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The company did share a top- and bottom-line beat for its second quarter, however
The shares of Kohl's Corporation (NYSE:KSS) are down 8.3% at $31.15 this morning after the retailer's second-quarter earnings report. While the firm's profits of $1.11 per share on $4.09 billion in revenue topped expectations on both counts, Kohl's slashed its full-year sales and profit forecast, noting weakness in its shoe and apparel sales as middle-income customers feel the heat of rising inflation.
Analysts have yet to chime in, though sentiment surrounding KSS was already quite bearish. Of the 10 in coverage, four say "hold," and three say "sell" or worse. What's more, the 12-month consensus price target of $31.45 is right in line with current levels.
Short sellers, meanwhile, have been jumping ship. Short interest dropped 16.9% in the last reporting period, though the 12.22 million shares sold short still make up 9.6% of the stock's available float.
Options traders took a much more bullish stance ahead of Kohl's earnings event. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day call/put volume ratio of 3.77, which sits higher than 96% of readings from the past year. This implies options traders are picking up calls at a much quicker-than-usual clip.
Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.30 stands higher than just 10% of readings from the past year. In other words, short-term options traders have rarely been this call-biased.
A look at today's options activity shows 28,000 calls and 16,000 puts exchanged so far, which is seven times the intraday average. The most popular contract is the August 33 call, followed by the 34 call in the same series, with positons being opened at both.
The security has staged a valiant rally up the charts since gapping toward an annual low of $26.07 on July 27, with support emerging at the 10- and 20-day moving averages. The 20-day could still serve as a possible floor for KSS, however, even as it deepens its 31.3% year-to-date deficit.