Retailers have been releasing holiday sales data over the past week. While recent results from the likes of Macy's (NYSE:M) and L Brands (NYSE:LB) sent the retail stocks tumbling, Kohl's Corporation (NYSE:KSS) and Lululemon Athletica Inc. (NASDAQ:LULU) are trading higher after the department store chain and yoga apparel maker both reported upbeat numbers for the November-December period. Here's a closer look at how shares of KSS and LULU are reacting.
KSS stock is up 6.3% to trade at $57.77, earlier hitting a new 12-month high of $59.09, after the retailer said same-store sales for the holiday period jumped 6.9%. As such, Kohl's boosted its full-year profit guidance to a range of $4.10 to $4.20 per share from its previous estimate of $3.72 to $3.92 per share -- well above the consensus forecast for 2017 earnings per share (EPS) of $3.64.
The Amazon partner has been flying high in recent months, up 52% since taking a sharp bounce off its formerly resistant 200-day moving average in early November. This upside has come amid intense selling pressure from shorts, with short interest up 5.2% in the most recent reporting period to 30.86 million shares -- representing 18.3% of the stock's available float, or 7.2 times the average daily pace of trading.
This skepticism is seen elsewhere, too, per Kohl's stock's 10-day put/call volume ratio of 1.86 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- in the 75th annual percentile. KSS shares could get an additional boost, should some of the weaker bearish hands capitulate to its current momentum.
Lululemon raised its fourth-quarter profit and revenue forecasts, citing a strong holiday shopping season. The retailer said it now expects adjusted earnings of $1.25 to $1.27 per share on revenue of $905 to $915 million. This compares to a previous forecast for EPS of $1.19 to $1.22 on $870 to $885 million in revenue. Analysts, meanwhile, are calling for a quarterly profit of $1.22 per share on $883.8 million in sales.
In reaction, LULU hit a four-year high of $81.92 out of the gate, but has since swung 0.9% lower to trade at $78.75. More broadly, the shares have rallied 73% since bottoming near $47.25 in late May. This surge had the stock's 14-day Relative Strength Index (RSI) close at 72 last Friday -- in overbought territory -- which may explain today's reversal.
Analysts, meanwhile, yet to catch up to LULU's longer-term price action. Of the 24 brokerages covering the shares, 11 maintain a "hold" rating, while the average 12-month price target of $78.18 stands at a discount to Lululemon's current stock price. Should the stock resume its uptrend, a round of upgrades and/or price-target hikes could translate into bigger gains for LULU shares.