Seeking Alpha
Editor's notes: The market has overreacted to marginal signs of a turnaround in TUES. Peak earnings are a distant memory, and investors should take profits or consider a short position.

Tuesday Morning (TUES) is a discount retailer whose share price has quadrupled since the start of 2012 and doubled since the start of 2013. After posting huge losses on inventory in fiscal 2013 -- but a slight sales gain -- the stock soared. Here we propose a short thesis which rests on the historical results of the business, the high current valuation, and the fact that retail is a challenging business. Retail, after all, has high fixed costs, is frequently driven by fads, and exists in a highly competitive environment.

Tuesday Morning is facing its first holiday season since its latest CEO change up. Check out its recent CEO history:

  1. June 2012 -- CEO Kathleen Mason is fired.

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