Morgan Stanley analyst Kimberly Greenberger said her checks on specialty retail and department stores' traffic showed that it decelerated to a decline of 10.7% year-over-year in the third week of December, leaving her to lower her estimate of the Q4 to-date result to down 7.4% year-over-year. Traffic appeared "solid" during her store checks at the end of December week four, but a tough comparison to last year in week five leaves her "overall cautious" on the traffic view for the month, Greenberger tells investors. Looking at specific retailers, Greenberger said she found that clearance levels ticked slightly higher year-over year at only Kohl's (KSS) and L Brands' (LB) Victoria's Secret, ,while post-Christmas clearance moderated at Abercrombie & Fitch (ANF) and Macy's (M) compared to last year. She also found that clearance depth increased year-over-year for both of Tapestry's (TPR) Coach and Kate Spade brands.

Bullish option flow detected in Abercrombie & Fitch with 2,715 calls trading, 1.2x expected, and implied vol increasing almost 2 points to 57.10%. 4/26 weekly 103 calls and 5/3 weekly 103 calls are the most active options, with total volume in those strikes near 800 contracts. The Put/Call Ratio is 0.52. Earnings are expected on May 29th.

Capri Holdings (CPRI) shares could fall to the low-to-mid $20s if Tapestry's (TPR) $57 per share takeover is successfully blocked by the Federal Trade Commission, Yiqin Shen of Bloomberg reports, citing a survey of 20 merger-arbitrage specialists. The survey, conducted on Tuesday, focuses on merger-arbitrage estimates on the Capri's downside price - a level that reflects the stock's fundamental value by the end of 2024, when the outcome of the FTC's challenge is expected to be either upheld or overturned in court, Shen notes. Shares of Capri Holdings are down 5% to $34.81 in midday trading.