PT $31.00.
"FRAN is an early-stage, disruptive specialty model with exceptional square footage opportunity (20%-plus annually) at best-in-class returns," the analyst comments. "We are constructive on shares in the medium term but are Neutral today as we see better near-term upside in TLYS and also await more visibility on the CEO/CFO transition."
A viewer asked Jim Cramer last night if he knew what was going on with FRAN? The viewer mentioned good fundamentals, 70 stores opening next years, beat analysts expectations.... all of which did not surprise Cramer because he was not quick to dismiss FRAN (i.e. recommend selling or KORS, LULU, etc.), but he did say he would come back with an answer later.
I look at this stock drop as a golden buying opportunity and bought more shares yesterday.
Folks there are many that need to cash for the Tax reasons as well as shorts are at it.. There are over 12 million shorts on this stock.. The last support is at 22 in which we almost met the bottom.. It is in my opinion the short squeeze is in order.. We should see over 35 dollars soon! Before expiration date we shall see shorts are to cover.. The only thing I don't like is the P/E rate of 30!! Now, let's see if this is going to last long.. Fundamentally this is Warren Buffet type of stock.. Buy now or next time find the same prices is the next earning when the shorts go to work again!!