GOOS Stock Crumbles After Profit Margin Miss

Options bears are likely cheering GOOS stock's post-earnings slip

by Lillian Currens

Published on Aug 14, 2019 at 9:33 AM
Updated on Aug 14, 2019 at 9:33 AM

Outerwear manufacturer Canada Goose Inc (NYSE:GOOS) is down after stepping into the earnings confessional this morning and posting a second-quarter earnings and revenue beat, thought profit margins were weaker than expected. The company cited a higher portion of its sales going to department stores for the lower margins. At last check, GOOS is down 5.9% at $40.68. 

This marks the lowest point the stock has traded in over a month, and has GOOS threatening to close back below a recent floor at its 60-day moving average. Looking back, GOOS has been struggling on the charts since its June rally lost steam right beneath the $48 region. Now, the security is roughly 7.2% off its year-to-date breakeven level. 

While analysts have been quiet on the apparel concern so far today, D.A. Davidson piped up just last week encouraging investors to buy the stock's recent dip. Elsewhere, four analysts are calling the stock a "strong buy" while three have slapped it with a tepid "hold." What's more, the consensus 12-month target price of $56.86 represents a level the equity hasn't touched since April. 

On the other hand, options bears ramped up their pessimistic positions ahead of Canada Goose's earnings report. On the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) GOOS sports a 10-day put/call volume of 1.56. This ratio sits higher than 97% of all other readings from the past year.

In the same vein, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.55 also sits in the 97th percentile of its annual range. This indicates that short-term options players have rarely been more put heavy in the last 12 months. 

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