This morning, Cincinnati-based Kroger Company (KR: sentiment, chart, options) announced that its third-quarter earnings slipped to $237.7 million, or 36 cents per share, from its year-ago profit of $253.8 million, or 37 cents per share. Adjusted net income in the latest period totaled 39 cents per share, after breaking out 3 cents per share for a $25-million deductible payment related to Hurricane Ike. Sales at the supermarket giant rose 9% to $17.6 billion. Analysts had predicted a profit of 38 cents per share on revenue of $17.5 billion.

Looking ahead to the fourth quarter, the company forecasts earnings of 49 to 52 cents per share, versus the Street estimate of 53 cents per share

The shares gapped lower on the open and are currently sitting on a loss of more than 5%. However, the security remains in a long-term trading range between support at the 24 level and resistance in the 30 range.

Pessimism is building toward the shares among options players. The Schaeffer's put/call open interest ratio rests at 1.11, as put open interest outnumbers call open interest among near-term options. This reading is higher than two-thirds of the readings taken during the past 52 weeks. What's more, the International Securities Exchange (ISE) has seen an increase in put trading. During the past 10 trading sessions, an average of 1.9 puts has been bought to open for every 1 call purchased. This ratio of puts to calls is higher than 81.8% of all those taken during the past year, pointing to high levels of pessimism among options traders.