Apparel Retail Is Nuts
MarketFoolery
The Motley Fool
4.7 • 1.7K Ratings
🗓️ 11 December 2018
⏱️ 20 minutes
🧾️ Download transcript
Summary
Stitch Fix falls 30% on weak 2nd-quarter guidance, while Ascena Retail Group pops 25% on better-than-expected comps. What in the world is going on??? Emily Flippen analyzes the apparel retail landscape and shares why she’s not treating Stitch Fix’s drop as a buying opportunity. Plus, we dip into the Fool Mailbag to answer two important questions: What’s the rule-of-thumb when your stock gets bought out? How come ducks don’t get frostbite?
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Transcript
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| 0:00.0 | Thanks to NetSuite by Oracle, the business management software that handles every aspect of your business |
| 0:04.6 | in an easy-to-use cloud platform. |
| 0:07.2 | Get the free guide crushing the five barriers to growth at NetSuite.com slash Fool. |
| 0:14.0 | It's Tuesday, December 11th. |
| 0:17.0 | Welcome to Market Foolery. |
| 0:18.0 | I'm Chris Hill joining me in studio. |
| 0:20.0 | Thank goodness Emily Flipping is here. |
| 0:22.0 | Thank you. Good to see you. |
| 0:35.2 | Peral retail is going crazy today. We're going crazy today. We're gonna dip into the full mail bag, but we're gonna start with the peril retail because this is nuts. We've got two stocks and a spread of nearly 60 percentage points in terms of how they are doing today and it's stitch fix |
| 0:42.3 | and a Cina retail group. |
| 0:45.0 | So we'll get to these one by one. |
| 0:48.0 | Stitch Fix, first quarter profits came in much higher than expected, and nobody seems to care about that at all. |
| 0:56.5 | Their active clients grew 22 percent. |
| 1:01.0 | That was still a little bit lower than analysts were expecting and then compounded by the fact that they come out and say, |
| 1:09.0 | actually, we're not really going to grow that count in the second quarter. |
| 1:13.6 | That appears to be what's hammering the stock, right? |
| 1:17.2 | Because it can't be the profits, and they missed by a hair on the active client growth. |
| 1:22.0 | I mean, what world are we living in that our digital online fashion retailers |
| 1:26.5 | been hammered but the classic, I guess, you know, hard store retail location is doing well? yeah it's stitch fix is not done well |
| 1:35.9 | today to say the least they announced earnings after clothes yesterday and it was exactly |
| 1:40.8 | like you mentioned slower active client growth so ultimately while |
| 1:45.3 | stitch fix has a lot of great things working for it in terms of the data the inventory the |
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