Why is the Best & Less share price crashing 15% on Wednesday?

The retailer's shares have taken a major hit so far today…

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Key points

  • The Best & Less share price is plunging on Wednesday, shedding 15%
  • There is no news from the company today, but yesterday it posted its FY22 results
  • Mixed results in its earnings report for FY22 could be contributing to the downfall in its share price

The Best & Less Group Holdings Ltd (ASX: BST) share price is plummeting in midday trade, currently down 15%.

Shares of the iconic clothing retailer are currently trading for $2.295 each after closing on Tuesday at $2.70 a share.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.32% while the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ), which Best & Less is a part of, is down just 0.14% at the time of writing

It seems Best & Less's steep selloff isn't in step with major market movements. So what's going on? Let's investigate.

What's going on with the Best & Less share price?

There's no news out of Best & Less today to help make sense of the company's share price movement.

But yesterday, the retailer posted mixed results in its financial report for FY22. After enjoying an early rally on the back of its results, the company's shares closed 3% higher on the day.

In its results, Best & Less noted considerable headwinds from COVID-19 that challenged the report's top and bottom lines.

Both revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) shrank during the period. Revenue finished at $622 million, down 6.2% year over year, while EBITDA finished at $62.5 million, down 12.7% year over year.

The company announced a final dividend of 12 cents per share. It prompted my colleague Bruce Jackson to mention Best & Less in a roundup post yesterday, noting that the company's dividend yield of 3.91% was "attractive".

The company also provided an optimistic update on FY23 so far, reporting total sales were up 38% over the prior corresponding period in the first eight weeks of trading.

But it seems investors are reconsidering the company's position today.

Best & Less share price snapshot

The Best & Less share price is currently down 44% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down around 8% over the same period.

The company's market capitalisation is roughly $287 million.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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