2 Retail Stocks Getting Walloped After Earnings

BKE and HIBB are both heavily shorted stocks

Nov 27, 2018 at 10:02 AM
facebook twitter linkedin

While Amazon (AMZN) unveiled record Cyber Monday sales, Buckle Inc (NYSE:BKE) reported third-quarter earnings of 42 cents per share on $215.1 million in revenue -- lower than analysts were expecting. What's more, the retailer confirmed same-store sales for the three-month period plunged 1.4%. BKE stock has dropped 8.2% to trade at $19.17, putting a key technical level to the test.

Specifically, the $19.50 level has served as a floor for BKE shares since late October. Above here are the $20.80 and $22.50 price points -- a 23.6% and 38.2% Fibonacci retracement, respectively, of the stock's retreat from its late-August two-year peak at $29.65 to its Oct. 19 low near $18 -- which have contained Buckle stock this month. Year-to-date, the equity is down 11%.

Short sellers are likely cheering today's sell-off. Short interest on BKE stock climbed 3.9% in the two most recent reporting periods to 11.4 million shares. This represents nearly two-fifths of the retailer's available float, or 17.5 times the average daily pace of trading.

The shares of Hibbett Sports, Inc. (NASDAQ:HIBB) are also lower after earnings. The sporting goods retailer reported an adjusted third-quarter profit miss of 14 cents per share, while revenue of $216.9 million fell short of estimates. Comparable sales for the quarter edged up 0.1%, and HIBB said its full-year profit will come in below previous estimates.

In reaction, HIBB stock is trading down 4.7% at $17.11, and has now shed 42.2% since its 16-month high of $29.60 from August. However, the $16.50-$17.00 region has served as a floor recently, which coincides with a November 2017 post-earnings bull gap.

Not surprisingly, sentiment is resoundingly bearish toward the security. All nine analysts in coverage maintain a "buy" or worse recommendation, while 37.5% of the stock's available float is dedicated to short interest.



If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners