Stocks Tick Higher After Key Inflation Data; Netflix To Buy Warner Bros. in $83B Deal

Victoria’s Secret Stock Pops on Better-than-Expected Results

9 minutes ago

Victoria’s Secret (VSCO) shares jumped on Friday after the lingerie retailer posted better-than-expected results and boosted its guidance as it cut back on promotions and raised prices.

The company reported a third-quarter loss of $0.46 per share, $0.13 lower than forecasts from Visible Alpha. Revenue increased 9.2% to $1.47 billion, also better than expected. Comparable store sales were up 5%. When including direct-to-consumer sales, they gained 8%.

Sales in North America increased 5.4% to $778 million, and direct-to-consumer sales rose 4.3% to $428.5 million. International sales jumped 33.5% to $264.8 million. 

CFO Scott Sekella said adjusted gross margin grew 170 basis points, “driven by a reduced promotional approach and higher regular-priced selling, while leveraging the strength of our business model.” Victoria’s Secret remains “focused on managing costs while prioritizing investments in product innovation, brand strength, and customer experience,” he said.

The company raised its outlook for full-year adjusted EPS to between $2.40 and $2.65, and revenue to $6.45 billion to $6.48 billion. Previously, it anticipated adjusted EPS of $1.80 to $2.20, and revenue of $6.33 billion to $6.41 billion.

Shares of Victoria’s Secret were up nearly 13% in recent trading, putting the stock’s year-to-date return at 13%.

-Bill McColl

What Trading After the Netflix-Warner Bros. Deal Tells Us

1 hr 5 min ago

One of the most closely watched bidding wars of the year is over—maybe.

Netflix (NFLX) on Friday agreed to buy the movie studio and streaming service of competitor Warner Bros. Discovery (WBD) in a deal valued at nearly $83 billion. The deal is expected to close after Warner Bros. Discovery spins off its cable division as a separate company in the third quarter of next year. When complete, Warner Bros. shareholders will receive $27.75 per share.

Netflix shares opened sharply lower on Friday morning before paring their losses to trade down less than 1%. The shares of an acquiring company often fall on news of a deal, because the acquirer usually pays a premium.

Shares of Warner Bros. Discovery climbed nearly 3%, but remained about $2 below the acquiring price, indicating investors see some risk the deal won’t go through. The White House and federal regulators have reportedly expressed opposition to the deal on the grounds it could make Netflix too dominant in streaming. 

Shares of Paramount Skydance (PSKY), Netflix’s top competition in the bidding war, were down 5% Friday morning. The company, formed earlier this year by the merger of Skydance Media and Paramount Global, on Thursday accused Warner Bros. Discovery of conducting an unfair bidding process. Paramount Skydance’s close ties to the White House—the company is run by the son of Larry Ellison, the tech mogul and prominent ally of President Donald Trump—could give it a shot at blocking the Netflix deal.

NBC parent company Comcast (CMCSA) also bid on Warner Bros., but was not seen as a serious contender in recent days. Its shares were up nearly 3% in recent trading.

Beyond the main parties, shares of AMC Entertainment (AMC) were down about 2% Friday. As part of the deal, Netflix promised to continue giving Warner Bros. films theatrical releases. Though investors in America’s largest movie theater chain may be concerned Netflix’s streaming-first DNA will inevitably change Warner Bros.’s theatrical strategy. Shares of Cinemark Holdings (CNK) were down 5% Friday. 

Netflix Wins Bidding War for Warner Bros. Discovery $83 Billion Deal

2 hr 8 min ago

The bidding war for Warner Bros. Discovery (WBD) is officially over, as the entertainment giant and Netflix (NFLX) announced an $83 billion deal Friday.

Warner Bros. Discovery plans to continue with its previously planned break-up, which will involve spinning off its cable TV channels, including CNN and TBS, into a standalone business, leaving the remaining studios that make TV and movies and the company’s streaming services to be acquired by Netflix for $27.75 per share. The companies expect the deal to close in the third quarter of next year.

Netflix co-CEO Ted Sarandos said Friday that combining with Warner Bros. Discovery will help both companies “define the next century of storytelling.”

Warner Bros. Discovery shares were little changed in premarket trading Friday, while Netflix shares fell 3.5% following the announcement.

Late Thursday night, reports emerged that Netflix and Warner Bros. Discovery had entered exclusive deal talks, with competing bidders Paramount Skydance (PSKY) and Comcast (CMCSA) looking to be out of the running.

The bidding war started earlier this year, when Paramount started to make offers to acquire all of Warner Bros. Discovery after the company completed its own merger with Skydance, owned by the Ellison family. Netflix and Comcast entered the running later.

Now, the deal could face regulatory scrutiny over whether it would make Netflix too dominant a player in streaming. Paramount has reportedly argued that the industry would become too consolidated by Netflix’s win.

-Aaron McDade

Stock Futures Tick Up Ahead of Inflation Data

3 hr 14 min ago

Futures contracts connected to the Dow Jones Industrial Average were up 0.1% in early trading.

S&P 500 futures were 0.2% higher.

Nasdaq 100 futures gained 0.3%.