Put Options on WFM on 3/7/2017

Whole Foods Market, Inc. (WFM) operates natural and organic foods supermarkets. Its stores offers produce, packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods, and household goods.

As of November 2, 2016, the company operated 464 stores in the United States, Canada, and the United Kingdom. Shares are heading lower in a downward trading channel following its anemic earnings report. Presently, shares are in the midde of the said channel (shown in red). Lower share prices are expected. 

The Company's comparable store sales decreased 2.4% on a y-o-y basis. Whole Foods revenue numbers came in below analysts' consensus of $4.98 billion.

For Q1 FY17, Whole Foods gross margin declined 43 basis points to 33.6% driven by increases in occupancy costs and cost of goods sold as a percentage of sales. Excluding the charge related to a separation agreement, SG&A increased 12 basis points to 28.6% of sales.

During Q1 FY17, Whole Foods earned $95 million, or $0.30 per share, compared to $157 million, or $0.47 per share, in the year-ago same period. 

52-Weeks Trading Range: $27.67 - $35.58

Last Trade: $29.56

Trade Buy 1 April $30.00 Put at $1.15 For a net debit of $1.15 Profit/Loss Analysis Breakeven at $28.85 Maximum profit is unbounded Maximum loss is ($115.00) at strike of $30.00 Closing Summary Sold 1 April $30.00 Put at $1.90

Position closed on 3/28/2017 at price of $1.90 with a 65.22% gain in 20 days.

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