Kohl's Stock Slips After Revenue Miss

KSS options traders could be in for a disappointing session

Deputy Editor
Aug 20, 2019 at 9:40 AM
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Department store issue Kohl's Corporation (NYSE:KSS) stepped into the earnings ring this morning, with second-quarter earnings of $1.55 per share, which beat out analysts' estimates. However, the retailer reported quarterly revenue and comparable-store sales below expectations, citing unseasonably chilly and wet weather. The company also expects full-year gross margin to drop 35 to 45 basis points, partially due to the estimated impact of the next round of U.S. tariffs on Chinese goods. As such, KSS stock is down 1.2% to trade at $47.61.

Kohl's stock touched a nearly two-year low of $43.33 on Aug. 15. The equity subsequently tried to rebound, but failed to fill its Aug. 14 bear gap, which stemmed from ugly guidance from sector peer Macy's (M). 

Currently, the majority of analysts are cautious on Kohl's, with seven of the 12 in coverage calling it a "hold" or worse. The consensus 12-month price target of $60, on the other hand, represents a level the stock hasn't touched since before its post-earnings bear gap in May.

KSS options traders have been much more optimistic ahead of earnings, as demonstrated by the security's 50-day call/put volume ratio of 2.50 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 95th percentile of its annual range, suggesting a much bigger appetite for bullish bets over bearish during the past 10 weeks. 




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