>>> Zale announces overall holiday comparable store sales up 2.0 percent at cons

--> No pre-market yet

Zale announces overall holiday comparable store sales up 2.0 percent at constant exchange rates; sees Q2 gross margin of 52.6%

  • Co announced that comparable store sales increased 2.0 percent at constant exchange rates, or 0.7 percent on a U.S. dollar reported basis, for the combined months of November and December 2013.
  • Revenues for the two-month period were $556 million compared to $567 million in the same period last year. The decrease in revenues is primarily due to the net decrease of 91 stores compared to last year and a decline in the Canadian exchange rate, partially offset by the two percent constant currency comparable store sales growth.
  • "During the holiday period, we maintained our focus on increasing exclusive product penetration, driving gross margin improvement and building our core national brands... We executed a solid holiday season despite a challenging retail environment. Our holiday performance gives us confidence we can achieve our financial expectations for the fiscal year."
  • For the quarter ending January 31, 2014, the company expects gross margin to be approximately 52.6%, or 200 basis points higher than the prior year quarter. This improvement is primarily the result of efficiencies gained from our merchandise sourcing program, discipline around promotional activities and a favorable commodity cost environment. Operating margin is expected to be approximately 8.6 percent, or 100 basis points higher than the prior year quarter.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: ICPT +28.7%, ANF +15.9%, CNAT +14.8%, BLDP +14.4%, KIN +12.2%, IMMU +12%, PLUG +11.4%, SNTA +9.6%, IMUC +8.8%, GALE +7.4%, ANGO +5.7%, INFY +3.3%, HIIQ +3.3%, NBIX +3.1%, SQNM +2.3%, GPS +2.2%, AEHR +2.2%, BBRY +2.1%, HELE +1.9%, MNKD +1%

Gapping down: YRCW -18.6%, FIVE -15.7%, SHLD -13.8%, AEGR -13.2%, PSUN -12.5%, CERE -12.1%, NRP -11.5%, PRGS -10.3%, CUDA -9.6%, WYY -6.8%, SCVL -6.7%, AA -6.5%, EOPN -6%, FNP -3.5%, SNE -3.2%, SNX -3.2%, MTH -2.6%, BALT -2.4%, PWRD -2.4%, PSMT -2.4%, RBS -1.7%, JCP -1.4%, ALU -1.1%, SI -1%, HUM -1%

(Exane) Firework Season is over - Long SG,Buy Natixis on weakness...

*No big surprises
French banks’ Q4 results will be followed (and are therefore likely to be eclipsed) by their capital markets days (see Sober ambitions). Divisional targets will be useful but we believe that the most significant targets have already been largely announced: 1) ET1 targets of 9.5% (CA) to 10% (BNPP, SG); 2) pay-out targets of 35% at CA, ‘a little more than 30–40%’ at BNPP (say 35–45%), 35–50% at SG and 50% at Natixis; 3) ROE of 10% at SG, probably 10–11% at BNPP. For CA a level of c. 12% ROTE is the most likely. Our recent visit to French banks suggests that surprises on these key targets are unlikely.

*Q4 is usually on the weak side
We do not believe that French banks’ CIB divisions will have been particularly impressive: client activities are always more subdued in Q4 and lending activities may have slowed due to the weak economy, margin pressure and the festive season. However, market parameters remained strong (spreads tightening, market levels higher and volatility at a favourable level) probably favouring SG vs peers. Costs and provisions are usually seasonally high in Q4 and may also be impacted by restructuring (BNPP, Natixis). Finally the USD weakness (down c. 5% QoQ) is likely to have impacted revenues (BNPP most exposed, but also Natixis due to its structured finance business).

*Stock calls: long SG, buy Natixis on weakness, CA: pause for breath
Likely underwhelming results at Natixis (Outperform) will not alter our conviction that the yield story will play out as we expect, i.e. c. 40% of market cap will be returned to shareholders by end 2017. The Coface IPO could release 60bp of capital in H1 14 and could prove a catalyst. SG (Outperform) should have a decent Q4 in CIB, and also, we believe, no accidents on the cost of risk in France, both sensitive items. These should help to more than offset a potential poor cost of risk in Romania. Following CA’s sharp bounce YTD (+3% relative) we believe that delivery is now needed on capital improvement.

>>> SWS : Hilltop Holdings (24% holder) Proposes To Acquire SWS Group for $7.00/

SWS Group Inc. Hilltop Holdings (24% holder) Proposes To Acquire SWS Group for $7.00/shr
- Hilltop Holdings submitted a written proposal to the SWS Group's board to acquire all of the outstanding shares of SWS that it does not already own for $7.00 per share in 50% cash and 50% Hilltop common stock. In 2011, Hilltop invested $50 million in SWS in the form of a senior unsecured loan. At the time of Hilltops investment, Hilltops Chairman, Gerald J. Ford, joined the Board of Directors of SWS and Hilltops President and Chief Executive Officer, Jeremy B. Ford, became a non-voting observer to the SWS board. In conjunction with Hilltops investment in SWS, SWS issued Hilltop a warrant to purchase 8,695,652 common shares of SWS at an exercise price of $5.75 per share. Hilltop currently beneficially owns 24% of SWS common stock, inclusive of the warrant.

(NY Post) Starz sees slew of suitors almost a year after spinoff

Chris Albrecht’s premium movie and TV service, Starz, marks one year as a standalone company next week — and there’s renewed gossip about whether it will soon be eyeing a suitor this year.
Wall Street analysts love the stock, which has risen 115 percent during the past 12 months.
“The stock has done amazing,” Amy Yong, cable and satellite analyst with Macquarie Capital, told The Post. “The free cash flow, it’s an under-penetrated asset, it’s got [John Malone] backing and there are M&A aspects.”
Starz is barred from holding sales talks for a year since it was spun off (by Liberty Media), sources said.
The most obvious suitor for Starz is Cablevision CEO James Dolan, sources suggested, though other names continually crop up — like CBS, Viacom and 21st Century Fox.
Dolan has long held talks with Liberty Media — chaired by John Malone — over what might happen with Starz, several sources said, but the question is whether Dolan-controlled AMC Networks is a good fit.
AMC Networks’ recent $1 billion acquisition of Liberty Global’s Chellomedia may have killed much of its ability to make a play for Starz, one source said.
The pay-TV service is now in 22 million homes and has added subscribers — thanks to new promotions from Time Warner Cable — even while losing a massive content deal with Disney.
Starz loses Disney content at the end of 2015.
The company has said it will replace the Disney content in part with original content.
Michael Bay-produced “Black Sails,” a pirate drama, is set to debut Jan. 25.
The firm also did a major deal with Fox TV Distribution mid-year.
“There’s not an obvious combination that’s bigger than the sum of the parts,” Vasily Karasyov, entertainment sector analyst at Sterne Agee, told The Post, adding that “revenue trends are improving and it’s still cheap and there’s upside to estimates.”

(Makor) Top Trading Ideas: LONG PUMA / SHORT ADIDAS (long bias)

Top Trading Ideas

PUMA (PUM GR) - upgrading back from HOLD to BUY following the latest 7% drop after we had cut our rating from buy to hold. Story is the same: margin turnaround, possible minority buyback, lagging Adidas and Nike. We recommend going long Puma, hedged with a short position in Adidas while maintaining a long bias. Refer to previous reports for details.

(Citi) European Chemicals Outlook 2014

Selective in better supplied environment; 
Buy AKE, DSM, Linde
Sell LXS, EVK, Solvay

--> Key Recommendations
Buy AKE, DSM, Linde; Sell LXS, EVK, Solvay. We believe stocks with specific drivers beyond sensitivity to the improving macroeconomy that trade below peer group averages are best placed to outperform.
Cyclical stocks in segments suffering overcapacity look least well placed.