Latest / Bloomberg Intelligence / BI Weekend: Nvidia, Retail Earnings Results

Transcript

BI Weekend: Nvidia, Retail Earnings Results · Bloomberg Intelligence

0:00
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
0:11
Speaker 1: with Paul Sweeney.
0:13
Speaker 2: The real app performance has been the US corporate high yield.
0:16
Speaker 2: These are two big time blue chip companies. One person's
0:20
Speaker 2: cast is another person's animal spirits.
0:22
Speaker 1: Breaking market headlines and corporate news from across the globe.
0:26
Speaker 3: Our viewer is if the economy is slowing down.
0:28
Speaker 2: There is the possibility of the death spiral.
0:30
Speaker 4: Full time competing in AI are going to power the future.
0:33
Speaker 1: People are just buying everything with Tex Bloomberg Intelligence with
0:36
Speaker 1: Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg Originals.
0:41
Speaker 3: I'm Paul Sweeney and I'm Scarlett Food filling in on
0:44
Speaker 3: Bloomberg Intelligence.
0:45
Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big
0:47
Speaker 2: business stories impacting Wall Street and the global markets.
0:49
Speaker 3: Each and every week we provide in depth research and
0:52
Speaker 3: data on some of the two thousand companies and one
0:54
Speaker 3: hundred and thirty industries are analysts covered worldwide.
0:56
Speaker 2: Today, we'll take a look at how the beverage make
0:58
Speaker 2: it Kirk doctor Pepper looking to strengthen its struggling coffee.
1:02
Speaker 3: Business, plus Echo Star agrees to sell spectrum licenses to
1:05
Speaker 3: at and T. We'll discuss what the deal means for
1:07
Speaker 3: the telecommunications companies, but.
1:09
Speaker 2: First we begin with earnings from the chip giant and video.
1:12
Speaker 2: This week, the world's most valuable publicly traded company reported
1:15
Speaker 2: second quarter earnings that beat an allo.
1:16
Speaker 3: Expectations, but investors were disappointed after in Vidia gave a
1:19
Speaker 3: lukewarm revenue forecast for the current quarter. And this is
1:23
Speaker 3: fueling concerns a massive run up and artificial intelligence spending
1:26
Speaker 3: is slowing.
1:27
Speaker 5: For more.
1:28
Speaker 2: Scarlet and I were joined by Ku John Sabani, Bloomberg
1:30
Speaker 2: Intelligence Senior semiconductor analysts, first to ask Kun John for
1:34
Speaker 2: his take on Invidious results.
1:36
Speaker 6: Yeah, like you said, it was once again a solid
1:38
Speaker 6: sprinting guide. It checked all the fundamental key boxes, but
1:43
Speaker 6: as has been the case with this name, you know,
1:46
Speaker 6: the expectations always run higher, and maybe not all the
1:49
Speaker 6: numbers were able to clear that high hurdle of expectations.
1:53
Speaker 6: Specifically the data center compute numbers in two Q. You
1:56
Speaker 6: would have liked to see that come in a little
1:58
Speaker 6: bit high, but there were still a lot of strong
2:01
Speaker 6: positive underlyings. One the networking was a significant beat, which
2:06
Speaker 6: shows the strength and the attachment that they're getting from
2:09
Speaker 6: their networking switches and chips in the Blackwell ramp. Second,
2:13
Speaker 6: like you mentioned, the three Q consensus had China included,
2:17
Speaker 6: and they still beat their three Q guide Without China.
2:20
Speaker 6: If you add in the China guide of two to
2:22
Speaker 6: five billion, they would have handsomely beaten the three Q numbers.
2:25
Speaker 6: So that noisy sort of consensus shadowed the goodness that
2:29
Speaker 6: is coming out of the guide of Nvidia.
2:32
Speaker 2: All right, so what's the company telling us now about China?
2:35
Speaker 2: Goes quite frankly, I just I'm reading the press. I
2:37
Speaker 2: don't know whether they're going to be able to sell
2:39
Speaker 2: stuff in the China or when, or whether they're gonna
2:41
Speaker 2: have to give a fifteen percent cut to the US government.
2:45
Speaker 2: How's that going to play out?
2:46
Speaker 6: Yeah, so China still remains, you know, after learning sort
2:49
Speaker 6: of that overhang in terms of uncertainty. The company did
2:54
Speaker 6: guide to a two to five billion revenues from the
2:57
Speaker 6: age twenty in China next quarter. Positive. That means they
3:01
Speaker 6: feel confident that they'll at least be able to ship
3:04
Speaker 6: some and get some of the revenues back. But yes,
3:08
Speaker 6: you know, the spark here for the China story will
3:11
Speaker 6: not appear until we have a clarity, and we believe
3:14
Speaker 6: until they have a blackwell version of a China chip,
3:17
Speaker 6: which they get approval from the government, that will end
3:20
Speaker 6: up really open up a massive amount of revenues coming
3:23
Speaker 6: from China. And there's a lot of hurdles you need
3:26
Speaker 6: to clear. Right there's the government, which has nothing to
3:28
Speaker 6: do with in media. The US China relationship needs to
3:31
Speaker 6: get sorted out because now even China can put in
3:33
Speaker 6: a roadblock from Nvidia selling or allowing their companies in
3:38
Speaker 6: China from buying in media chip. So there is work
3:41
Speaker 6: to be done. As you mentioned, the fifteen percent cut
3:44
Speaker 6: is not ironed out in terms of laws. There is
3:48
Speaker 6: we have heard new stories about potential lawsuits. So those
3:50
Speaker 6: two government and geopolitical angle needs to be cleared before
3:55
Speaker 6: we can start seeing billions of dollars of data center
3:58
Speaker 6: China revenue coming in.
4:00
Speaker 2: What's the competitive landscape here for these chip companies visa
4:03
Speaker 2: v in Nvidia and just kind of positioning for AI.
4:07
Speaker 2: I assume in Vidia's position A, who's kind of B
4:10
Speaker 2: and C.
4:11
Speaker 6: Yeah, So you know, the space is divided into two categories.
4:14
Speaker 6: One is the merchant GPUs, which is what in media
4:17
Speaker 6: sells and dominates that landscape. The sort of second competitor
4:22
Speaker 6: there or the b is AMD, which is a very
4:25
Speaker 6: far distant. You know, Nvidia today has about over ninety
4:29
Speaker 6: percent in terms of revenue share and the remaining is
4:32
Speaker 6: going to a very small to AMD. But there's another piece,
4:35
Speaker 6: which is we call what we call A six, which
4:38
Speaker 6: is what these big hyperscalers and cloud providers like Amazon
4:41
Speaker 6: and Google designed their own chips. So that's sort of
4:44
Speaker 6: the other competitive landscape where there's a risk of the
4:47
Speaker 6: A six taking sort of share away from merchant GPUs
4:51
Speaker 6: even though they don't compete directly for the same socket,
4:54
Speaker 6: they could take away the wallet share.
4:57
Speaker 2: And so does that mean companies like Nvidia have to
5:00
Speaker 2: pour money into R and D for that next chip
5:03
Speaker 2: to stay on front because I know in your business
5:06
Speaker 2: technology changes quickly.
5:09
Speaker 6: Yeah, definitely. I mean, look and Media has been even
5:12
Speaker 6: before the AI event happened, and Media has been the
5:14
Speaker 6: biggest R and D spender. They have continued and this
5:18
Speaker 6: is what really got them to the stage of being
5:20
Speaker 6: ahead of everyone else, and they have to continue spending
5:23
Speaker 6: out spending everyone else to sort of keep that lead.
5:26
Speaker 6: Their roadmap for the next two and a half years
5:28
Speaker 6: does suggest that they should be able to keep this
5:31
Speaker 6: lead handsomely, and for that it will definitely require high
5:34
Speaker 6: R and D spending.
5:35
Speaker 2: So this name to me who I'm used to stocks
5:38
Speaker 2: trading in much lower multiples in my world, But this
5:42
Speaker 2: seems like a stock that can actually earn its way,
5:44
Speaker 2: and we have seen it earn its way into its multiple.
5:48
Speaker 2: I mean, you can make an argument this is not
5:50
Speaker 2: an expensive stock.
5:51
Speaker 6: You're right. I mean, if you look at from a
5:55
Speaker 6: historical perspective, it's actually the multiple is much more lower
5:59
Speaker 6: than what we have seen in media trade in the
6:01
Speaker 6: past two years. So given that fact, and also when
6:04
Speaker 6: we look at the relative comparison, when you think about
6:07
Speaker 6: a company growing at fifty percent and making revenue in
6:10
Speaker 6: the hundreds of billions, that is unprecedented, especially growing with
6:15
Speaker 6: gross margins of seventy mits or low seventy percent. I mean,
6:18
Speaker 6: you're talking about a financial profile for software company, not
6:21
Speaker 6: a semic network company here. So definitely, when you take
6:24
Speaker 6: into those two things into account, it does seem that
6:28
Speaker 6: it might not be really highly valued.
6:30
Speaker 3: Our thanks to Kunjoan Shobani, Bloomberg Intelligence Senior semiconductor analyst,
6:35
Speaker 3: we move next to.
6:35
Speaker 2: The anti trust space as anti trust enforcement policies for
6:38
Speaker 2: President Donald Trump's administration takes shape, dealmakers and large businesses
6:42
Speaker 2: could see a glimmer of hope in some.
6:44
Speaker 3: Areas, and one area is Media. Last week, next to
6:47
Speaker 3: Our Media agreed to buy the TV station operator Tegna
6:49
Speaker 3: for three and a half billion dollars, and this deal
6:52
Speaker 3: will likely win FCC approval, according to Bloomberg Intelligence.
6:55
Speaker 2: For more guests, Alexis Christophers and I were joined by
6:59
Speaker 2: Jennifer ree Burg Intelligence senior litigation analyst. First asked jen
7:03
Speaker 2: if the next Star Tegni deal will be approved by
7:06
Speaker 2: the FCC.
7:07
Speaker 7: I think in the end yes, because the timing was right.
7:10
Speaker 7: You know, this isn't a deal. I think that these
7:12
Speaker 7: companies could have gotten through a few years ago during
7:14
Speaker 7: the Biden administration. But both of the rules that the
7:17
Speaker 7: FCC has that would get in the way are in
7:19
Speaker 7: the process of being changed as we speak, and Republican
7:22
Speaker 7: Commissioners have for a long time wanted to change these rules.
7:26
Speaker 7: So the first one is the thirty nine percent ownership cap.
7:29
Speaker 7: You know that one company can't own or operate TV
7:31
Speaker 7: stations that reach more than thirty nine percent of US households.
7:34
Speaker 7: These companies say they'll reach eighty percent. So it's just
7:37
Speaker 7: clear on its face that there's a problem there. But
7:40
Speaker 7: the FCC is in a rule making process. They'll probably
7:43
Speaker 7: have this rule, get rid of it, vacate it. We
7:46
Speaker 7: think by the end of the year. You know, my
7:48
Speaker 7: colleague Matt Chattenhelm is an expert on the FCC, and
7:50
Speaker 7: we've talked about this quite a bit. That's probably going
7:53
Speaker 7: to clear out of their way. There could be litigation,
7:55
Speaker 7: of course, but we do think the rule will move
7:58
Speaker 7: out of the way. The other issue is owning more
8:00
Speaker 7: than one of what's called the Big four broadcast stations ABC, CBS, NBC, Fox.
8:07
Speaker 7: That rule would also get in the way here probably
8:09
Speaker 7: in a number of local areas. Does it called designated
8:13
Speaker 7: market areas by Nielsen. That rule has also been vacated
8:17
Speaker 7: by the Eighth Circuit Court of Appeals. It will also
8:20
Speaker 7: probably be in litigation, but it seems like the road
8:23
Speaker 7: is clearing for the FCC.
8:24
Speaker 8: There.
8:25
Speaker 9: It's a whole new world.
8:26
Speaker 7: Yes, it's a whole new world. But we have Department
8:28
Speaker 7: of Justice also, so we can't forget that right and
8:31
Speaker 7: we always think about the FCC. The Department of Justice
8:34
Speaker 7: is going to be looking at this too, but I
8:37
Speaker 7: do think they can probably get it cleared through that
8:39
Speaker 7: agency as well.
8:40
Speaker 2: All we really care about is President Trump, that he
8:43
Speaker 2: have voiced any opinion one way or the other about
8:46
Speaker 2: this type of deal or these types of deals.
8:47
Speaker 7: You know, I haven't heard anything from him. You know,
8:50
Speaker 7: it would be reported in the news. I haven't heard
8:52
Speaker 7: him say anything about these deals. We are beginning to
8:54
Speaker 7: see a trend though, in the merger world, Paul, where
8:58
Speaker 7: if the companies do and say the right things for
9:00
Speaker 7: the Trump administration, they're getting assistants and getting their deal through.
9:04
Speaker 7: And they're all pretty well aware of that. So as
9:08
Speaker 7: long as they do and say the right things, hey,
9:10
Speaker 7: we won't block political ads, will be neutral in you know,
9:14
Speaker 7: our censorship of content things like that that resonate with Trump,
9:17
Speaker 7: that's going to help them.
9:19
Speaker 9: Sinclair did come in here with an eleventh hour deal,
9:21
Speaker 9: did they not?
9:23
Speaker 1: Yeah?
9:23
Speaker 9: I think so, but you know they rebuff what it
9:25
Speaker 9: seemed like on a per share basis, it was better
9:28
Speaker 9: than the next Star deal for Tegna, So why rebuffet.
9:31
Speaker 7: You know, I can't speak to that. You know, that's
9:33
Speaker 7: much more Tegna and Tegna's strategy maybe they think from
9:37
Speaker 7: an anti trust perspective, there's less overlap here. I mean,
9:40
Speaker 7: it is thirty five of fifty one of their DMAs,
9:43
Speaker 7: That's what TECHNA says. But in those thirty five, depending
9:46
Speaker 7: on what stations they own, that overlap may not be problematic.
9:48
Speaker 7: It may only be problematic into few. They may still
9:51
Speaker 7: have to divest some stations in order to get Department
9:54
Speaker 7: of Justice approval. I haven't done that comparison analysis, but
9:57
Speaker 7: it may be that they have to divest fewer stations.
10:00
Speaker 7: This deal perhaps done a different one.
10:02
Speaker 2: Yeah, how is the Department of Justice looking at mergers
10:06
Speaker 2: and equisisms generally defined? Has it maturely changed under the
10:08
Speaker 2: Trump administration versus the Biden administration?
10:11
Speaker 7: You know, it's so interesting. The rhetoric at the beginning
10:13
Speaker 7: was that it wouldn't change, that there would be this
10:15
Speaker 7: read through, and that there was more commonality with the
10:18
Speaker 7: Biden administrators than differences. But it has changed. You know,
10:21
Speaker 7: they have gone back to settling problematic deals with you know,
10:25
Speaker 7: structural even one behavioral remedy that was omnicom interpublic with divestitures.
10:30
Speaker 7: This is something that wasn't happening during the Biden administration.
10:33
Speaker 7: They just said, if it deals problematic, we're going to
10:35
Speaker 7: sue this. Doja in this FTC said no, we're going
10:39
Speaker 7: to work it out. If we have problems, we'll work
10:41
Speaker 7: out the problems with a fix. We'll have a settlement
10:43
Speaker 7: and will allow the broader deal to close. And that's
10:45
Speaker 7: a big difference.
10:46
Speaker 9: What does this deal tell you, though, just about the
10:48
Speaker 9: larger landscape of television, especially local TV, which we know
10:53
Speaker 9: has been losing revenue share. They're struggling just because there
10:57
Speaker 9: are too many places the eyeballs can go right and
11:00
Speaker 9: competing with streaming and with the big guys. So is
11:02
Speaker 9: this really a merger of necessity for these local TV stations?
11:05
Speaker 7: You know, I would think it is, and I think
11:07
Speaker 7: we're going to see more, you know, that kind of
11:09
Speaker 7: consolidation has slowly there's been quite a bit of consolidation,
11:12
Speaker 7: actually it has over the years. It kind of slowed
11:15
Speaker 7: down during the Biden administration, but you know, I think
11:17
Speaker 7: it's going to pick back up again because they are
11:19
Speaker 7: so challenged by cord cutters, by people who never you know,
11:23
Speaker 7: younger people who never watch TV at all.
11:25
Speaker 9: You know, what's that?
11:26
Speaker 7: What is cable exactly so.
11:28
Speaker 2: Broad looking broader here I mean, over the next year
11:31
Speaker 2: or two, do you expect to see more deal activity
11:35
Speaker 2: just because companies and boards and private and all the
11:38
Speaker 2: forces in out in the marketplace. I feel like this
11:41
Speaker 2: is the time to do it. This is an administration that
11:43
Speaker 2: will support deals.
11:44
Speaker 7: I think so, and I think it would have already
11:46
Speaker 7: picked up if we didn't have so much teriff uncertainty.
11:48
Speaker 7: I think that has slowed things down. But as those
11:50
Speaker 7: things sort of work themselves out, I think we're going
11:53
Speaker 7: to see a lot more deal activity because you can
11:55
Speaker 7: see a path to getting these deals done without having
11:58
Speaker 7: to go to court and without dragging it out for
11:59
Speaker 7: two years.
12:01
Speaker 9: So this is sort of a litmus test, then, isn't it.
12:03
Speaker 9: This next Star Techna deal. I think for the rest
12:05
Speaker 9: of the industry. Really yeah, I think we have a
12:07
Speaker 9: few litmus tests out there. You know, the Google Whiz
12:09
Speaker 9: deal that's pending is a litmus test for sure, to
12:12
Speaker 9: see what this administration will do with a big tech
12:14
Speaker 9: platform merger.
12:15
Speaker 7: I think this next Star Techna deal is a litmus
12:18
Speaker 7: test because they're breaking all these old rules that were
12:20
Speaker 7: the orthodoxy for years. We're going to see where that goes.
12:24
Speaker 7: And then you know, you have Dick's footlocker, and you've
12:27
Speaker 7: got Charter Cox. And there are a lot of big
12:28
Speaker 7: deals pending right now, and I think they all are
12:31
Speaker 7: deals that would have had trouble during the Biden administration,
12:34
Speaker 7: but I think can get cleared now.
12:35
Speaker 3: Our thanks to Jennifer Reeb, Bloomberg Intelligence senior litigation analyst.
12:39
Speaker 3: Coming up, we'll look at the results of a second
12:41
Speaker 3: obesity pill trial for the pharmaceutical giant Eli Lilly.
12:44
Speaker 2: If you're listening to Bloomberg Intelligence on Bloomberg Radio, providing
12:47
Speaker 2: in depth research and data on two thousand companies and
12:49
Speaker 2: one hundred and thirty industries, you.
12:50
Speaker 3: Can access Bloomberg Intelligence via bi go on the terminal.
12:54
Speaker 3: I'm Scarlett Foe.
12:55
Speaker 2: Oh Faull Sweeney, and this is Bloomberg.
13:00
Speaker 1: You're listening to Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio.
13:06
Speaker 2: I'm Paul Sweeney.
13:07
Speaker 3: And I'm Scarlett Food filling in on Bloomberg Intelligence.
13:10
Speaker 2: Next to some M and A news in the consumer space.
13:12
Speaker 2: This week, the beverage company Currick Doctor Pepper announced it
13:15
Speaker 2: would buy the coffee and tea company JD. E. Pete.
13:18
Speaker 3: The goal is for Currick Doctor Pepper to strengthen its
13:20
Speaker 3: struggling coffee business. The company also says that plans to
13:23
Speaker 3: separate its coffee and soft drinks unit into two independent
13:27
Speaker 3: US listed companies next year once the deal is completed.
13:30
Speaker 2: For more on all of this, guests host Alexis Christophers
13:33
Speaker 2: and I were joined by Ken Shay, Bloomberg Intelligence senior
13:35
Speaker 2: consumer products analyst. First ask Ken to explain what this
13:38
Speaker 2: deal would do for Kurk Doctor Pepper.
13:41
Speaker 5: This two step deal basically addresses a lagging division they've
13:46
Speaker 5: had the Carrig coffee business, you know, it's it's cold
13:50
Speaker 5: beverage business, namely Dr Pepper, Mott's Canada Dry is doing
13:56
Speaker 5: it really well, whereas the cure coffee business really has
14:00
Speaker 5: been a laggered over the last couple of years. Now
14:03
Speaker 5: that you have higher green coffee costs, you have you know,
14:06
Speaker 5: fifty percent tariffs coming in from Brazil, namely coffee beans,
14:11
Speaker 5: slow demand for at home you know pod business, you know,
14:16
Speaker 5: the ubiquitous ca cups, and it really is painted a
14:20
Speaker 5: dismal picture for that division of the second half. So
14:23
Speaker 5: rather than try to sell it, and I don't know
14:25
Speaker 5: if they try to do that, but rather than try
14:27
Speaker 5: to do that at a low multiple. What they're trying
14:29
Speaker 5: to do cleverly is team it up with JD. E. Peets,
14:33
Speaker 5: which is the number two coffee producer in the world,
14:35
Speaker 5: behind only Nesley, but mostly big in Europe, and you know,
14:39
Speaker 5: attached the US essentially US business, the CA cup business
14:45
Speaker 5: together and you have a pretty good, pretty good entity.
14:49
Speaker 9: You know what struck me when I was reading about
14:51
Speaker 9: this deal, Guys, Doctor Pepper was the second most popular
14:55
Speaker 9: soda in the US last year.
14:57
Speaker 6: Is that?
14:57
Speaker 9: Right behind coke and a head of PEPSI did not
15:00
Speaker 9: know that. I can't remember the last time I drank
15:02
Speaker 9: a Doctor Pepper.
15:03
Speaker 2: Well, if you're in Texas, that's like the state drink, then.
15:06
Speaker 9: Is it now?
15:06
Speaker 10: Yes? All right?
15:08
Speaker 9: So but Ken, the question here is talk to me
15:10
Speaker 9: about the beverage side, the soda side here, because I
15:14
Speaker 9: know bottled water has sort of been eating their lunch
15:16
Speaker 9: the overall industry right for years now, outpacing the sales
15:20
Speaker 9: of soda. So how what's the health of that side
15:22
Speaker 9: of the business.
15:24
Speaker 5: Oh, it's doing very well, lexis the cold beverage side
15:27
Speaker 5: is doing really well, whether it's coke or Pepsi or cuity,
15:30
Speaker 5: Doctor Pepper, particularly those three companies because distribution is everything.
15:35
Speaker 5: These three companies have national footprints so they can reach
15:38
Speaker 5: all the outlets, you know, whether it's fountain drinks or
15:41
Speaker 5: traditional supermarkets, you know, vending, whatever, they can reach it.
15:45
Speaker 5: And they all had powerful brands. As you said, Doctor
15:49
Speaker 5: Pepper has really been coming on strong over the last
15:51
Speaker 5: couple of years. And they have other powerful brands. And
15:53
Speaker 5: unfortunately there are somewhat mini conglomerate business structure is being
15:58
Speaker 5: dragged down by a you know, Carrig the coffee business.
16:02
Speaker 5: So that business is doing really well. Carrik has shown
16:05
Speaker 5: that it's also flexible and willing to pivot to fast
16:09
Speaker 5: growing niche coal beverages. You know, it's a business that
16:12
Speaker 5: continually changes with consumer tastes. Over the last year or so,
16:15
Speaker 5: for instance, energy drinks have taken off, so what they do.
16:18
Speaker 5: They went out and bought Ghost Energy. You know, for
16:21
Speaker 5: even a younger demographic that typically drinks beverage, energy beverages.
16:27
Speaker 5: They are bigger into the sports, the sports drink category.
16:32
Speaker 5: They talked about on the last call a few weeks ago.
16:34
Speaker 5: To get stronger in the protein space. Everybody wants protein,
16:37
Speaker 5: you know, the GLP one folks need protein, replenishment. So
16:41
Speaker 5: they've shown a willingness to branch out and tap into
16:45
Speaker 5: anywhere where fast growing coal beverages are you know, doing well.
16:50
Speaker 2: So I look on like global commodity screen and I
16:52
Speaker 2: see the price of coffee. It's up like twenty five
16:56
Speaker 2: percent this year. I mean, what's going on with that?
16:59
Speaker 2: Talk to us about coffe and just the cost of
17:01
Speaker 2: the beans and all that kind of stuff.
17:03
Speaker 5: Well, you know, coffee beans are essentially sourced from Brazil,
17:07
Speaker 5: so to some degree, the roasters are hostage to good crops,
17:13
Speaker 5: and over the last year or so you really haven't
17:16
Speaker 5: had great crops. I think some of the sellers in
17:19
Speaker 5: Brazil are also holding back knowing that towers are coming
17:24
Speaker 5: and you're not going to get what you know they
17:25
Speaker 5: would like to get. And that's exacerbating the run up
17:29
Speaker 5: that you've seen over the past six months a year
17:31
Speaker 5: in coffee beans. If you went back over the last
17:34
Speaker 5: couple of years, through two or three years, you would
17:36
Speaker 5: see that the retail price of coffee, whether it's rate
17:39
Speaker 5: to drink or hot coffee at your you know, local
17:42
Speaker 5: coffee shop, have increased faster than most other beverages soft drinks.
17:47
Speaker 5: I'm talking about so you've even seeing some consumers bypower
17:52
Speaker 5: or switching from say like cold brew cold coffee to
17:58
Speaker 5: move to energy drinks. It's more cost effective. So the
18:02
Speaker 5: coffee producers have a condundrum. Do they continue to raise
18:05
Speaker 5: prices and get flatter lower volumes or do they eat
18:10
Speaker 5: that margin? And so what CURRG has decided to do
18:13
Speaker 5: is kind of divest it in a tax efficient way.
18:17
Speaker 3: Our thanks to Ken Shay, Bloomberg Intelligence, senior Consumer products analyst.
18:21
Speaker 2: Move next to the biotech space. This week, the pharmaceutical
18:23
Speaker 2: company Eli Lilly said its second obesity pill trial help
18:27
Speaker 2: patients was almost ten percent of their body weight, and
18:30
Speaker 2: the success of this weight loss trial moves Eli Lilly
18:33
Speaker 2: one step closer to the potential approval of its weight
18:35
Speaker 2: loss pill form wrong. On this guest hosts Lise Matteo
18:38
Speaker 2: and Alexis Christopherus were joined by Sam Fizzelli, Bloomberg Intelligence
18:41
Speaker 2: director of Research for Global Industries and senior pharmaceuticals analysts.
18:45
Speaker 2: They first asked Sam how the most recent obesity pill
18:48
Speaker 2: trial is different.
18:50
Speaker 8: This is a large trial in diabetic patients, but it
18:55
Speaker 8: obese diabetic patients, so they're looking at the impact in
18:59
Speaker 8: that popular that population tends to have less of a
19:04
Speaker 8: weight loss for a variety of reasons. But it's come
19:07
Speaker 8: out exactly where we thought it would come out, actually
19:10
Speaker 8: maybe a little bit better than people's lowered expectations after
19:15
Speaker 8: that first trial read out a couple of weeks ago,
19:17
Speaker 8: if you remember when the stock got hit severely lily stock,
19:22
Speaker 8: and so we're seeing about ten percent weight loss and
19:27
Speaker 8: still the same high levels of discontinuations. This is a
19:31
Speaker 8: long trial, so you even find a whole bunch of
19:33
Speaker 8: people on placeboud discontinue because they get bored. They want
19:36
Speaker 8: to go and get wed loss from another drug. So
19:38
Speaker 8: it's actually pretty decent data because it's a small molecular pill.
19:43
Speaker 8: It's a pilly can take, relatively easily manufactured, and you
19:47
Speaker 8: can take without too much complications in terms of don't eat,
19:51
Speaker 8: to eat, take in the morning, take in the evening,
19:53
Speaker 8: that sort of stuff.
19:54
Speaker 9: And that's the key. Sam, and I'm wondering how much
19:56
Speaker 9: of a game changer this is because it's not an injection, right,
19:59
Speaker 9: it's a p You're looking at an industry that by
20:02
Speaker 9: twenty thirty is projected to be ninety five billion dollars.
20:06
Speaker 9: So if this goes Eli Lilly's way. Is it a
20:09
Speaker 9: game changer for the company.
20:11
Speaker 8: Yeah, I mean it has gone their way. This is
20:13
Speaker 8: unless something shows up in the enormous number of files
20:17
Speaker 8: that they file to the FDA, or side effects or something.
20:21
Speaker 8: This is a drug that's likely to get approved. The
20:24
Speaker 8: question is how do you use it. You've got the
20:26
Speaker 8: injectibles once a week, once a week, not a big ask,
20:30
Speaker 8: very fine needle people even tell me they don't even
20:33
Speaker 8: notice the needle going in and out. But still you
20:35
Speaker 8: don't see the needle, So what is It's it ten
20:39
Speaker 8: percent weight loss versus twenty odd percent weight loss? So
20:43
Speaker 8: what is the right way forward here? Some people are needlephobic.
20:46
Speaker 8: It's going to be helpful for those. Some people can't
20:49
Speaker 8: get access to the drug because it's hard to manufacture.
20:51
Speaker 8: The other ones that are injectibles sterile manufacturing. So there's
20:54
Speaker 8: lots of room for this. And of course there's this
20:56
Speaker 8: other thing that I think a lot of people keep
20:58
Speaker 8: thinking about, is you've got your big weight loss with
21:02
Speaker 8: your injectables six months, in nine months, in twelve months,
21:05
Speaker 8: in switch to this and help you maintain. You might
21:08
Speaker 8: not even need the higher doses which are causing some
21:12
Speaker 8: side effects, maybe you can get away with a lower
21:14
Speaker 8: dose and maintain that weight loss. They would have to
21:17
Speaker 8: do a trial to prove that.
21:18
Speaker 11: Though, as you're talking, a question kind of popped into
21:20
Speaker 11: my head. You're talking about all the different advantages to it.
21:24
Speaker 11: What about has there been any talk about price, like
21:26
Speaker 11: how much could this pill cost compare to an injection?
21:30
Speaker 8: I mean, it would be an error for these companies
21:33
Speaker 8: to start competing with themselves on price with their products.
21:37
Speaker 8: If you find that actually you can go with the
21:40
Speaker 8: lower dose of this, your margins are a bit better,
21:44
Speaker 8: definitely because there's no device involved. But I don't know
21:46
Speaker 8: what the small molecule manufacturing because they're not all small
21:50
Speaker 8: molecules are easy to make, right. It may be small
21:53
Speaker 8: discount perhaps, I don't know, but I doubt that this
21:56
Speaker 8: will come out at a level that's significantly low. On
22:00
Speaker 8: the other hand, it does have lower weight loss, so
22:03
Speaker 8: maybe if there is an opportunity to kind of I
22:06
Speaker 8: see it, PARI pass whu if whatever, If that's the
22:08
Speaker 8: right phrase in line with its weight loss, that you're.
22:10
Speaker 3: Getting our Thanks to Sam Vizzelli, Bloomberg Intelligence, Director of
22:13
Speaker 3: Research for Global Industries and senior pharmaceuticals analyst.
22:17
Speaker 2: We moved next to news from the consumer retail company
22:19
Speaker 2: william Sonoma.
22:20
Speaker 3: This week, the company raised its full your sales growth
22:23
Speaker 3: target after a strong second quarter showing across all its brands. However,
22:27
Speaker 3: Wall Street's reaction to this was mixed. Williams Sonoma has
22:30
Speaker 3: seen its incremental terror F rate double to twenty eight percent.
22:33
Speaker 2: For more on this guest host Alexis Christophers and I
22:35
Speaker 2: were joined by Lindsay Dutch Bloomberg Intelligence Consumer Hardline senior analysts.
22:39
Speaker 2: We first asked Lindsay to break down Williams Sonoma's earnings
22:42
Speaker 2: and how its business is doing.
22:43
Speaker 4: Williamsinoma had another really good quarter. We're seeing continued momentum
22:47
Speaker 4: and sales, which is a positive for them, especially given
22:51
Speaker 4: higher interest rates and new home sales being soft. And
22:55
Speaker 4: more importantly, they held the guidance for operating margin flat
22:59
Speaker 4: even though they're facing tremendous costs headwinds from tariffs.
23:04
Speaker 9: Why not a better reaction from Wall Street?
23:06
Speaker 4: You know, I'm also puzzled by that. I think that
23:10
Speaker 4: there's not much more that you can ask for from
23:12
Speaker 4: a company like this. You know, they are working on
23:16
Speaker 4: getting to some sales growth goals. They're showing progress there.
23:20
Speaker 4: They are leveraging their scale, negotiating with suppliers. They're basically
23:24
Speaker 4: mitigating all of the costs from the tariffs that they're
23:29
Speaker 4: experiencing this year, which was basically a doubling in the
23:33
Speaker 4: tariff rate than they were expecting from the first quarter,
23:36
Speaker 4: so it's a significant headwind. They're basically planning to offset
23:40
Speaker 4: all of it with all of their mitigation efforts, and
23:43
Speaker 4: they're going to continue to see some profit growth this year.
23:46
Speaker 4: Long term goals are intact.
23:48
Speaker 2: So how are they mitigating it? So they're not going
23:51
Speaker 2: to pass anything along to consumers? How are they mitigating So.
23:55
Speaker 4: They are doing select price increases. They have multiple less
24:00
Speaker 4: that they are pulling, so they are negotiating with their
24:02
Speaker 4: suppliers sort of managing the cost sort of on the
24:05
Speaker 4: supply side, they're shifting sourcing, you know, with a new
24:08
Speaker 4: threat of an additional tariff just on furniture imports, they're
24:12
Speaker 4: looking to increase US made inventory heading into next year.
24:18
Speaker 4: They are also increasing the prices and the fact that
24:21
Speaker 4: demand is showing momentum, you know, that's a positive sign
24:24
Speaker 4: that they can execute those price increases successfully and continue
24:30
Speaker 4: to get a good margin on those products.
24:32
Speaker 9: So Williams Sonoma is a company that also owns the
24:35
Speaker 9: Pottery Barn brand West Elm. Curious if there were strengths
24:40
Speaker 9: sort of across the board across its brand.
24:43
Speaker 4: Yes, So this was a second consecutive quarter that we
24:46
Speaker 4: saw same source sales growth across all brands. Pottery Barn
24:50
Speaker 4: and West Elm are the two big ones that we've
24:52
Speaker 4: been watching over the past say, four to six quarters,
24:55
Speaker 4: and that's because there really has been a bit of
24:58
Speaker 4: a challenge when it comes to demand for furniture coming
25:01
Speaker 4: into this year, we saw some positive momentum in that business.
25:05
Speaker 4: William Sonoma has continued to outperform, So we saw growth
25:09
Speaker 4: in those two brands again in this second quarter while
25:12
Speaker 4: the industry was still down for the quarter. So they
25:16
Speaker 4: are seeing, you know, good demand with those two big brands,
25:19
Speaker 4: and they're saying that a lot of that is coming
25:21
Speaker 4: from the new products that they're launching.
25:23
Speaker 3: Our thanks to Lindsay Dutch Bloomberg Intelligence Consumer Hardlines senior
25:27
Speaker 3: analyst coming up a look at earnings from the retailers
25:30
Speaker 3: Coles and Abercromme and Fitch.
25:31
Speaker 2: You're listening to the Bloomberg Intelligence on Bloomberg Radio, providing
25:34
Speaker 2: in depth research and data on two thousand companies in
25:36
Speaker 2: one hundred and thirty industries.
25:38
Speaker 3: You can access Bloomberg Intelligence via bi go on the terminal.
25:41
Speaker 3: I'm Scarlet Foo and I'm Paul Sweeney.
25:43
Speaker 2: This is Bloomberg.
25:50
Speaker 1: You're listening to Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio.
25:56
Speaker 3: I'm Paul Sweeney and I'm Scarlet Foo. Fill in on
25:59
Speaker 3: Bloomberg Intelligence.
26:00
Speaker 2: If we move next to news on the telecommunications companies
26:02
Speaker 2: EchoStar and AT and T. This week, EchoStar agreed to
26:06
Speaker 2: sell spectrum licenses to AT and T for about twenty
26:08
Speaker 2: three billion dollars in an all cash transactions.
26:11
Speaker 3: The sale will expand AT and d's network. It'll also
26:13
Speaker 3: help EchoStar state out of bankruptcy and fend off regulatory
26:16
Speaker 3: concerns about its airwave use. The deals expected to close
26:20
Speaker 3: by mid twenty twenty six, pending regulatory approval for more.
26:23
Speaker 2: Guest host Lisa Mittel and Alexis Christopherus were joined by
26:26
Speaker 2: John Butler, Bloomberg Intelligence senior telecom analysts. They first has
26:30
Speaker 2: John with this Ecostar AT and T deal means it is.
26:33
Speaker 10: Huge for EchoStar, and I think at issue for them
26:37
Speaker 10: is they have they've been trying to build their own
26:40
Speaker 10: five G network to compete with the big guys, and
26:44
Speaker 10: they have the spectrum to do it, but they didn't
26:47
Speaker 10: have the capital to do it. They really have an
26:49
Speaker 10: outsized debtload that they've really been struggling this service. And
26:55
Speaker 10: the FCC intervened here and they've been pressuring ahead of
27:00
Speaker 10: Echo Star Charlie Ergan to either use this spectrum and
27:05
Speaker 10: start to fill those airwaves or to sell it. And
27:09
Speaker 10: so I think this is maybe the first of maybe
27:12
Speaker 10: even more moves to sell more Spectrum on the part
27:15
Speaker 10: of the company. But given the price tag, it alleviates
27:19
Speaker 10: that capital crunch and so any risk of default here
27:23
Speaker 10: I think is minimized now in the wake of this deal,
27:28
Speaker 10: and so investors are breathing a big sire relief.
27:32
Speaker 9: Talk to me a little bit, John about this price.
27:36
Speaker 9: Twenty three billion dollars nine billion more than EchoStar paid
27:42
Speaker 9: for the spectrum, five billion more than the appraised value
27:46
Speaker 9: is at and t getting value out out of this
27:49
Speaker 9: twenty three billion dollar deal? Are they grossly overpaying?
27:53
Speaker 10: So I'll say Spectrum is like houses on Nantucket. You know,
27:59
Speaker 10: the price, it just continues to go up over the years,
28:02
Speaker 10: you know, particularly with the advent of AI now and
28:05
Speaker 10: the need for more capacity to carry that added traffic.
28:11
Speaker 10: It's really not a concern on my part as to
28:13
Speaker 10: whether or not AT and T is going to get
28:16
Speaker 10: a good return on this investment. And again all kitting aside,
28:20
Speaker 10: I go back to that analogy that really Spectrum does.
28:25
Speaker 10: It tends to increase in value over time. It's a
28:29
Speaker 10: very ill liquid market, so it's hard to really get
28:32
Speaker 10: a good feel for their fair value of different frequencies.
28:36
Speaker 10: But I have no doubt that at the end of
28:39
Speaker 10: the day, even expensive is going to prove cheap here
28:42
Speaker 10: for them.
28:43
Speaker 11: Hey, John, can you dig a little bit into how
28:45
Speaker 11: this is going to expand AT and T's network.
28:48
Speaker 10: So if you look at this spectrum holdings of Verizon,
28:53
Speaker 10: T Mobile and AT and T and Spectrum, I'll just
28:57
Speaker 10: take a step back for listeners that don't know, when
29:00
Speaker 10: you're making a caller transmitting data over the area, you're
29:03
Speaker 10: doing it using spectrum. And the more you have think
29:07
Speaker 10: of it like the width of a pipe. The more
29:09
Speaker 10: you have, the fatter the pipe, the faster the download speeds.
29:13
Speaker 10: And so AT and T intends to put this spectrum
29:17
Speaker 10: to use almost immediately to really enhance the download speeds
29:22
Speaker 10: of the network, and so network quality gets better, word
29:26
Speaker 10: gets around, people begin to say AT and T has
29:29
Speaker 10: a better network. So from a branding standpoint, there's a
29:33
Speaker 10: real benefit here. And then longer term again, as AI
29:38
Speaker 10: continues to scale up and imprinting those queries that we
29:42
Speaker 10: make and the answers we get back. Now, a lot
29:45
Speaker 10: of that's going to be done at the edge of
29:47
Speaker 10: the network where you need that big fat pipe to
29:50
Speaker 10: support that traffic. So I think in their minds, those
29:54
Speaker 10: are the two things there, after improving the network quality
29:58
Speaker 10: and the brand image and having the pipes to move
30:03
Speaker 10: the traffic that's coming down the road here.
30:06
Speaker 9: On a call with investors, AT and t's CEO Stanky
30:09
Speaker 9: said that, you know, regulators shouldn't be concerned that this
30:12
Speaker 9: transaction was going to put too much wireless spectrum, I
30:16
Speaker 9: guess in the hands of one of the largest telecom carriers.
30:19
Speaker 9: That's what he told investors. But do you think regulators
30:21
Speaker 9: are going to bulk at this No.
30:24
Speaker 10: I think regulators have been behind prompting the sale. If
30:28
Speaker 10: that's the right way to put it so again, the
30:31
Speaker 10: FCC was really on Echo Star to sell some of
30:34
Speaker 10: that spectrum. They're educated and well educated and wireless as
30:41
Speaker 10: regulators to know that it was probably going to be
30:46
Speaker 10: one of the big guys that would step up and
30:48
Speaker 10: buy it. If I look at at and T spectrum
30:51
Speaker 10: holdings the whole, they had a competitive disadvantage or less
30:57
Speaker 10: holdings in the band or the frequencies that they purchased
31:02
Speaker 10: from Echo Star here. So I don't think there's any
31:08
Speaker 10: sort of regulatory argument against the deal here, but I
31:12
Speaker 10: would defer to our legislative analysts in Washington to really
31:16
Speaker 10: make the call there. But I'm not concerned.
31:18
Speaker 3: Are Thanks to John Butler, Bloomberg Intelligence senior telecom analyst, moved.
31:22
Speaker 2: Next to earnings from the retailers Coals and Abercrombie and.
31:25
Speaker 3: Fitch this week, coleshare surging after the company offered a
31:28
Speaker 3: more optimistic full Your Sales outlook.
31:31
Speaker 2: The company now expects comparable sales to fall no more
31:33
Speaker 2: than five percent this year. It's prior forecast was six percent.
31:37
Speaker 3: Separately, Abercommy and Fitch raised it's full Your Sales guidance
31:39
Speaker 3: following us stronger than expected quarter at its teen focused
31:42
Speaker 3: Hollister brand.
31:43
Speaker 2: More on all of this. Guest hosts Alexis, Christopherus and
31:46
Speaker 2: I were joined by Mary Ross Gilbert Bloomberg Intelligence senior
31:49
Speaker 2: equity analyst who covers retail. We first asked Mary for
31:52
Speaker 2: her key takeaways on coals earnings.
31:55
Speaker 1: Coles.
31:56
Speaker 12: Okay, look, they reported comp sales down still and as
32:00
Speaker 12: you pointed out, fourteen consecutive quarters of declines or another
32:04
Speaker 12: way to look at it, over the past three years.
32:06
Speaker 12: They're cycling three years of declines. So but what really
32:11
Speaker 12: we're looking at in the news that came out with
32:14
Speaker 12: Cole's one is that on the call, the company said
32:17
Speaker 12: July sales were flat. That was really encouraging. And when
32:21
Speaker 12: you look at the third quarter and the guidance for
32:23
Speaker 12: the third quarter again still looking for declines for the
32:26
Speaker 12: balance of the year, down four to five percent on
32:28
Speaker 12: a comp sales basis, but for the third quarter they're
32:33
Speaker 12: going to cycle a nine point three percent decline last year.
32:37
Speaker 12: So that means that comparisons are easier and they're off
32:40
Speaker 12: to a good start. So it's encouraging. And what we're
32:43
Speaker 12: finding is that they're bringing back the core private brands
32:49
Speaker 12: that are really resonating the their core consumer, which is
32:52
Speaker 12: that sort of load to low middle income consumer. They're
32:57
Speaker 12: really pressed by inflation still, and so they are really
33:03
Speaker 12: looking for the value and is they've brought that back
33:05
Speaker 12: in and they brought back fashion jewelry and you know,
33:09
Speaker 12: they're working on refining fine jewelry, but that's all resonating
33:13
Speaker 12: now with the customer. And so that's where they're seeing
33:16
Speaker 12: some strength. And so we're seeing encouraging signs there. But
33:18
Speaker 12: they're not out of the woods yet, right because you know,
33:21
Speaker 12: again three years of sales declines and you know, they're
33:26
Speaker 12: still their sales are still declining. So we'll see if
33:29
Speaker 12: they actually reach stabilization by the end of the year.
33:33
Speaker 12: They're saying, no, we're not, but we're thinking they're providing
33:36
Speaker 12: conservative guidance so that they can be.
33:39
Speaker 2: Hey, Mary, what are Coals and some of the other
33:41
Speaker 2: companies saying about, I don't know, their strategies for dealing
33:45
Speaker 2: with tariffs in terms of a passing along to consumers,
33:48
Speaker 2: b taking it maybe even their margin or c. I
33:50
Speaker 2: don't know, kind of pushing back on some of their suppliers.
33:53
Speaker 2: Is there a consensus building about how some of these
33:57
Speaker 2: retailers are dealing with it.
33:59
Speaker 12: Yeah, Paul, that's a really good question because tariffs is
34:02
Speaker 12: absolutely top of mind. And with Coals, Coals really sources
34:07
Speaker 12: most of their product from other brands and companies. They
34:11
Speaker 12: do have their own private brand business. It's probably somewhere
34:15
Speaker 12: around a third of the business. You know, they're getting
34:17
Speaker 12: it back in order because of course they went too
34:19
Speaker 12: low last year. And what they're finding is they're sharing
34:23
Speaker 12: with their vendors. This is what we're finding across the board,
34:27
Speaker 12: and they're finding an ability to raise prices on select items.
34:31
Speaker 12: So with Coals, we did see a margin improvement in
34:33
Speaker 12: the quarter. And so because the private brands do deliver
34:38
Speaker 12: a higher margin on an overall basis versus the third
34:41
Speaker 12: party brands, they're getting that benefit and that's helping to
34:44
Speaker 12: offset a bit of the tariffs. And again they're less
34:47
Speaker 12: impacted versus some of the specialty apparel brands like Abercrombie
34:52
Speaker 12: and PVH and those companies reporting which they did disclose
34:56
Speaker 12: what kind of exposure they have. But we are seeing
34:59
Speaker 12: across the board that there is sharing. It's usually about
35:02
Speaker 12: fifty percent, where their suppliers will say we'll absorb fifty
35:05
Speaker 12: percent of the cost, and then the other fifty percent
35:09
Speaker 12: is taken by that brand. Then they will do strategic
35:12
Speaker 12: price increases on certain items that they feel will be
35:15
Speaker 12: less noticeable to the consumer.
35:18
Speaker 5: Mary.
35:18
Speaker 9: Before we get to Abercrombie, one more question here on
35:21
Speaker 9: Cole's Bloomberg News is reporting that Coles is having trouble
35:25
Speaker 9: paying its vendors on time. What do we know about that.
35:28
Speaker 12: Alexis I'm really glad you brought that up, because that
35:31
Speaker 12: was never brought up on the call. Nothing came up
35:34
Speaker 12: in that conversation. When we saw that article, we said,
35:38
Speaker 12: what I mean, that's kind of like a warning sign,
35:41
Speaker 12: and it basically says, look, they're just trying to manage
35:45
Speaker 12: their working capital needs because we're in a period right
35:47
Speaker 12: now where they're taking in all of the inventory that
35:52
Speaker 12: for the holiday season that's coming in right now, and
35:55
Speaker 12: so that's a big cash use and that's kind of
35:58
Speaker 12: where we are in the third quarters where they're going
36:01
Speaker 12: to have to, you know, raise their revolver borrowings to
36:04
Speaker 12: fund those needs. And so there was a bit of
36:07
Speaker 12: a concern, but nobody on the earnings call brought that
36:11
Speaker 12: up with the company. But we we kind of were
36:14
Speaker 12: watching that closely like I said, Cole's is not out
36:17
Speaker 12: of the woods yet.
36:19
Speaker 2: All right, Ambercrombie, what's the story there.
36:22
Speaker 12: So on Abercrombie, generally they beat but okay, and it
36:28
Speaker 12: was all led by Hollister, which we could see in
36:30
Speaker 12: the transaction data, and it was something that we saw
36:32
Speaker 12: in the first quarter. And they're cycling some big comparable
36:35
Speaker 12: sales increases in the prior year period for their namesake
36:40
Speaker 12: Abercrombie brand. But the decline in comp sales, you know,
36:44
Speaker 12: it is down about eleven percent, was way worse than
36:47
Speaker 12: what analysts were looking for. They were looking for a
36:49
Speaker 12: decline of you know, something like down seven percent. The
36:52
Speaker 12: reason for that is they had some carryover inventory at
36:56
Speaker 12: lower average price points that they were selling through in
36:59
Speaker 12: the quarter and that's what really took the comp sales down.
37:02
Speaker 12: But they were very optimistic about you know, third quarter
37:06
Speaker 12: start with their denim program, with their NFL collaboration, and
37:11
Speaker 12: so they feel like that's going to really benefit all
37:14
Speaker 12: of the initiatives that they have to benefit the Abercrombie
37:17
Speaker 12: brand going forward. So they feel like, no, this is
37:21
Speaker 12: just a little bit of a hiccup, nothing to be
37:23
Speaker 12: alarmed about. And I think what we're seeing generally when
37:26
Speaker 12: we think about all these earnings reports so far, is
37:29
Speaker 12: that the consumer is resilient. We have the lower income
37:33
Speaker 12: being a little more strained and being very careful and
37:36
Speaker 12: choosing what they're going to buy. But when they see
37:38
Speaker 12: the value, they're spending. And then, of course, you know,
37:42
Speaker 12: when you get the consumer that's in a better position,
37:45
Speaker 12: they're definitely spending.
37:46
Speaker 3: Are thanks to Mary Ross Gilbert Bloomberg Intelligence, senior equity
37:49
Speaker 3: analysts for Retail.
37:50
Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
37:53
Speaker 2: providing in depth research and data on two thousand companies
37:56
Speaker 2: in one hundred and thirty industries.
37:57
Speaker 3: And of course, as always, you can access Bloomberg Intel
38:00
Speaker 3: Diligence via b I go on the terminal. I'm Scarlet Foo.
38:03
Speaker 2: And I'm Paul Sweeney. Stay with us. Today's top stories
38:05
Speaker 2: and global business headlines are coming up right now.
38:12
Speaker 7: Mm hmm