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SRG's Flickinger on Amazon: Harvesting Capex (Correct)(Audio) · Bloomberg Intelligence

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  Speaker 1: This is taking stock with PIM Fox and Kathleen Hayes
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  Speaker 1: on Bloomberg Radio. Amazon it beat on earnings per share
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  Speaker 1: buck seventy eight versus an estimated dollar twelve cents to share.
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  Speaker 1: It beat on second quarter net sales. The estimate was
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  Speaker 1: twenty nine a half billion that came at thirty point four.
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  Speaker 1: But it sees its third quarter operating income at fifty
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  Speaker 1: million to six hundred fifty million versus an estimated eight
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  Speaker 1: hundred fifteen million, So the share price is now down.
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  Speaker 1: Bert Flickinger joins us now managing director at Strategic Resource
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  Speaker 1: Group here in New York City, also in our New
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  Speaker 1: York studio. To look at the numbers, Bird, what do
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  Speaker 1: you think so far? Amazon's numbers are phenomenal, Kathleen and
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  Speaker 1: PIM revenue increased thirty one percent last last year to
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  Speaker 1: date revenue increase work. They're dominating the developed world quicker
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  Speaker 1: than Genghis Khan or anyone from Series and Robot to
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  Speaker 1: Sam Wall never ever did uh the The earnings per
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  Speaker 1: share are terrific. The one concerned people have in the
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  Speaker 1: aftermarket is Amazon's being conservative on guidance. But Amazon is
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  Speaker 1: always conservative on future guidance. Bert Flickinger, Who's Amazon gonna
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  Speaker 1: put out of business? Next? Amazon's not gonna put Walmart
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  Speaker 1: dot Com out of business, but neither Walmart dot Com
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  Speaker 1: nor anyone else can catch up. So, PAM, you're looking
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  Speaker 1: at everyone from dollar stores to discount stores, to grocery
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  Speaker 1: stores to fashion, specialty and accessory stores going out of
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  Speaker 1: business worldwide. Everybody's looking to save more money with price discovery. Uh,
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  Speaker 1: save more for Amazon. Uh. Students, seniors, working class are
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  Speaker 1: getting crushed economically. Amazon's a solution to raise everyone's standard
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  Speaker 1: of living. Wow, that's a very bold statement. That's a
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  Speaker 1: solution that brace everyone's standard of living. You have to
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  Speaker 1: whether it's the students I teach at Cornell University who
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  Speaker 1: come from around the world, or it's it's it's people
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  Speaker 1: in all walks of life that we're talking to, whether
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  Speaker 1: it's in the Middle East, Europe, Asia, or the America's
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  Speaker 1: um working people's students, seniors need a bargain better on
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  Speaker 1: get those in in brick and mortar. I see bargains
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  Speaker 1: all over the place where they're they're bargains all over,
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  Speaker 1: But there's Amazon provides the depth and range of assortment, free,
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  Speaker 1: free delivery, great styles and colors matching, and in many
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  Speaker 1: states and provinces no sales tax. So with with Amazon,
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  Speaker 1: it's a great solution. To your point, people still go
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  Speaker 1: to go to stores for UH style and and fit.
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  Speaker 1: But one of the things that's really really hurting all
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  Speaker 1: the malls is the mediocre creative that's coming out of
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  Speaker 1: the Hollywood studios. So customer counts are down in the
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  Speaker 1: malls into pimps present point. With more and more bricks
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  Speaker 1: based retailers going out of business, that's killing the customer
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  Speaker 1: counts even for the successful retailers. So everybody in shopping
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  Speaker 1: malls and centers are suffering. In Amazon's capitalizing, well, just
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  Speaker 1: to give you this comparison, right, if you take a
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  Speaker 1: look at the sales of Amazon there on a run
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  Speaker 1: rate to do about a hundred and twenty billion a year, right,
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  Speaker 1: Walmart run rate about four hundred and eighty right billion.
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  Speaker 1: If you take a look at the market cap though,
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  Speaker 1: market cap of Walmart two hundred and twenty eight billion
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  Speaker 1: dollars market cap of Amazon three hundred and fifty five
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  Speaker 1: billion dollars. There win in the war as far as
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  Speaker 1: market capitalization, what people think the company is worth. Think
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  Speaker 1: what it's worth and look at well managed companies like
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  Speaker 1: Macy's Bloomingdale's to your point of growth PIM Macy's Bloomingdale's
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  Speaker 1: is about twenty five billion combined. That's what Amazon is
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  Speaker 1: adding in new sales every year. Chain the size of
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  Speaker 1: Macy's and Bloomingdale's. And Macy's and Bloomingdale's is dominant in
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  Speaker 1: department stores worldwide by far the biggest. Best. Do you
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  Speaker 1: buy Amazon stock now? I would, Kathleen. Amazon's blown through
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  Speaker 1: both both my annual estimates, the less a few years
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  Speaker 1: two years ago at this time I predicted from five
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  Speaker 1: fifty to six fifty. When it was at six hundred,
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  Speaker 1: I predicted seven fifty at this point, see it being
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  Speaker 1: unstoppable both competitively and economically to at least eight hundred.
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  Speaker 1: Full disclosure, own own Amazon and will continue to own
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  Speaker 1: Amazon's long term holding. I just mentioned that the shares
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  Speaker 1: of Amazon are higher right now by nearly five percent
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  Speaker 1: in after hours trading. But one more thing on on Amazon,
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  Speaker 1: the web services division. I know you're not a tech geek,
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  Speaker 1: at least you don't play one on radio, war on television,
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  Speaker 1: but Amazon Web Services. We were just talking with Roger
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  Speaker 1: mcmeee the deal nine point three billion dollars Oracle buying
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  Speaker 1: net Suite. This is a big and growing business for
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  Speaker 1: Amazon that other retailers don't seem to have. Pammy right
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  Speaker 1: A w S or Amazon Web Services is a phenomenal business.
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  Speaker 1: It's nine percent of Amazon currently, the segment of the
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  Speaker 1: markets growing by over three hundred billion dollars per year,
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  Speaker 1: and Amazon's leader fire ahead of Google, fire ahead of IBM,
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  Speaker 1: Oracle everyone else. So in terms of the catch up factor,
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  Speaker 1: does anybody catch up with Amazon? Now? Is there any
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  Speaker 1: hope Kathleen, Amazon's unstoppable past president in future because Jeff
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  Speaker 1: Bezos had the great strategic vision to invest maximum capex
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  Speaker 1: for decades. Uh, It's something the Roman Empire did its
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  Speaker 1: first two hundred years, and there been long term Roman
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  Speaker 1: empires of retailing, but no one's committed the capex, whether
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  Speaker 1: it's the Walden family at Walmart nor anyone else. So, Uh,
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  Speaker 1: Amazon is going to continue to grow, harvesting it's its capex,
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  Speaker 1: and its competitors don't have the balance sheets to beat Amazon,
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  Speaker 1: Thank you very much. Bert Flickinger, he is managing director
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  Speaker 1: of Strategic Resource Group. Shares of Amazon up nearly five
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  Speaker 1: percent in after hours trading, after reporting second quarter earnings
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  Speaker 1: and revenue that exceeded estimates. This is Bloomberg