Unusual Options Activity In Urban Outfitters

Inc. operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28

and Anthropologie stores that provide women’s casual apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45.

Urban Outfitters reported their first quarterly earnings and the sales and profit results beat Wall Street expectations.  However, their net income of $32.6 million for the quarter was down 21% from a year ago.  In addition, many analysts think Urban Outfitters will have a tough second quarter.

Wedbush analyst Jen Redding said Urban Outfitters management is bracing for the impact of the latest trade war tariffs.

“Together, the combination of notable supply chain exposure to China, deteriorating business trends as seen in May in our Transaction Data, and a challenging 2Q SSS comparison continues to keep us sidelined until visibility improves,” Redding wrote.

Bank of America analyst Lorraine Hutchinson said the first quarter was great, but the second quarter is off to a rough start.

“After a surprising positive comp in 1Q (+1%), 2QTD comps are down a mid-single digit against the best weeks of last year,” Hutchinson wrote in a note.


So I wasn’t surprised to see the Smart Money buying over 15,000 June put options with a strike price at $22.50.

Many of the Retailers have been reporting their earnings this week, with dismal results.  Thus, sentiment is down on the sector, so a $2 move down to $22.50 is very possible within the next several weeks and the chart suggests it’s clear sailing at least down to the the daily demand at $21. 

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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