Tapestry, Capri Rise as as Luxury Brand Parents Call Off Merger

49 minutes ago

Shares of Tapestry (TPR) surged Thursday while Capri Holdings (CPRI) also gained ground after the parent companies of a number of luxury brands called off their planned merger over ongoing legal challenges.

Tapestry said Thursday that legal challenges to the merger first announced in August 2023 remain “uncertain and unlikely to be resolved by the February 10, 2025 outside date.” Last month, a judge sided with the Federal Trade Commission (FTC), which sued to block the merger on the grounds that it would lead to less competition and higher prices for consumers.

Tapestry, which owns a number of brands including Coach and Kate Spade, said that it plans to reallocate capital now that the deal has been called off, announcing an additional $2 billion stock buyback to its outstanding $800 million on its prior authorization.

Capri Holdings, the owner of Versace, Michael Kors, and Jimmy Choo, said it plans to alter its strategies to focus on growing its own brands now that the merger is off. The shifts include new marketing efforts, a changing retail footprint, and a focus on "aligning product offering to better meet consumer preferences."

Both companies reported earnings last week, with Capri reporting lower revenue and profit than last year as demand for luxury goods was “softening,” Chief Executive Officer (CEO) John Idol said. However, Tapestry beat estimates and lifted its projections for the full fiscal year.

Tapestry shares were up 12% in recent trading, while Capri was up 5% after falling sharply in early trading.

–Aaron McDade

Disney Stock Soars on Streaming Profit Growth, Outlook

2 hr 39 min ago

Shares of The Walt Disney Company (DIS) surged 9% Thursday morning as fourth-quarter revenue and adjusted profit topped analysts’ estimates and the entertainment giant laid out initial projections for the next three fiscal years.

Disney reported $22.57 billion in revenue, up from $21.24 billion last year and narrowly above the $22.50 billion analysts expected. After accounting for about $1.5 billion in one-time charges like restructuring costs, Disney’s adjusted earnings per share (EPS) came in at $1.14, just above estimates of $1.11

Disney said it expects high-single-digit adjusted EPS growth in fiscal 2025 and double-digit growth in fiscal 2026 and 2027, as well as an estimated $3 billion in stock buybacks over the next year. It also projects streaming services operating income to increase by $875 million next year from fiscal 2024, and Experiences segment operating income to grow by 6% to 8%, "weighted to the second half of the year."

Disney's streaming business—comprising Disney+, Hulu, and ESPN+— recorded an operating profit of $321 million after posting a combined profit for the first time last quarter at $47 million. 

Following positive subscriber numbers from competitors like Warner Bros. Discovery’s (WBD) Max and Netflix (NFLX) in recent weeks, Disney said it gained 4.4 million Disney+ subscribers in the quarter.

Revenue in Disney’s Experiences segment, which includes its theme parks and cruise ships, was $8.24 billion, up slightly from $8.16 billion last year as slower discretionary spending from consumers has impacted the division in recent quarters.

Disney shares, which are trading at their highest levels since May, have gained 23% since the start of the year.

–Aaron McDade

Super Micro Price Levels to Watch as Stock Slide Accelerates

4 hr 21 min ago

Super Micro Computer (SMCI) shares continued falling sharply this morning after leading Nasdaq decliners on Wednesday following news that the embattled server maker would delay the filing of its fiscal first-quarter financial report.

The latest update comes after the company said in October that it could not predict when it would file its 2004 annual report, a requirement it must meet to comply with Nasdaq listing rules. The company’s reporting delays stem from the resignation of its auditor Ernst Young last month, which earlier flagged issues with the server maker’s corporate governance and internal controls.

Super Micro shares have lost more than half their value since late October. The stock was down 11% at around $18 in recent premarket trading.

The stock's sell-off has continued after breaking down below a descending broadening wedge pattern late last month on above-average volume.

Investors should watch important support levels on Super Micro's chart around $17 and $12, while keeping an eye on key resistance levels near $23 and $30.

Read the full technical analysis piece here.

–Timothy Smith

Major Index Stock Futures Slightly Higher

5 hr 24 min ago

Futures tied to the Dow Jones Industrial Average were up 0.2%.

S&P 500 futures were up 0.1%.

Nasdaq 100 futures were up less than 0.1%.

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