>>> MERU US - Agrees to be acquired by Fortinet at $1.63/shr in cash; valued at

Meru Networks - Agrees to be acquired by Fortinet at $1.63/shr in cash; valued at $44M 
- The acquisition is expected to close during the third quarter of calendar year 2015, subject to customary closing conditions. Fortinet expects the transaction to have no material impact on billings, revenue, operating margins or non-GAAP profitability for the full year 2015.
- For the full year ended December, 2014, Meru reported revenue of $90.9 million.
- The acquisition is synergistic with Fortinet's secure wireless vision and enterprise growth focus, broadens the company's solutions portfolio, and expands its opportunity to uniquely address the $5B global enterprise Wi-Fi market(1) with integrated and intelligent secure wireless solutions. Leading the trend to provide broad security for wired and wireless networks and devices, Fortinet also announced today a new FortiGuard mobile security subscription service to protect mobile devices and applications across the enterprise

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: KORS -9.7%, WDAY -8.6%, CHS -6.1%, VNET -4.9%, FWM -4.5%, IG -2.8%, MY -1.1%

Select metals/mining stocks trading lower: HMY -2.7%, AU -2.3%, DRD -1.7%, IAG -1%


Other news: COT -3.4% (announced a bought-deal offering to underwriters led by CIBC and Barclays, of 14.1 mln common shares at $9.25/share, for proceeds of ~$130.4 mln), VPCO -3.3% (received deficiency letter from Nasdaq), KATE -2.2% (in sympathy with KORS), PLAY -2.1% (announced a secondary offering of 8.5 mln shares of common stock, by selling stockholders),FEYE -1.8% (announced a $600 million convertible notes offering)

Analyst comments: CHKP -2.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley), COH -1.6% (initiated with an Underweight at BB&T Capital Mkts
)

>>> Michael Kors on Conference Call - more - -14.25% RPe -open

Michael Kors on Conference Call

  • Expects continued FX headwinds (Euro, Canadian dollar and yen are largest currency exposures).
  • Notes investments in growth will provide pressure on Q1 margins.
  • Expects FX headwinds to diminish over the course of the year.
  • Rate of spend will slow in the back half of 2016; will lead to improved operating margins.
  • Going forward, will report comp store sales on a global basis.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: TIF +6.4%, EHIC +5.1%, TIVO +4.1%, NMBL +2%, MOV +1.7%, DSW +0.9%

M&A news: HRL +4.9% (to acquire prepared meats provider Applegate, for $775 mln; with expected EPS accretion of $0.07-0.08/share in 2016), TIVO +4.7% (acquired Cubiware, a provider of cost-effective software solutions for emerging market Pay-TV operators; co also reported earnings), NOK +1.5% (has acquired Eden Rock Communications, a provider of Self Organizing Network solutions)

Other news: EOX +76% (co elected not to proceed with public offering of common stock; reiterates previously announced 2015 guidance for CapEx of $65 mln), XBIT +18.2% (announced it has successfully isolated and cloned an anti-Ebola product candidate using its True Human antibody discovery platform), RSYS +18.1% (announced follow-on order of ~$11 mln for MediaEngine product from a large Asian carrier), NSPH +11.3% (Perella Weinberg Partners Capital Management disclosed 9.3% passive stake in 13G filing; SWK Holdings Corporation disclosed 6.4% passive stake in 13G filing), RTRX +11.1% (agrees to sell priority review voucher to Sanofi (SNY)), OXGN +10.9% (announced issuance of a U.S. patent for OXi4503 in acute myeloid leukemia),CBLI +10.8% (attributed to positive story ahead of the co's entolimod presentation on 5/30 at ASCO Conference), GALE +7% (announces two abstract publications at the ASCO 2015 Annual Meeting), JMEI +5.2% (to host a conference call at 08:30 AM ET today to discuss changes in import tariffs on cross border beauty product sales), NBG +4% (cont volatility surrounding Greece default), ALU +3.4% (in sympathy with NOK), HA +3.3% (to replace OZRK in the S&P SmallCap 600), PLUG +3.1% (announces a master sales agreement with a large footwear manufacturer in North America), FXCM +2.5% (cont strength), ZSPH +2.3% (submitted an NDA to the U.S. FDA for ZS-9, to treat Hyperkalemia), YELP +1.2% (Eminence Capital discloses 5.1% passive stake in 13G filing), ABBV +0.9% (discloses entry into an accelerated share repurchase agreement with Morgan Stanley to repurchase $5 bln of common stock)

Analyst comments: OPXA +31.6% (initiated with a Buy at Maxim Group; tgt $5), FTR +5.7% (upgraded to Overweight from Underweight at Morgan Stanley), FRO +3.2% (upgraded to Equal-Weight from Underweight at Morgan Stanley), HDP +1.9% (initiated with an Outperform at Oppenheimer ), RAD +1.9% (initiated with a Buy at Mizuho), CX +1.5% (upgraded to Buy from Neutral at Longbow), MPC +1.3% (upgraded to Outperform from Perform at Oppenheimer), ULTA +1% (initiated with a Buy at Buckingham Research), DFT +0.9% (upgraded to Outperform from Neutral at Macquarie)

>>> Michael Kors on Conference Call -->-13.25% Pre- Market

Michael Kors on Conference Call

  • China and Southeast Asia were two of the stronger markets for the co.
  • Sees ample opportunity to drive double digit top line growth through multiple channels; expect N. American digital flagship to drive strong double digit gains; will launch flagship digitals in Europe and Asia; Sees e-commerce reaching 20% of sales over long term.
  • Continues to see the potential for 700 stores globally.
  • Sees moderate same store sales growth driving top line.
  • Wholesale sees continued momentum.
  • Will continue to invest in marketing programs.
  • Sees opportunity in footwear and women's wear; Views Menswear as potential billion dollar segment.
  • Jewelry, fragrance, and eyewear also represent opportunity.
  • Sees Europe as a $1.5 bln and Japan $300 mln and Korea $100 mln markets; will strengthen across Asia through regional licenses.
  • Sees double digit top and bottom line growth in FY17.

>>> Tiffany & Co beats by $0.11, beats on revs; reaffirms FY16 guidance

--> TIF +6.35% in pre-markt

Tiffany & Co beats by $0.11, beats on revs; reaffirms FY16 guidance

  • Reports Q1 (Apr) earnings of $0.81 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.70; revenues fell 4.9% year/year to $962 mln vs the $918.83 mln consensus. Gross margin (gross profit as a percentage of net sales) increased to 59.1% from 58.2% in last year's first quarter.
  • Co reaffirms guidance for FY16, sees EPS of minimal growth from $4.20 last year vs. $4.17 Capital IQ Consensus Estimate. This forecast anticipates net earnings in the second quarter declining at a more moderate rate than in the first quarter, followed by expected double-digit percentage net earnings growth in the second half of the year. This forecast reflects no material changes from the previously-disclosed (on March 20, 2015) assumptions for sales growth, store openings, earnings from operations, interest and other expenses, net, the effective tax rate, net inventories, capital expenditures and free cash flow, all of which are approximate and may or may not prove valid.... "we believe we can return to a healthier rate of double-digit EPS growth over the long-term."
  • In the Americas, on a constant-exchange-rate basis total sales rose 3% and comparable store sales were 1% above the prior year. In the Asia-Pacific region, sales on a constant-exchange-rate basis increased 4% in total and 2% on a comparable store basis. In Japan, on a constant-exchange-rate basis total sales declined 18% and comparable store sales declined 24%.

>>> Michael Kors misses by $0.01, reports revs in-line; guides Q1, FY16 EPS and

--> KORS -9.8% Pre-Market

Michael Kors misses by $0.01, reports revs in-line; guides Q1, FY16 EPS and rev below consensus

Reports Q4 (Mar) earnings of $0.90 per share, $0.01 worse than the Capital IQ Consensus of $0.91; revenues rose 17.8% year/year to $1.08 bln vs the $1.08 bln consensus.
  • Retail net sales increased 14.9% to $469.4 million driven by 121 net new store openings since the end of the fourth quarter of fiscal 2014 and e-commerce sales from the recently launched U.S. e-commerce site, partially offset by a 5.8% decrease in comparable store sales. On a constant currency basis, retail net sales grew 21.1%, and comparable store sales decreased 1.7%.
Co issues downside guidance for Q1, sees EPS of $0.74-0.78 vs. $1.03 Capital IQ Consensus; sees Q1 revs of $930-950 mln vs. $1.09 bln Capital IQ Consensus.
  • On a constant currency basis, total revenue is expected to increase in the high single digit range assuming a $60 million impact from the change in foreign currency rates. The Company expects a low double digit comparable store sales decrease on a reported basis and a mid-single digit decrease on a constant currency basis. Operating expense as a percentage of total revenue is expected to increase 550 to 600 basis points primarily due to global investments in our digital flagship, corporate talent, new stores, shop-in-shops, infrastructure and distribution.
Co issues downside guidance for FY16, sees EPS of $4.40-4.50 vs. $4.71 Capital IQ Consensus; sees FY16 revs of $4.7-4.8 bln vs. $5.04 bln Capital IQ Consensus.
  • On a constant currency basis total revenue is expected to increase in the low to mid-teens range assuming a $200 million impact from the change in foreign currency rates. The Company expects flat comparable store sales on a reported basis, and a low single digit comparable store sales increase on a constant currency basis. Operating expense as a percentage of total revenue is expected to increase 110 to 140 basis points due to the above mentioned investments with less deleverage assumed in the second half than in the first half of fiscal 2016.