Ophir Gottlieb | Jun 19, 2012 03:56AM ET
Body Central Corp. (BODY) is a specialty retailer of young women's apparel and accessories operating retail stores in the South, Mid-Atlantic and Midwest regions of the United States. In addition, the Company operates a direct business through its e-commerce Website, www.bodyc.com, and Body Central catalog.
This is a vol and stock price note on a name that has been crushed of late with two ~50% down days since May, including today's action.
--- ANALYSIS ---
Let's start with the Charts Tab (six months), below, then get to the news. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).
5-3-2012
(Reuters) - Body Central Corp (BODY) forecast second-quarter results below analysts' estimates as it expects a sharp drop in same store sales, sending the apparel maker's shares down 32 percent.
"We continue to see softness in overall store sales trends through April," Chief Executive Allen Weinstein said.
The company expects second-quarter comparable store sales to fall 5 percent to 7 percent, compared with a 15 percent rise in the year-ago period.
The company said it expects to earn 26 to 28 cents per share, on revenue of $80 million to $82 million in the second quarter.
Analysts were expecting earnings of 36 cents a share on revenue of $86.6 million, according to Thomson Reuters I/B/E/S.
The company posted first-quarter results that met Wall Street view of 36 cents per share. Revenue was $82.7 million, slightly above analysts' average expectation of $82.1 million. -- Source: Reuters via Yahoo! Finance; Body Central plunges after cutting forecasts
Clearly the news is bad, but I must say the reaction to the news today seems a bit abrupt. In totality the company revenue has gone from a projection of $86.6 million to now $77 million (for the second quarter). The fear seems to be two -fold:
1. Same store sales went from an expected improvement to a worsening (negative growth).
2. The second quarter numbers / projections from management seem a bit flighty. Or, in English, management's sales visibility seems quite poor.
On the vol side, we can see how much the implied has risen today. I've included a second chart with just a three month window and just the IV30™, to better demonstrate the vol move today.
Let's turn to the Skew Tab to examine the month-to-month vols.
--- SUMMARY --
Finally, let's turn to the Options Tab, for completeness.
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