The apparel retailer also tightened its fourth-quarter earnings outlook
Lululemon Athletica Inc (NASDAQ:LULU) is down 10.1% at $295.89 at last check, after the apparel retailer noted it expects its fourth-quarter margins to decline, and tightened its quarterly earnings outlook amid higher costs and weaker consumer spending due to high inflation.
Today's bear gap has the shares trading at their lowest level since late October, while also breaching a floor at the $305 level, which had contained the security's December pullback. Longer term, Lululemon Athletica stock has shed more than 10% in the past 12 months.
The options pits lean bearish, per the equity's 50-day put/call volume ratio of 1.14 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 86th percentile of its annual range. This suggests long puts have been getting picked up at a much quicker-than-usual clip during the last 10 weeks.
Now could be a good opportunity to bet on LULU's next move with options, as the security is sporting attractively priced premiums at the moment. This per its Schaeffer's Volatility Index (SVI) of 46%, which sits in the relatively low 33rd percentile of readings from the past year.