What Happened?

A number of stocks fell in the afternoon session after the latest U.S. consumer confidence report revealed underlying weakness despite a headline increase, raising concerns about future spending. 

While the Conference Board's headline Consumer Confidence Index rose to 97.2 in July, the details painted a more cautious picture for investors. The Present Situation Index, a measure of consumers' assessment of current business and labor market conditions, actually fell. More telling for the sector, the report showed a decline in buying intentions for major discretionary items such as homes, cars, and most appliances. This combination of factors signals potential weakness in future consumer spending, casting a shadow over companies that rely on non-essential purchases.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Apparel and Accessories company ThredUp (NASDAQ: TDUP) fell 3.2%. Is now the time to buy ThredUp? Access our full analysis report here, it’s free.
• Gaming Solutions company PlayStudios (NASDAQ: MYPS) fell 3.2%. Is now the time to buy PlayStudios? Access our full analysis report here, it’s free.
• Footwear company Genesco (NYSE: GCO) fell 4%. Is now the time to buy Genesco? Access our full analysis report here, it’s free.
• Apparel and Accessories company VF Corp (NYSE: VFC) fell 3.2%. Is now the time to buy VF Corp? Access our full analysis report here, it’s free.
• Apparel and Accessories company Under Armour (NYSE: UAA) fell 3.8%. Is now the time to buy Under Armour? Access our full analysis report here, it’s free.

Zooming In On Genesco (GCO)

Genesco’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 11 months ago when the stock dropped 17% on the news that the company reported weak second-quarter 2024 results. Citing macro uncertainties and a tough operating environment, management provided guidance that was below expectations and calls for a revenue decline in the coming year, which is never a good sign for any business. 

On the other hand, Genesco beat analysts' revenue and EPS expectations this quarter. Overall, the quarter was fine, but that is the past. The future, as indicated by guidance, is uncertain and challenging, and this dynamic is weighing on shares.

Genesco is down 41.9% since the beginning of the year, and at $24.31 per share, it is trading 44.7% below its 52-week high of $43.99 from December 2024. Investors who bought $1,000 worth of Genesco’s shares 5 years ago would now be looking at an investment worth $1,404.

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