What Happened:

Shares of outdoor specialty retailer Sportsman's Warehouse (NASDAQ:SPWH) fell 13.7% in the morning session after the company reported second quarter revenue and EPS below Wall Street's estimates. Its full-year revenue guidance also came in significantly below analysts' expectations. Given the decrease in demand, Sportsman's Warehouse said it would be more aggressive in its promotional activity to drive foot traffic to its stores, putting pressure on its profit margins in future quarters. Furthermore, the company has yet to find a permanent CEO. Overall, this was a bad quarter.

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What is the market telling us:

Sportsman's Warehouse's shares are not very volatile than the market average and over the last year have had only 25 moves greater than 5%. Moves this big are very rare for Sportsman's Warehouse and that is indicating to us that this news had a significant impact on the market's perception of the business.

Sportsman's Warehouse is down 64.2% since the beginning of the year, and at $3.31 per share it is trading 67.9% below its 52-week high of $10.31 from December 2022. Investors who bought $1,000 worth of Sportsman's Warehouse's shares 5 years ago would now be looking at an investment worth $575.84.

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