2 Retail Stocks Barreling Toward a 7-Day Losing Streak

Ulta Beauty stock has shed 24% year-to-date

Managing Editor
Oct 12, 2017 at 3:26 PM
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U.S. stocks are slightly lower today, despite the Dow, S&P 500, and Nasdaq Composite all touching record highs earlier. Retail stocks Ethan Allen Interiors Inc. (NYSE:ETH), Williams-Sonoma, Inc. (NYSE:WSM), and Ulta Beauty Inc (NASDAQ:ULTA) are all having days to forget, amid sector headwinds. Here's a quick look at what is moving shares of ETH, WSM, and ULTA.

Ethan Allen Stock Slides After Lowered Guidance

Ethan Allen Interiors stock is down 4.7% to trade at $29.08, after the company lowered its guidance for 2017, citing a negative impact from Hurricanes Harvey and Irma. ETH will report earnings after the market closes on Wednesday, Oct 25.

In 2017, the stock has shed 21.1%, and is currently on track for a seven-day losing streak. Shorts are likely cheering ETH's latest struggles. Although short interest decreased by 2% during the last reporting period, the 3.88 million shares sold short represent 15.2% of the stock's total available float.

Credit Suisse Downgrade Digs Into Williams-Sonoma Stock

Williams-Sonoma stock is down 3.8% to trade at $48.77, after Credit Suisse downgraded the retailer to "underperform" from "neutral." Analysts cited online competition and sales underperformance as reasons for the downgrade. The dip today takes the stock below its year-over-year breakeven level, although the shares appear to have found a foothold atop their 2016 close at $48.39. WSM stock is no stranger to negative analyst note. Of the 15 brokerages covering the stock, 13 rate the shares a "hold" or "buy." 

Downgrade Extends Ulta Beauty Stock Slide

Cleveland Research downgraded Ulta Beauty to "neutral" from "buy" and lowered its third-quarter and full-year profit forecast, citing increased competition and a slowdown in the cosmetics industry. ULTA stock is currently down 7.7% to trade at $191.92, and earlier fell to an annual low of $189.50. The stock is on track for its seventh straight losing session. Longer term, the equity has shed 24.8% year-to-date, with the 40-day moving average has guided the stock lower since late June.

Nevertheless, options traders remain confident in the beauty retailer. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ULTA boasts a 50-day call/put volume ratio of 1.39, which ranks in the 78th percentile of its annual range. This signals a stronger-than-usual preference for long calls over puts. 
 

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