Qualitative analysis of stocks performance
There are various external factors that affected Bebe’s stock price throughout the past 5 years. In 2006 when the housing boom collapsed in the US, Bebe’s stock price plummeted. The collapse affected a large portion of the publicly traded companies on the stock market. As the value of American homes declined, disposable income also goes down. This leads to unemployment rates rising inversely with the stock price declining, see chart below. |
Average American homeowners are going to start spending less money; Saving money for essential things like food and shelter. The retail industry was greatly affected by this. Bebe, being a rather luxurious clothing store, especially felt the hardships of the collapse. Even when people were buying clothing it was from cheaper stores like Wal-Mart or Winners as opposed to Bebe, Gap and American Eagle. Since 2009 Bebe has been bumping along the bottom slowly climbing its way up.
Some other external factors that significantly influence Bebe’s stock price is weather. People do not want to shop in stormy conditions therefor retail companies are affected. As you can see on the graph, throughout the last three years the peaks are in warmer months. Another thing that affects Bebe’s price is holiday seasons. Christmas is a booming time for the retail industry in which consumers love to spend money. On average, Bebe’s stock price is on the rise in the month of December.
Within the last year, Bebe is up around $1. Many internal factors effect the companies stock price as well. The price had a significant rise on June 7th (see graph) when Bebe reported the same-store-sales rose 7%. On September 12, Bebe announced that 4th quarter earnings grew 8.3% from last year, and earnings more than doubled to 4.7 million. However, their Gross Margin slid because the cost of raw...