FDO reports their fiscal Q1 earnings Thursday morning before the open. The options market is implying a one day move of about 6%, which is slightly rich to the 4 qtr avg move of about 5.5% and 4.7% for the last 8 qtrs.
The technical set up for FDO is quite interesting heading into Thursday’s print and their presentation at the annual ICR retail conference next Monday at 11:30am.
The stock is down about 13% since making new 52 week highs back in September, but since the company has had a series of disappointments on the sales front. The stock is now sitting right above the breakout level from July, which if you look at the last month’s price action, served as mild support at best. Below $65 the next major support level is not until $60
On a longer term basis, the 4 year chart below shows what could be a fairly important double top from the 2012 highs to the recent highs in Sept, just below $75 (green line), and obviously once again the long term support at $60 (red line) which was also the breakout level to new highs back in late 2011.
Vol Snapshot:
FDO typically sees mid to high 30’s in IV in its earnings cycles:
Currently, Jan vol is about 34 but could be a few points higher by Thursday. Feb is about about 27 vol and should only fall a few points down to the low to mid 20’s following the report. This difference is probably not enough that a calendar is a screaming buy but something to keep an eye on.
Q1 Estimates and FY14 Consensus from Bloomberg:
1Q adj. EPS 69c, saw 65c-75c in Oct.
1Q rev. est. $2.51b (range $2.42b-$2.54b)
1Q comp sales est. down 1.9%, saw comp sales down low-single-digit range
FY14 adj. EPS est. $3.98, saw $3.80-$4.15
FY14 rev. est. up 5% to $10.88b (range $10.68b-$11.01b), saw mid-single-digit increase
FY14 comp sales est. up 1.4%, saw low-single-digit increase