Business

Confidence is contagious. Someone declaring a position with ringing certainty is more likely to inspire than someone who hedges their bets. “We may fight them on the beaches; it depends a bit on the weather,” would have been a lot less persuasive. What is true of Churchill’s wartime oratory is true in less dramatic circumstances. A study by Matthias Brauer of the University of Mannheim and his co-authors analysed language used in letters from activist investors; it found that more confident letters were associated with more successful activist campaigns. More

Vimal Kapur, the boss of Honeywell, should have seen it coming. Industrial conglomerates like his have long been out of fashion. Between the beginning of June last year, when Mr Kapur took over at Honeywell, and November 11th the firm’s shares had risen by just 16%, compared with 46% for industrial companies in America’s S&P 500 index. On November 12th Elliott Management, a feared activist investor run by Paul Singer, announced it had taken a $5bn stake in the company, probably its largest ever such position, and called for Honeywell to break itself up. Investors seemed pleased with the idea, sending Honeywell’s shares up by 4% on the day of the announcement. More

A spectre hangs over Baku, the capital of Azerbaijan, where diplomats, scientists and activists are gathered for the UN’s annual climate-change summit. Last time he was in office Donald Trump, a fossil-fuel booster and climate-science denier, yanked America out of the UN’s Paris climate agreement (it later rejoined). The president-elect has vowed to do so again on his first day back in office. More

The origin of On, a Swiss sportswear brand, is unusual. In 2010 Olivier Bernhard, a triathlete, stuck bits of garden hose to the bottom of his trainers for added cushioning. The idea worked so well that he and two friends decided to make a business out of it. Their shoes were a hit; last year the company made almost $2bn in sales. On November 12th it reported that its revenue in the quarter to September grew by 32%, year on year. On now has a market value of $17bn. More

TSMC is riding high. The Taiwanese chipmaker—sole supplier of artificial-intelligence (AI) chips to Nvidia, the world’s most valuable chip designer—has seen sales more than double since the start of 2020. While other semiconductor firms fret about cooling demand for gadgets and cars, TSMC believes demand for AI is just gearing up. Investors agree, propelling its market capitalisation towards $1trn and into the world’s ten most valuable firms. More

Corporate America has at least one big thing to celebrate about the presidential election: it has erased the possibility of a rise in the country’s corporate-tax rate, as had been proposed by Democrats. Weighed against the cost of tariffs—and more abstract concerns about the health of America’s institutions—the promise of lower taxes and deregulation warmed bosses to Donald Trump during the campaign. Shareholders, who stand to benefit directly, rejoiced at Mr Trump’s victory, sending the S&P 500 index of American stocks to a record high. More

Tapestry and Capri have mutually agreed to call of their merger.
The parent companies behind Coach and Michael Kors saw their proposed merger blocked by the Federal Trade Commission.
In October, Tapestry said it would appeal the ruling.

Pedestrians walk past a Michael Kors store on August 10, 2023 in Chicago, Illinois. 
Scott Olson | Getty Images

Capri and Tapestry called off their merger on Thursday after the Federal Trade Commission successfully sued to block the megadeal.
The two U.S.-based luxury houses “mutually agreed” that terminating the merger was in their best interests as they were unlikely to get regulatory approval before the deal was set to expire in February, according to a news release.

“With the termination of the merger agreement, we are now focusing on the future of Capri and our three iconic luxury houses,” Capri CEO John Idol said in a statement. “Looking ahead, I remain confident in Capri’s long-term growth potential for numerous reasons.”
The $8.5 billion acquisition, originally announced in August 2023, would have married America’s two largest luxury houses and put six fashion brands under one company: Tapestry’s Coach, Kate Spade and Stuart Weitzman with Capri’s Versace, Jimmy Choo and Michael Kors. 
In April, the FTC sued to block the deal, saying the tie-up would disadvantage consumers and reduce benefits for the companies’ employees. Last month, a federal judge ruled in the FTC’s favor and granted its motion for a preliminary injunction to block the proposed merger.
At the time, Tapestry said it would appeal the ruling.
In its own news release Thursday, Tapestry said it doesn’t need Capri to continue growing and will use the cash it’s freed up to fund an additional $2 billion share repurchase authorization.

“We have always had multiple paths to growth and our decision today clarifies the forward strategy. Building on our successful first quarter, we will move with speed and boldness to accelerate growth for our organic business,” CEO Joanne Crevoiserat said in a statement.
Tapestry plans to fund the stock repurchase through a combination of cash on hand and debt. 
The company said Thursday “there is no break fee associated with the transaction,” but under the terms of the merger agreement, Tapestry had agreed to pay Capri for its expenses if the deal failed to earn regulatory approval. Tapestry said it will reimburse Capri around $45 million.

Jimmy Choo, Michael Kors, and Versace stores on Rodeo Drive in Beverly Hills, California, US, on Thursday, April 18, 2024. 
Eric Thayer | Bloomberg | Getty Images

Recently, Wall Street analysts had begun to sour on the merger, saying Tapestry was poised to overpay for Capri considering the lengthy approval process and how much Capri’s business had declined.
In the initial aftermath of the judge’s ruling, shares of Capri plunged around 50% while Tapestry’s stock surged about 10%. On Thursday, Tapestry shares were more than 7% higher in premarket trading while Capri’s were down around more than 5%.
Capri is slated to have a call with analysts at 11 a.m. ET to discuss the decision and its strategies to return to growth and fix its most important brand, Michael Kors, which has been grappling with a long decline in sales.
“Given our Company’s performance over the past 18 months, we have recently started to implement a number of strategic initiatives to return our luxury houses to growth,” Idol said in a news release. “Across Versace, Jimmy Choo and Michael Kors, we are focused on brand desirability through exciting communication, compelling product and omni-channel consumer experience. While our strategies are tailored uniquely for each brand, our overarching goals are similar.”

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Disney reported its fiscal fourth-quarter earnings Thursday.
Revenue for the entertainment segment – which includes the traditional TV networks,  direct-to-consumer streaming and films – increased 14% year over year.
Revenue for Disney’s sports segment, made up primarily of ESPN, was flat.

A statue of Walt Disney and Mickey Mouse stands in a garden in front of Cinderella’s Castle at the Magic Kingdom Park at Walt Disney World on May 31, 2024, in Orlando, Florida.
Gary Hershorn | Corbis News | Getty Images

Disney reported its fiscal fourth-quarter earnings Thursday, narrowly beating analyst estimates as streaming growth helped propel its entertainment segment. 
Here is what Disney reported compared with what Wall Street expected, according to LSEG

Earnings per share: $1.14 adjusted vs. $1.10 expected
Revenue: $22.57 billion vs. $22.45 billion expected

Disney’s net income increased to $460 million, or 25 cents per share, from $264 million, or 14 cents per share, during the same quarter last year. Adjusting for one-time items, including restructuring and impairment charges, Disney reported earnings per share of $1.14. 
Total segment operating income increased 23% to $3.66 billion compared with the same period in 2023.  
Revenue for the entertainment segment – which includes the traditional TV networks,  direct-to-consumer streaming and films – increased 14% year over year to $10.83 billion after a hot summer at the box office.
Disney Pixar’s “Inside Out 2” became the highest-grossing animated movie of all time this summer, surpassing Disney’s “Frozen II” at the box office. Meanwhile, its “Deadpool & Wolverine” became the highest-grossing R-rated film of all time, surpassing Warner Bros. Discovery’s “Joker.”
The films added $316 million of profit for the entertainment segment during the quarter. Overall, the entertainment segment reported nearly $1.1 billion in profit.

Revenue for Disney’s sports segment, made up primarily of ESPN, was flat. ESPN’s profit fell 6% due in part to higher programming costs associated with U.S. college football rights as well as fewer customers in the cable bundle. 
Disney’s combined streaming business, which includes Disney+, Hulu and ESPN+, saw profitability improve during the quarter after turning its first profit during the fiscal third quarter, three months earlier than expected. The division reported an operating income of $321 million for the September period compared with a loss of $387 million during the same period last year. 
Disney joined its peers, including Warner Bros. Discovery, Netflix, Comcast and Paramount Global in adding streaming subscribers during the most recent quarter. 
Disney+ Core subscribers – which excludes Disney+ Hotstar in India and other countries in the region – grew by 4.4 million, or 4%, to 122.7 million. Hulu subscribers grew 2% to 52 million. 
Average revenue per user for domestic Disney+ customers dropped from $7.74 to $7.70, as the company had a higher mix of customers on its cheaper, ad-supported tier and wholesale offerings. 
Meanwhile the company’s traditional TV networks business continued to decline as consumers leave pay TV bundles behind in favor of streaming. Revenue for the networks was down 6% to $2.46 billion. Profit for the segment sank 38% to $498 million. 
The experiences segment, which includes Disney’s theme parks as well as consumer products, saw revenue grow 1% to $8.24 billion. 
The domestic parks’ operating income rose 5% to $847 million, helped by higher guest spending at the parks and cruise lines. 
Operating income at the international parks, however, fell 32% due to a decline in attendance and in guest spending as well as increased costs. 
The company said Thursday it’s “confident in the long-term prospects for the business,” and provided an outlook that includes its fiscal 2025, 2026 and 2027.
Disney expects a “modest decline” in Disney+ Core subscribers during the fiscal first quarter of 2025 compared with the prior quarter.
Full-year profit in the entertainment streaming business, which excludes ESPN+, is expected to see an increase of roughly $875 million compared to the prior fiscal year and to increase by a double digit percentage in its fiscal 2026.
Disney also anticipates double-digit percentage growth in fiscal 2025 for its entertainment segment.
The experience segment, however, is expected to see just 6% to 8% profit growth in the coming fiscal year compared to the prior year. Disney noted the fiscal first quarter will see a $130 million hit due to the impact of Hurricanes Helene and Milton, as well as a $90 million impact from Disney Cruise Line pre-launch costs.
During Disney’s fiscal 2025, the company expects high-single digit adjusted earnings growth compared to the prior fiscal year. The company expects double digit adjusted EPS growth in both fiscal 2026 and 2027.
This story is developing. Please check back for updates. More