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2 Retail Stocks Red-Hot After Earnings

GOOS stock is fresh off a new record high

Nov 14, 2018 at 9:59 AM
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Macy's Inc (NYSE:M) reported stronger-than-expected adjusted third-quarter earnings of 27 cents per share on in-line revenue of $5.4 billion. Macy's also said same-store sales grew at a faster-than-anticipated 3.3%, and the department store chain boosted its full-year profit forecast ahead of the holiday season.

In reaction, M stock is up 2.3% at $36.57, bringing its year-to-date gain to 45%. The equity could be in for even more upside in the near term, considering it's been one of the best stocks to own during Thanksgiving week over the last decade.

Macy's options volume was accelerated ahead of earnings, and it looks like a number of speculators were looking to capitalize on a post-event volatility crush with sell-to-open activity detected at the November 34.50 put yesterday. Per Trade-Alert, the at-the-money term structure for front-month M options closed Tuesday at 143.66%, versus 52.98% for the standard December series.

Elsewhere in the retail space, Canada Goose Holdings Inc (NYSE:GOOS) said its fiscal second-quarter adjusted profit and revenue came in higher than analysts were expecting, thanks to surging online sales. Plus, the Toronto-based luxury apparel maker upped its full-year profit and revenue forecast.

The beat-and-raise has the U.S.-listed shares of GOOS up 21.1% to trade at $70.95 -- fresh off a new record high of $72.27, and set for their best day since Jun 15, when the equity surged 33.1% after earnings. Canada Goose stock has now almost quadrupled since opening on the Big Board at $18 per share back on March 16, 2017.

Options traders were loading up on long puts relative to long calls at a heavier-than-usual clip ahead of earnings. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GOOS stock's 10-day put/call volume ratio of 0.75 ranks in the 91st annual percentile. Given the retailer's impressive long-term technical performance, though, this could be indicative of shareholders protecting paper profits against any downside risk.

 

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