NATO Chief Rasmussen: There are no signs that Russia is withdrawing troops from its border with Ukraine, there is a high probability that Russia could still intervene in eastern Ukraine
Gapping down In reaction to disappointing earnings/guidance: DF -8.3%, DVR -7.2%, EVEP -2.4%, GOGO -1.7%, PCLN -1.4%, AU -1.2%, SSL -0.8%, TECH -0.5%.
M&A news: RDS.A -0.5% (Blackstone (BX) near deal for 50% Shell (RDS.A) Haynesville shale, according to reports).
Select EU financial related names showing weakness: RBS -2.4% (to sell international unit of private bank, according to reports), DB -1.5%, HSBC -1% (to keep private bank, according to reports), SAN -0.8%, CS -0.7%.
Other news: VRTV -5% (Baupost Group discloses 14.06% passive stake in 13G filing), Z -2% (ticking lower following cautious Barron's mention), ARMH -1.4% (still checking).
Analyst comments: TWOU -8.7% (downgraded to Neutral from Buy at Goldman), CEQP -1% (downgraded to Market Perform from Outperform at Wells Fargo), TDW -0.9% (downgraded to Accumulate from Buy at Global Hunter Securities), THOR -0.6% (downgraded to Market Perform from Outperform at Northland ), KING -0.4% (downgraded to Sector Perform from Outperform at Pacific Crest).
Gapping up In reaction to strong earnings/guidance: WBAI +6.4%, TTM +5.8%, MFRM +5.1%, RGEN +4.1%, ARMK +3.5%, BITA +2.8%, MPAA +2.3%, USEG +2.3%, HE +1.6%, TSM +0.8%, ADHD +0.6%, ZOES +0.5%.
M&A news: KMI +20.1% (to purchase KMP, KMR and EPB; 2015 KMI dividend to increase to $2 per share), KMR +34.6%, EPB +30.5%, KMP +27.1%.
Other news: PIP +42.9% (Delaware Court of Chancery orders SIGA to pay PharmAthene lump sum expectation damages), DRL +28% (disclosed settlement with the Treasury Department), MNKD +25% (SNY and MannKind announce global licensing agreement for Afrezza rapid-acting inhaled insulin), HGSH +21.5% (will be engaged in large-scale Shanty Areas rebuilding Projects with budgeted investment over $1.3 billion), BIOD +10.5% (concentrated Insulin BIOD-531 demonstrates superior glucose control following standardized meals vs marketed insulins in a Phase 2 Clinical Trial in patients with Type 2 Diabetes), TKMR +7.2% (continued momentum on ebola exposure), BCRX +5.9% (may be related to MNKD news, biotech peer), OXGN +5.7% (maybe related to MNKD news, biotech peer), KNDI +3.6% (may be related to TSLA upgrade, also Shanghai strong overnight), NQ +2.5% (cont volatility), PLUG +2.3% (continued momentum), BYI +2.3% (may be related to acquisition in the space), JD +2.3% (Shanghai strong overnight), MY +2.2% (stong Shanghai overnight), RIO +1.8% (strong Chinese markets overnight), NOK +1.6% (launches new MSFT phone), HLF +1.5% (Capital Research Global Investors discloses 10.1% passive stake in 13G filing), JKS +1.3% (opens solar module factory in Cape Town, South Africa), CCL +1.2% (cruised data released Friday), PVG +0.9% (provides Q2 updates on Brucejack Project; increases in Valley of the Kings mineral grade).
Analyst comments: ACHN +8% (upgraded to Outperform from Market Perform at Wells Fargo, upgraded to Overweight from Neutral at Piper Jaffray), KKD +4.6% (upgraded to Outperform from Neutral at Wedbush), CDNA +4.3% (initiated with a Buy at Mizuho, initiated with a Outperform at Leerink Partners), TSLA +2.7% (upgraded to Buy from Hold at Deutsche Bank), CHUY +2.4% (upgraded to Outperform from Mkt Perform at Raymond James), OAS +2% (upgraded to Buy from Neutral at Sterne Agee), GNC +1.9% (upgraded to Outperform from Neutral at Credit Suisse ), FMS +1.3% (upgraded to Buy from Hold at Societe Generale ), SD +0.9% (upgraded to Reduce from Sell at KLR Group), FCX +0.8% (upgraded to Buy from Hold at Argus), NFLX +0.7% (target raised to $527 at Topeka Capital Markets)
Fossil: FOSL fuel from KORS and more - 2Q on tap - Topeka
Topeka reiterates their Buy rating on FOSL ahead of its 2Q report (Tuesday afternoon), especially given the YTD sell-off in the shares. Last week, Michael Kors (KORS-$78.75:Buy) once again cited strength in its watch and jewelry business, with watches continuing to be driven by trends such as colored dials, and leading KORS to expand the number of watch and jewelry shops. They continue to think smartwatch fears are overdone and that the category continues to thrive, especially on strength in brands.
Mattress Firm guides Q2 above consensus; raises FY14 outlook
- Co reported preliminary net sales and adjusted EPS for the second fiscal quarter ended July 29, 2014.
- Net sales for the second fiscal quarter increased 35.5% to $410 million (Capital IQ consensus $384 mln), reflecting comparable-store sales growth of 9.7% and the addition of new and acquired stores. The Company expects second fiscal quarter earnings per diluted share on a generally accepted accounting principles basis of $0.39 to $0.42, and EPS on a non-GAAP adjusted basis, excluding ERP system implementation costs, acquisition-related costs and impairment and severance charges, is expected to be between $0.58 and $0.61 per diluted share for the second fiscal quarter, Capital IQ consensus $0.49.
- Co raises FY14 revenue guidance to $1.545-1.585 mln (Capital IQ consensus $1.53 bln)
- Raises Adjusted FY14 EPS guidance to $2.03-2.13 (Capital IQ consensus $1.95)
Dean Foods misses by $0.08, beats on revs; guides Q3 EPS below consensus; withdraws full year guidance
Reports Q2 (Jun) loss of $0.14 per share, $0.08 worse than the Capital IQ Consensus Estimate of ($0.06); revenues rose 7.4% year/year to $2.39 bln vs the $2.32 bln consensus.
- Co issues downside guidance for Q3, sees EPS of ($0.15) - ($0.05) vs. $0.26 Capital IQ Consensus Estimate.
- Dean Foods' share of U.S. fluid milk sales volume increased to 35.9% during the second quarter from 35.7% in the first quarter of 2014. The Company continues to make solid progress against its accelerated cost reduction agenda. Since announcing in the first quarter of 2013 its intention to close eight to twelve (10-15%) of its manufacturing facilities by mid-2014 the Company has closed twelve plants. Four of the twelve closures occurred in June and July of this year. As we move beyond our accelerated cost reduction agenda, we expect to return to our normal optimization activities.
- Guidance: "The balance of the year appears rocky, with a continued unpredictable and volatile dairy commodity environment. That makes it difficult to provide guidance beyond the immediate quarter...Therefore for the time being, we are going to provide specific guidance only for the next quarter, where our visibility is better. In this case, we expect an adjusted diluted net loss of between $0.05 and $0.15 per share in the third quarter. While we hope to see a more positive environment later in the year, the uncertainty surrounding whether or when that will occur leads us to withdraw our full year guidance for the present time....We also expect to be at the low end of our prior 2014 capital expenditure guidance of $150-175 million."
Early premarket gappers
Gapping up: PIP +57.1%, KMR +26.7%, EPB +25%, DRL +21.1%, KMP +20.8%, MNKD +21.8%, TKMR +13%, KMI +12.1%, TTM +9.8%, OXGN +7.9%, ACHN +8%, CDNA +4.3%, CPST +4.2%, BCRX +5.7%, TSLA +4%, PLUG +3.4%, BYI +3.4%, KNDI +3.4%, GPRO +1.8%, ING +1.8%, JD +1.8%, RIO +1.7%, CCL +1.2%, KKD +1.2%
Gapping down: SIGA -25.2%, ARMH -1.7%, DB -1.5%, PT -1.5%, Z -1.2%, CS -1%, HSBC -1%
Gapping down: SIGA -25.2%, ARMH -1.7%, DB -1.5%, PT -1.5%, Z -1.2%, CS -1%, HSBC -1%
Herbalife: Capital Research Global Investors discloses 10.1% passive stake in 13G filing
from 8.49% according to bbg
Alibaba Cleans Up 'Gray Market' for Some Prestigious Brands
Labels That Open Tmall Stores Get Help in Curbing Unauthorized Vendors
Chinese e-commerce company Alibaba Group Holding Ltd. is rolling out a powerful new incentive to attract luxury brands: removing some listings from its online shopping sites.
Like many premium brands, Burberry BRBY.LN +1.46% PLC had been fretting about a flood of discount Burberry products—some of them fakes—on Alibaba's two big marketplaces, which accounted for 80% of China's estimated $300 billion in online shopping last year. Burberry hadn't authorized any of those vendors to sell its goods.
Alibaba would do its best to get those products off its sites if Burberry opened its own shop on Alibaba's online mall, Burberry was told, according to people familiar with the talks. Burberry opened a store on Alibaba's Tmall in April.
Interviews with nearly three dozen sellers, brands and analysts indicate that Alibaba has recently taken similar steps for other high-profile Western brands, including Estée Lauder EL +1.37% Cos., hoping they would embrace Tmall, China's main online venue for big brands. Alibaba has promised that once they open their own stores, it will purge goods sold on Tmall by retailers not authorized by the brands or do more to fight fakes on Taobao, Alibaba's huge online bazaar, according to people familiar with the matter.
Alibaba has been eager to woo high-end brands ahead of a listing on the New York Stock Exchange that is expected to be one of the largest initial public offerings in U.S. history. The presence of luxury brands lends a luster that can draw shoppers, other brands and potentially investors.
Before Burberry opened its Tmall store, more than 50 vendors—none of them authorized by Burberry—sold the brand's products on the site. All those goods had disappeared from the site around the time Burberry's store opened, according to a study run for The Wall Street Journal by e-commerce analysis firm YipitData, although two resellers of Burberry perfumes returned in July.
Alibaba told many shops on its sites that they had to stop selling the U.K. brand's products. It blocked some stores from posting Burberry items, and checked more frequently to make sure vendors weren't using Burberry copyrighted images, sellers said.
"Tmall is having a change of strategy," said Vincent Wong, chairman of Hong Kong-based Pompei Holdings Ltd., which specializes in selling luxury items at discounted prices and was told to pull Burberry-branded goods from its Tmall shop. "When a global brand opens its store, we are not allowed to display that brand."
Alibaba's offer to crack down on gray-market goods for brands that open Tmall stores provides a powerful incentive for brands to join the site, said Scott Galloway, chief executive of L2 Inc., a New York-based research firm. Alibaba's websites are a door to China's 300 million online shoppers. In 2012, the combined transaction volume of Taobao and Tmall topped one trillion yuan, or about $160 billion, more than Amazon.com and eBay combined.
Until now, most high-end brands had resisted opening storefronts, some saying their images could be tarnished by the bargain-basement atmosphere of Tmall, a sprawling marketplace with 70,000 vendors, where so-called gray-market' resellers thrive.
Such vendors buy brand-name goods—often from distributors outside China—and resell them at discounted prices without the companies' authorization. Many brands frown upon the practice, which is restricted in some countries. Such sales are generally permitted in China, and Alibaba has typically allowed them. By comparison, the sale of counterfeits is illegal in China and online platforms must remove these listings in a timely manner once they have been notified about them, said Haifeng Huang, who specializes in intellectual-property issues at law firm Jones Day.
Nearly four dozen Tmall shops sold Estée Lauder beauty products earlier this year. But around the time Estée Lauder opened its Tmall store in May, all third-party products had vanished, according to YipitData.
Estée Lauder's opening also benefited its sister brand, Clinique, which had opened a Tmall shop last year: All third-party sales of Clinique products also disappeared from the site in May.
In contrast, the number of third-party vendors selling products from Gucci, which doesn't have a Tmall store, rose to 69 in June from 63 in April. Third-party vendors of Giorgio Armani SpA and Ralph Lauren Corp. RL +1.47% —two other brands without a Tmall store—also increased. Gucci and Ralph Lauren declined to comment. An Armani spokesman said the company "engages in various activities around the world to protect [its brands'] integrity," but isn't commenting on the situation in China.
In July, Gucci, Yves Saint Laurent and other luxury brands under Kering SA KER.FR +0.19% filed suit against Alibaba, saying that the Internet company's shopping, marketing and payment platforms "knowingly make it possible for an army of counterfeiters to sell their illegal wares." Two weeks later, the luxury brands withdrew their claims against Alibaba, saying in a joint statement with Alibaba that the parties had "agreed to work together in good faith to further reduce counterfeiting of Kering brands."
Alibaba declined to comment on its dealings with luxury brands. Burberry referred to its April news release, saying that the Tmall store offers the "purest articulation of the Burberry brand on any of the Alibaba platforms to date."
A spokeswoman for Estée Lauder said the brand was "pleased with our relationship with Tmall China thus far and look forward to continuing to expand this relationship.''
Brands also have complained about counterfeits on Alibaba's other website, Taobao, an online bazaar with eight million sellers offering 800 million products. Alibaba has stepped up efforts to deal with the issue, and in the past has signed agreements with Coach Inc. COH +5.43% and LVMH Moët Hennessy Louis Vuitton SA, among others, to crack down on fakes.
People familiar with Alibaba's marketplaces said its efforts to eliminate unauthorized sellers while recruiting brands to Tmall have intensified in recent months.
In December, Alibaba signed an agreement with the British government and said it would remove gray-market products for U.K. brands that opened official shops on Tmall, according to a spokesman for the country's Trade & Investment division.
The French and Italian governments have also signed agreements with Alibaba, but haven't said whether Tmall promised to clear gray-market goods.
Some Western mass-market brands that already had Tmall shops, such as Nike Inc. NKE +0.93% and New Balance Athletic Shoe Inc. also are starting to see gray-market goods cleared away, according to YipitData. That pushes more sales to their official stores.
In April, 12.6% of Nike athletic shoes sales on Tmall came from the brand's flagship store. That percentage had nearly doubled by July, according to YipitData.
Nike said the brand has devoted "considerable resources" to fighting gray-market goods offline and online, including working with Tmall to address the issue.
Dan McKinnon, senior counsel of trademarks and global brand protection at New Balance, said the company has spoken to Alibaba "many times" about its concerns about gray-market goods and counterfeits on its shopping platforms. This year, the company noticed fewer gray-market New Balance shoes on Tmall, he said. The percentage of New Balance sales on the site coming from the brand's store climbed to 69% from 57% between April and July.
Analysts said it may be harder for Alibaba to crack down on unauthorized sales for things like sneakers, since unlike the luxury firms, mass-market brands often have authorized distributors on Tmall, making it harder to winnow out the problem shops. Doing so might also hurt Tmall's sales and traffic.
"They need to clean their ecosystem to please the highest-end brands, but on the other hand, the counterfeit and gray-market goods generate a good amount of sales," said Alex Misseri, head of e-commerce at digital-consulting firm Razorfish.
For the gray-market vendors, the selective bans on sales of some brands have been frustrating.
Yuen Wong left his job at an electronics company to open a Tmall store called X2C with two partners in May, selling Western brand-name goods such as Michael Kors and Armani watches. But he said Tmall told him that he may not be able to sell products from any brands that open an official store. To cope, he plans to increase the number of brands he offers to as many as 50,000 in the next year, from 2,000 now.
"In an ideal scenario, they don't want people like us, they want the brand owners," Mr. Wong said. "They allow people like us because it generates sales and demand."