KSS Pulls Down Retail Stock Peers

Kohl's dismal earnings miss and guidance cut is weighing on retail stocks

by Patrick Martin

Published on Nov 19, 2019 at 2:24 PM

The Dow is taking a breather today, as a struggling retail sector weighs on Wall Street. Among three retail names making notable moves lower today are Kohl's Corporation (NYSE:KSS), Macy's Inc (NYSE:M), and Nordstrom, Inc. (NYSE:JWN). Here's a quick look at what's moving the shares of KSS, M, and JWN.   

Kohl's Earnings Whiff Prompts Option Bear Frenzy

One of the worst stocks on the New York Stock Exchange (NYSE) today is Kohl's, down 18.1% to trade at $47.83, after the retailer reported third-quarter earnings and revenue that fell short of estimates. Kohl's' same-store sales figures also whiffed, and the company also trimmed its fiscal year guidance. In response to what's about to be KSS' worst single-session drop since January 2017, Jefferies trimmed its price target to $65 from $75. 

With Kohl's stock on the short-sale restricted (SSR) list today, options have come into greater focus. At last check, 70,000 contracts have changed hands, four times the average intraday amount and volume on track for the 100th annual percentile. The weekly 11/22 51-strike put is most popular, and there are also new positions being opened at the December 50 put.

Dragged Down by KSS, Macy's Rejected by Key Trendline

Down in the cellar with Kohl's today is Macy's stock, last seen nursing a 10.7% loss at $15.08. The former's dismal report is weighing on M, putting it on track for its worst single-session drop since its own post-earnings bear gap back on Aug. 14. M shares -- now down 54% year-over-year -- were just met with stiff resistance at their 100-day moving average.

Macy's stock is also SSR today, and options traders have responded in kind. With just under two hours left in today's trading, almost 100,00 puts have changed hands, six times the expected intraday amount and four times the average daily volume. Leading the charge by a wide margin is the weekly 11/22 15-strike put, where new positions are being opened. 

JWN Rally Cut Short After Retail Sector Slide

Last but not least, we have Nordstrom stock, down 5.3% to trade at $35.87, with Kohl's' dour forecast weighing heavy on the retailer. JWN was putting together a nice 44% rally from its Aug. 15 bottom of $25, but is now in danger of breaching its 30-day moving average.  

Puts have soared in popularity today. At last check, more than 28,000 JWN puts have been traded, 12 times the expected intraday amount and more than five times the number of calls traded. Once more, a weekly option leads the charge, with the Nov. 22 31-strike put in command today, and new positions being opened. 


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