1) “Weather Related”
Can anyone remember a time when
weather wasn’t impacting the way we
live our lives? Every Winter I can remember has had snowstorms and every Summer
has had heat waves. These are not
valid reasons for missing targets. They are events that can and in many cases should
be expected and planned for.
2) “Challenging Macro
Environment”
This one is just broad enough to
encompass nearly anything and everything conceivable that might happen in the
course of doing business. No one is expecting management to be able to predict
everything that is going to happen across the globe, but this excuse is akin to
saying, “We’re not really sure what was going on and once we did the accounting
we realized we were behind.”
Really, this excuse is so vague
that it is unclear how management goes about remedying it going forward. The
macro environment is always going to
be challenging and uncertain.
3) “Margins Squeezed Due To
Seasonal Deals”
Every year has basically the same
seasons and holidays. A management team that cannot anticipate it will be
discounting items through December or any other month to generate sales is
frighteningly short-sighted. I would rather not trust them with my investment
dollars.
If the companies you’re invested
in are using any (or worse, all) of
these excuses, it may be a sign to consider other venues. As an investor, you
should be aware of who is managing the companies you hold stock in. If
management is responsible for the good times, they should be able to also point
inward when times get tough.
