Tailored Brands Stock Plunges on Disappointing Fourth Quarter

Puts have rarely been more popular on Tailored Brands stock

by Emma Duncan

Published on Mar 14, 2019 at 10:43 AM

Tailored Brands Inc (NYSE:TLRD) is being pummeled this morning, last seen 21.7% lower at $9.15 -- and fresh of a 10-year low of $8.70 -- after the retailer reported a fourth-quarter sales miss and disappointing forecast. Looking closer, comparable sales for the Men's Wearhouse and Jos. A. Bank businesses declined during the period. 

In response, at least two brokerage firms have lowered their price-target and/or rating on Tailored Brands stock. Specifically, B. Riley downgraded to "neutral" from "buy" and slashed its price to $11 from $20 due to uncertainty in the company's forecast, while Jefferies dropped to a price target of $19 from $24. Two-thirds of following analysts still sport "strong buy" recommendations, however.

Tailored Brands stock has suffered steep losses since its May two-year highs, shedding 55% over the past six months. Pressuring the shares lower since October has been the 50-day moving average, which blocked a breakout attempt earlier this month. 

Looking at options data, Tailored Brands stock holds a Schaeffer's put/call open interest ratio (SOIR) of 1.43, which ranks just one percentage point from an annual high. In other words, near-term options traders have rarely been more put-biased in the past year. 

Lastly, short interest has been quite elevated, rising 25% during the past two periods alone, and now accounts for a healthy 17.7% of the stock's total available float. At TLRD's average pace of daily trading, it would take over nine days for shorts to cover their bearish bets. Today's losses have the stock on the short-sale restricted list.

 

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