Martha Stewart and Macy’s boss, Terry Lundgren, ended their legal battle on Thursday.
While terms of the legal truce were not released, Macy’s said it would continue to sell Martha-branded goods.
The news sent shares of Martha Stewart Living Omnimedia, the domestic diva’s publishing, media and marketing company, soaring 11 percent by midday — before it eased a bit to close at $4.57, up 8.8 percent.
“Martha Stewart Living Omnimedia and Macy’s have resolved their legal dispute and we are now pleased to be able to put this matter behind us,” MSLO said in a statement.
The settlement was “not deemed material” to MSLO, and most expect it means that the contract that runs through 2018 stays in place.
Michael Kupinski, director of research at Noble Financial, has a $5-a-share price target on the stock.
That price is still a long way from its peak of $37 — reached way back in 2005.
The ending of hostilities with Macy’s is considered a plus for Daniel Dienst, the scrap metals executive who became CEO of MSLO in late October. There are some observers who think the troubled company that laid off nearly 100 people two weeks before Christmas is not out of the woods.
“I anticipate that there will be additional layoffs,” said Kupinski. “I’d look for another 40 to 50 people — mostly from the publishing side, but some from the corporate side.”
It may not be enough to appease all of the company’s critics.
“It’s had sales declines pretty much nonstop since 2008,” said Craig Sterling, global head of equity research at EVA Dimensions. “It is still one of the worst-run companies in our industry. We just can’t get over that.”
“They do well with merchandising, but their publishing division is a disaster,” said Sterling, who has a sell recommendation on the shares.
“It is one of the worst retailers ever,” said Sterling. “No retailer has done what they are doing and lived to tell about it. I’m surprised an activist investor does not come in.”
In the third quarter, ended Sept. 30, MSLO reported a 16 percent decline in revenue.
Macy’s is still battling with JCPenney on the deal that Stewart signed with the Macy’s rival behind Lundgren’s back.