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The Fed, Earnings, Sweetgreen, and Dexcom (Podcast) · Bloomberg Intelligence

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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
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Speaker 1: my co host Matt Miller.
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Speaker 2: Every business day we bring you interviews from CEOs, market pros,
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Speaker 2: and Bloomberg experts, along with essential market moven news.
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Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever
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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
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Speaker 1: All right, let's bring on our next guest. We love
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Speaker 1: talking to Danielle. Danielle de Martino Booth, chief strategist and
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Speaker 1: CEO at QI Intelligence. Danielle, We've now had some time
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Speaker 1: a weekend or so to kind of digest what we've
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Speaker 1: heard from various central bankers around the world. I'm sure
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Speaker 1: you've had a chance to kind of coalesce a viewpoint.
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Speaker 1: Anything change for you. What are you really thinking about
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Speaker 1: where these central banks are going, where rates are going,
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Speaker 1: based on what we learned from some of them last week.
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Speaker 3: Well, I think at a very minimum, you need to
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Speaker 3: think of rates as going nowhere.
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Speaker 4: Okay, and I say that as a minimum.
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Speaker 3: We've only got a twenty percent probability of a rate
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Speaker 3: hike for the September the twentieth, But you know, this
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Speaker 3: is a big week for payroll data, so you know,
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Speaker 3: more strength in that area, even if it's very lagged
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Speaker 3: in nature, even if we're seeing massive revisions come out
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Speaker 3: of the Bureau of Labor Statistics, their birth death adjustment
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Speaker 3: showed a negative eight hundred and sixteen thousand revision downward
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Speaker 3: in the three quarters and December thirty first, twenty twenty two.
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Speaker 3: Even though the data seems to be catching up with reality,
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Speaker 3: it's pretty apparent to me.
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Speaker 4: At least that J.
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Speaker 3: Powell is looking at backward looking data for reasons to
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Speaker 3: justify higher for longer. I think that that is the goal,
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Speaker 3: and I think that he's going to look for whatever
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Speaker 3: data he can find to justify pressing forward with another
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Speaker 3: rate high ort again at a minimum, staying higher for longer,
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Speaker 3: continuing to run that balance sheet down.
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Speaker 5: Danielle, this is Simone here in New York. Good morning
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Speaker 5: to you. You know you talk about this meeting reality,
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Speaker 5: the FED meeting reality, and how the yellow trucking shut
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Speaker 5: down may herald the big beginning of a sort of
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Speaker 5: bankruptcy cycle. How do you see this playing out? What
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Speaker 5: kind of timeline would you anticipate for seeing more bankruptcies?
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Speaker 5: And then when can kind of the FED no longer
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Speaker 5: ignore that.
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Speaker 3: You know, that's a fabulous question, because you know, if
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Speaker 3: you look at bcygo on the terminal, you'll see that
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Speaker 3: the march of bankruptcies really.
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Speaker 4: Has not subsided.
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Speaker 3: We're continuing to see bankruptcies roll in at the fastest
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Speaker 3: pace since two thousand and nine. I think what the
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Speaker 3: FED has to take into account though, right now.
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Speaker 4: Is headline risk.
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Speaker 3: You kind of had a series of quarters where Silicon
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Speaker 3: Valley was coming out with very splashy headlines ten thousand here,
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Speaker 3: ten thousand there, and then that kind of went dormant
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Speaker 3: for a while. We really haven't seen headline risk in
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Speaker 3: layoffs announcements, but I think that we're going to see
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Speaker 3: that increasingly going forward. Whether you're talking to Chris Williamson
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Speaker 3: over at Standard and Poors, who is saying that, you know,
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Speaker 3: if manufacturing backlogs remain in traction as they'd have now
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Speaker 3: for fourteen fifteen straight months, that you're going to start
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Speaker 3: to see manufacturers that are not benefiting from the Inflation
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Speaker 3: Production Act, they are not building green new factories, You're
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Speaker 3: going to see layoffs start to come through. And that's
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Speaker 3: exactly what Chris Williamson warned about in the second quarter
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Speaker 3: earning season. Remember worldly at the halfway point in this
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Speaker 3: earning season, and you've got this great, big splashy thirty
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Speaker 3: thousand people losing their jobs. Because it looks like this
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Speaker 3: is going to be a Chapter seven filing straight to
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Speaker 3: liquidation as opposed to a Chapter eleven restructuring. This is
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Speaker 3: going to take capture a lot of Americans' attention.
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Speaker 1: So we're going to have a ton of economic data
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Speaker 1: this week, Danielle, You're going to you and your team
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Speaker 1: going to be very busy. Obviously, the non form payroll
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Speaker 1: will be a big data point. I guess I'm looking
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Speaker 1: around the world. I'm seeing some recessions around the world.
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Speaker 1: I guess Germany just had a flatline quarter after a
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Speaker 1: couple quarters of contraction. Are you concerned? What is your
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Speaker 1: level of concern about this US economy here?
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Speaker 3: Well, the US economy cannot claim to exist on an island.
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Speaker 3: You know, there was a very slight uptick in Chinese
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Speaker 3: official manufacturing data overnight, but that remained in contraction. I
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Speaker 3: think the more notable development out of China, given that
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Speaker 3: we had such great hopes for this reopening trade, is
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Speaker 3: more so that we're seeing a downward movement in the
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Speaker 3: services components of these PMI numbers, and that I think
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Speaker 3: was what people paid closer attention to overnight. G If
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Speaker 3: it's not going to be the industrial sector out of China,
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Speaker 3: then what's going to happen if the services side is
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Speaker 3: slowing down? Specifically that that service is one dropped to
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Speaker 3: fifty one point five. So you're kind of on the
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Speaker 3: edge of contraction in the second largest economy. And as
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Speaker 3: you just pointed out, Germany is really three quarters into recession.
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Speaker 3: We saw that the first quarter in Germany ended up
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Speaker 3: being revised downward into contraction. We could see a similar
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Speaker 3: a bit of data coming out of Germany that revises
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Speaker 3: this the second quarter into contraction as well. The United
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Speaker 3: States cannot isolate.
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Speaker 4: Itself from the globality of the current recession.
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Speaker 5: Yeah, but I mean to that end, though, the United
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Speaker 5: States has existed a little bit apart from China for
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Speaker 5: several years now. Considering how slowly China has come back
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Speaker 5: in the game post pandemic, and the US consumer remains strong,
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Speaker 5: I mean, do you think that the US consumer can
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Speaker 5: potentially continue to kind of power through some of this
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Speaker 5: growth and offset some of the woes that we hear
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Speaker 5: from around the world despite this level of a rising
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Speaker 5: interst rates.
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Speaker 3: You know, it's interesting you raise that question. Outside of
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Speaker 3: the employee Retention Credit, which we know, I think pumped
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Speaker 3: about thirty three billion dollars into the US economy, we
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Speaker 3: know much of this is fraudulent. Outside of that fiscal
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Speaker 3: area of massive support going to some of the wealthy Americans,
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Speaker 3: We're seeing a big uptick in the number of student
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Speaker 3: loan borrowers who are preemptively getting out in front of
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Speaker 3: what they know to be resumed student loan payments, and
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Speaker 3: that's going to have a crimping effect on US consumption.
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Speaker 3: And we are indeed beginning to see that. So people
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Speaker 3: are getting ahead of interest accrual beginning on septem of
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Speaker 3: the first actual payments beginning on October the first. I
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Speaker 3: don't see an offset to that in terms of layoffs decreasing,
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Speaker 3: in terms of hiring increasing. We're just not seeing enough
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Speaker 3: evidence to show that there's any upward momentum going forward
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Speaker 3: for the US consumer.
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Speaker 1: All Right, So I'm going back and I'm looking at
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Speaker 1: this ecoscreen on the Bloomberg terminal. It is literally two
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Speaker 1: screens full of data we're going to get this week, Danielle,
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Speaker 1: can you help me focus on what I need to
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Speaker 1: focus on if there's a data point out there that
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Speaker 1: you're really going to pay attention to this week.
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Speaker 3: So I'm going to be looking a lot in terms
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Speaker 3: of hours worked, and that really is a gauge of
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Speaker 3: how tightly employees are holding on to their employers are
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Speaker 3: holding onto their employees. If they're cutting back hours aggressively,
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Speaker 3: trying to not push through with cutting handcount to cut costs.
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Speaker 3: That's something we pay very close attention to. And again,
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Speaker 3: we had Chicago PMI just out a few minutes ago
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Speaker 3: that showed that backlogs remain in contraction. I'll be looking
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Speaker 3: for a similar echo out of the Dallas Fed Manufacturing
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Speaker 3: that hits at half past this hour. I focus, we
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Speaker 3: focus at QI Research so closely on backlogs because that
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Speaker 3: is a gauge of future demand.
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Speaker 4: If the demand is not there, if.
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Speaker 3: Unfilled orders are not there, and in fact contracting, that
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Speaker 3: means that your need for employees is decreasing as a
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Speaker 3: factor of time.
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Speaker 1: Hi, Danielle, thank you very much. Always appreciate getting a
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Speaker 1: couple minutes of your time, Danielle. Dee Martina Booth, CEO
7:48
Speaker 1: and chief strategists at QI Research. Busy Busy Economic Week.
7:52
Speaker 6: This week, you're listening to the Team Cans live program
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Speaker 6: Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com,
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Speaker 6: the iHeartRadio app and the Bloomberg Business App, or listen.
8:04
Speaker 7: On demand wherever you get your podcasts.
8:08
Speaker 1: Still got a ton of earning, so when we get
8:10
Speaker 1: their earnings, we like to talk to smart people and
8:12
Speaker 1: we can find them. We just dial b Igo on
8:15
Speaker 1: the terminal that gets you Bloomberg Intelligence four hundred research
8:18
Speaker 1: anelts around the world covering you know, two thousand companies
8:21
Speaker 1: one hundred and thirty industries and what they do is
8:23
Speaker 1: really incredible.
8:24
Speaker 5: They take you through from the beginning to the end
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Speaker 5: of how these stories for these different times.
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Speaker 1: Yeah, I don't know who started that business, but the
8:30
Speaker 1: person must be a genius here. Anyway, let's bring in
8:33
Speaker 1: a couple of those smart ones. Man Deep Scene covers
8:34
Speaker 1: the tech stuff for Bloomberg Intelligence, and Punamcoil covers all
8:38
Speaker 1: the retail and we're going to tie that in because
8:40
Speaker 1: retail and technology they have collided. I think Amazon dot Com.
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Speaker 1: All right, So Man Deep, I want to start off with,
8:47
Speaker 1: and we'll let you do I know this news on
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Speaker 1: pat palns. Here I'm gonna talk about Apple. What do
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Speaker 1: I need to pay attention to from Apples when they
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Speaker 1: report numbers after the closed Thursday unit shipments.
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Speaker 8: When it comes to smartphones as well as your tutts
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Speaker 8: and Max and look, I think expectations are low. Unlike
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Speaker 8: some of the other tech companies, Apple's estimates have gone down,
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Speaker 8: so in terms of you know, expectations, they are low.
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Speaker 8: I do think they're probably going to print an inline quarter.
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Speaker 8: But in terms of guide you have the iPhone fifteen
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Speaker 8: coming up. That is where the focus is the holiday quarter.
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Speaker 8: What could it do?
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Speaker 1: I think I might upgrade to the fifteen. Honor Rocks
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Speaker 1: pushing it on rok Run another one in your tech
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Speaker 1: flunkies over their Bloomberg intelligence. He's tell me that's meaningful upgrade.
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Speaker 8: It is, but I guess in the context of what's
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Speaker 8: going on in the tech world, the generative AI buzz,
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Speaker 8: it's not going to be that big off an upgrade
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Speaker 8: in terms of what the phone can do. And everyone
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Speaker 8: is excited about potentially upgrading the hardware for running these
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Speaker 8: large language models on your phone. I don't think the
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Speaker 8: iPhone fifteen doing that.
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Speaker 9: I mean, I'm interested.
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Speaker 5: Is this part of the overall weakness that you have
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Speaker 5: seen in PC demand? Is it just that your PCs
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Speaker 5: last longer, or is it somehow about penny pinching and
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Speaker 5: a broader consumer story at this point With that.
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Speaker 8: I think there was a kind of certain cadence to
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Speaker 8: refresh cycle for both piecs and smartphones that hasn't changed.
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Speaker 8: Every time you have a big upgrade to hardware is
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Speaker 8: when you have a new technology coming up, and I
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Speaker 8: think whether it's linking your headset or being able to
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Speaker 8: run generative AI on your phone, these are the type
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Speaker 8: of things that can drive people to upgrade their phones,
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Speaker 8: the ones that are on the fans. My device is
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Speaker 8: good enough, do I really need a new one? And
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Speaker 8: that's what drives the asps. So right now everyone is
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Speaker 8: talking about even though the unit shipments is flat, how
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Speaker 8: will Apple keep growing? It's the services and the asps
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Speaker 8: because the next version of the phones continues to get
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Speaker 8: expensive and they keep learning more services.
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Speaker 1: All right, Punham, We've got a lot of retailers set
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Speaker 1: the report and the come weeks, but let's start with
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Speaker 1: with Amazon. What do you expect the story to be
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Speaker 1: from Amazon.
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Speaker 4: It's dark pall.
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Speaker 10: I think it's going to be a mixed break. So
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Speaker 10: we're going to see some strength online with sales growing
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Speaker 10: or I should say gm re growing in the high
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Speaker 10: single digit range, which is a good thing because since
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Speaker 10: the pandemic, you know, Amazon has dealt to it having
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Speaker 10: to see more moderated sales growth and coming back to
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Speaker 10: the high single digit, low double digit range just puts
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Speaker 10: it on track to go back to the double digit
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Speaker 10: games that we've been used to seeing in online. But
11:31
Speaker 10: outside of that, you know, the focus is also on
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Speaker 10: a WUS and EWS sales will slow in the quarter.
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Speaker 10: They're only expected to grow at a high single digit pace,
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Speaker 10: and they could even moderate further in three Q when
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Speaker 10: we see their guidance, which could probably be closer to
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Speaker 10: seven percent.
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Speaker 5: How much does AWS just simply outweigh, you know? However,
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Speaker 5: successful or not, Prime Day was the various shopping trends
11:55
Speaker 5: that we're seeing.
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Speaker 10: Yeah, so Prime Day was a huge success. We heard
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Speaker 10: from Amazon the first day of it's largest sales date ever.
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Speaker 10: It even out faced Black Friday and Cyber Monday last year.
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Speaker 10: But when it comes to a WUS, the reason a
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Speaker 10: WS is so important because it is the cashprap for Amazon.
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Speaker 10: Right they produced pretty much all for nearly all of
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Speaker 10: Amazon's profits, so it's really important to see those profit
12:17
Speaker 10: numbers rise. In the quarter, Amazon's a WUS business will
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Speaker 10: only yield about a twenty four percent profit margin. It
12:24
Speaker 10: has historically been year thirty percent. We do see it
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Speaker 10: coming back to that and even now facing that as
12:30
Speaker 10: we move forward in the next few years. But for now,
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Speaker 10: you know that profit dwindles a little, it will pressure
12:36
Speaker 10: the overall profitability.
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Speaker 1: Man Deep AI is certainly story number one in your
12:42
Speaker 1: world and technology another name today that seems to be
12:46
Speaker 1: getting the you know, the AI you know, kind of
12:49
Speaker 1: tap on the shoulders Palenteer. What's going on there? What
12:51
Speaker 1: is Palenteer and why is it up eleven percent today?
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Speaker 8: So with all the talk around generative AI, and you know,
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Speaker 8: Microsoft is the only one that has launched a tangible
13:01
Speaker 8: product around it. They're charging thirty dollars coat gpt well
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Speaker 8: and also they're charging thirty dollars for their co pilots.
13:10
Speaker 8: This is the enterprise version of the product. Jackipt is
13:13
Speaker 8: more consumer facing. So to me, you know, all these companies,
13:17
Speaker 8: whether it's Palenteer Snowflake data breaks. What they're doing is
13:22
Speaker 8: essentially ingesting these large amounts of data that is being
13:26
Speaker 8: created and trying to use you know, generative AI or
13:30
Speaker 8: large aguage models to make the AI better. And that
13:34
Speaker 8: is what the play is now.
13:36
Speaker 11: Whether or not.
13:36
Speaker 8: They're successful in monetizing it, we don't know because they
13:40
Speaker 8: haven't launched a product like Microsoft has, So.
13:44
Speaker 4: That is the key.
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Speaker 8: If if any time you see a company actually launching
13:48
Speaker 8: a product being able to sell their customers, that's when
13:51
Speaker 8: you know this is a new deal. And that's I
13:55
Speaker 8: think the only tangible revenue you see right now is
13:58
Speaker 8: for Microsoft. Yes it's for they're out, but at least
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Speaker 8: they have a product out there they're looking to monetize it.
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Speaker 8: With Palenteer, you've seen multiple expansion. Yes, this is a
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Speaker 8: company that is built around data visualization and potentially could
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Speaker 8: use generative AI, but we don't know if they have
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Speaker 8: a product.
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Speaker 1: They'll be But that gets an eleven percent move in
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Speaker 1: the stock.
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Speaker 8: And that's where you know. Everything that has happened this
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Speaker 8: year is multiple expansion, no optick in estimates, so come earnings.
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Speaker 8: The expectations are sky high, and that's where you got
14:29
Speaker 8: to deliver like Nvidia has.
14:30
Speaker 7: You know.
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Speaker 1: That's what Doug Cast from Seabree's Partners was saying to
14:33
Speaker 1: Tom Keenan and I. And he's he's gotten increasingly bearish
14:37
Speaker 1: as years going on because it's all multiple expansion. He
14:39
Speaker 1: hasn't seen the earnings yet the first half of the year. Okay,
14:42
Speaker 1: he kind of understands, you know, the most recent you know,
14:45
Speaker 1: four or five, six weeks he just doesn't get. So
14:47
Speaker 1: that makes kind of surprise.
14:48
Speaker 5: It's people looking for the long term growth that we're
14:53
Speaker 5: not going to necessarily see immediately. But put on, I
14:55
Speaker 5: want to throw this to you as well, because I
14:57
Speaker 5: know you cover lots of these consumer and e commerce companies.
15:01
Speaker 5: One of the things that that we've been trying to
15:04
Speaker 5: parse here on the AI story is do we see
15:08
Speaker 5: some of these AI upgrades roll out, you know, for
15:10
Speaker 5: consumer benefit, for you know, tailoring ads that get to consumers,
15:15
Speaker 5: for getting the right products in front of them, or
15:17
Speaker 5: do we just simply see efficiency on the back end?
15:21
Speaker 5: What are you seeing from some of the brands that
15:23
Speaker 5: you cover, because I know there are quite the lengthy
15:25
Speaker 5: list that report this week that may throw in that
15:27
Speaker 5: mention of AI and their earnings calls.
15:31
Speaker 10: Sure, I think AI is both. It definitely will drive
15:34
Speaker 10: efficiencies on the back end, but we are seeing companies
15:37
Speaker 10: also bring it to the benefit of the consumers and
15:39
Speaker 10: the sellers. A recent example they reported last week and
15:43
Speaker 10: they launched a listing program where you can take a
15:46
Speaker 10: picture of a product that you want to sell and
15:49
Speaker 10: AI will generate the description for you. So it removes
15:52
Speaker 10: a pain point to our friction point in the selling
15:55
Speaker 10: process and also allows you to amplify your listings online.
15:59
Speaker 10: So we think that's one Useas we have revolved reporting
16:02
Speaker 10: this week, they've used AI to help generate marketing billboards,
16:06
Speaker 10: They're using AI to help improve search. So I think
16:08
Speaker 10: there's a lot happening with AI, notably generative AI that's
16:11
Speaker 10: really going to drive the ROI for both the buyers
16:15
Speaker 10: and the sellers.
16:16
Speaker 7: Real quick.
16:18
Speaker 1: And deep. I want to talk to you about advanced
16:20
Speaker 1: micro devices. It's a chip maker. Can it be a
16:23
Speaker 1: Nvidia kind of like play?
16:26
Speaker 8: I mean, last week we learned from Intel that PC
16:29
Speaker 8: market seems to be bottoming out in terms of inventory correction,
16:33
Speaker 8: so that's a positive sign. And look, bulk of AMD's
16:36
Speaker 8: revenue is still tied to CPUs now what's going on
16:39
Speaker 8: with generative AI is there is a substitution phenomena. Things
16:43
Speaker 8: that you were able to do with CPUs before right
16:46
Speaker 8: now you're looking to do with GPUs because that's where
16:50
Speaker 8: the generative AI connection comes into play. So I do
16:53
Speaker 8: think eventually you're going to find that these companies either
16:57
Speaker 8: have to diversify their CPU footprint YEP and produce these accelerators,
17:03
Speaker 8: or I think they will be a tale of two
17:06
Speaker 8: stories that one part is growing and the other part
17:08
Speaker 8: is declining.
17:09
Speaker 1: All right, well, keep an eye on all that. More
17:11
Speaker 1: earnings coming up this week and probably going into next
17:14
Speaker 1: week as well. Man Deep Singh Punamgoyle. They are two
17:17
Speaker 1: of the best analysts of Bloomberg Intelligence, one covering tech,
17:20
Speaker 1: one covering retail. But guess what, it's all converging.
17:23
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17:41
Speaker 1: Let's stop the salad business. I'm not a big salad here.
17:45
Speaker 5: I love I love you kind of like salads at lunch,
17:50
Speaker 5: which is okay, I think our.
17:51
Speaker 1: Next All I know is, you know the people here
17:55
Speaker 1: come around lunchtime, they come in and out. They're all
17:57
Speaker 1: carrying these bags from Sweet Green, which I guessed at
18:00
Speaker 1: the time was a salad thing. Again, not being a
18:02
Speaker 1: solid person, I don't know, but it is definitely a
18:06
Speaker 1: thing across the street from the Bloomberg HQ here at
18:09
Speaker 1: Midtown Manhattan, and I know it is around the country
18:12
Speaker 1: as well. Jonathan Neeman joins us. He's the CEO and
18:14
Speaker 1: founder of Sweet Green. It's sweet Green trades on New
18:18
Speaker 1: York Stock Exchange symbols. SG can put that into your
18:21
Speaker 1: Bloomberg terminal. Jonathan, Thanks so much for joining us here.
18:23
Speaker 1: I know you guys reported earnings last week, missed a
18:26
Speaker 1: little bit on revs and on EPs stock traded down.
18:30
Speaker 1: Tell us about the most recent quarter, tell us about
18:32
Speaker 1: the guidance you're giving your investors.
18:35
Speaker 12: Absolutely, good morning everyone. So we're really proud of the
18:38
Speaker 12: quarter we posted. We had twenty two percent year over
18:41
Speaker 12: year growth, three percent comps with positive traffic, and we
18:44
Speaker 12: expanded our restaurant level margin above twenty percent, delivering our
18:48
Speaker 12: first profitable quarter on an adjusted ebad up perspective as
18:51
Speaker 12: a public company. So I think a sign of more
18:54
Speaker 12: things to come companies focused on discipline, capital efficient growth
18:58
Speaker 12: as we continue to bring our mission across the country
19:00
Speaker 12: to more cities and more locations, and we're looking forward
19:04
Speaker 12: to continuing driving some comp drivers we have around our
19:07
Speaker 12: loyalty program as well as our expanded menu.
19:10
Speaker 5: Well, Jonathan, you know, Piper Sandler was out today with
19:12
Speaker 5: a note talking about how the tide maybe turning here
19:15
Speaker 5: a bit for Sweet Green after a tough sledding since
19:17
Speaker 5: going public, And I think it's pretty obvious going public
19:22
Speaker 5: November twenty twenty one, right post pandemic, then seeing the
19:26
Speaker 5: wave of omicron has to be hard for any company
19:29
Speaker 5: that does a lot of office business. Do you see
19:33
Speaker 5: the tide as turning? What things are you telling investors, Hey,
19:37
Speaker 5: wait for this because in a quarter, two quarters, we're
19:41
Speaker 5: really going to be able to start delivering on some
19:44
Speaker 5: of those expectations.
19:46
Speaker 12: Yeah, you know, we're focused. We're focused on a few
19:48
Speaker 12: big things. One is continuing to expand our footprint and
19:52
Speaker 12: not only opening our classic stores, but a few new
19:55
Speaker 12: formats that we've opened that have been really interesting and successful,
19:58
Speaker 12: one being our drive through format called the Sweet Lane,
20:00
Speaker 12: another being our Infinite Kitchen. We've also been you know,
20:04
Speaker 12: I hear you guys talk about, you know, not being
20:06
Speaker 12: a salad guy. While Sweegeren started as a salad company,
20:08
Speaker 12: we're much more than that today. Really consider ourselves healthy
20:11
Speaker 12: comfort food and our warm bowls. We sell more warm
20:13
Speaker 12: bowls than we do salads. We're on a journey to
20:16
Speaker 12: continue to expand our menu and taking the type of
20:19
Speaker 12: sourcing and fresh prep that we do, but expanding it
20:22
Speaker 12: beyond just salads and so things with you know, leaning
20:25
Speaker 12: on protein and carbs and just heardier craveable items to
20:30
Speaker 12: really bring our mission to life. As I mentioned, we've
20:33
Speaker 12: also been focused on a loyalty program. We call it
20:35
Speaker 12: Sweet Pass. It has two components, both the free rewards
20:38
Speaker 12: and challenges, as well as a membership program where for
20:41
Speaker 12: ten dollars a month you get three dollars off every day,
20:44
Speaker 12: and so a number of comp drivers built into the
20:47
Speaker 12: business as we look forward, all while bringing a discipline,
20:50
Speaker 12: a you know, a cost discipline approach and making this
20:53
Speaker 12: company profitable.
20:54
Speaker 5: Yeah, talk to me about Infinite Kitchen. You mentioned this there.
20:57
Speaker 5: This is the sort of automated version of your kitchen.
21:00
Speaker 5: You've rolled out one of them that I believe and
21:04
Speaker 5: correct me if I'm wrong. Here eliminates employees, you know,
21:06
Speaker 5: you put together these bulls without employees there. What's your
21:11
Speaker 5: vision for the scale of this, for the timeline with
21:16
Speaker 5: respect to getting this in more than just kind of
21:19
Speaker 5: a handful of stores.
21:22
Speaker 3: No.
21:22
Speaker 12: Automation is something that I'm personally very excited about, and
21:25
Speaker 12: it's something that Sweekering has been working on for a
21:27
Speaker 12: number of years, develop you know, developing this technology in house.
21:31
Speaker 12: And so what we see is is we believe that
21:35
Speaker 12: we will always still make the food in house, but
21:38
Speaker 12: with this automation, we're able to assemble the bulls in
21:41
Speaker 12: a precise manner at much higher throughputs. So the Infinite
21:45
Speaker 12: Kitchen can make four to five hundred bowls per hour,
21:47
Speaker 12: perfectly portioned, perfectly accurate, with very high quality, a very
21:52
Speaker 12: high quality experience both for our team members and our consumers.
21:56
Speaker 12: So people are loving the pilot store that we have.
21:58
Speaker 12: We're opening a second Infinite Kitchen restaurant later this year
22:01
Speaker 12: in Huntington Beach, California, and have plans to begin integrating
22:05
Speaker 12: this technology into restaurants next year. We do believe over time,
22:09
Speaker 12: you know, a huge portion of our fleet will integrate
22:12
Speaker 12: this technology. But we still have a lot to learn
22:15
Speaker 12: in terms of in terms of you know, exactly how
22:18
Speaker 12: to deploy it. But all to say, a very promising
22:20
Speaker 12: start with this technology.
22:22
Speaker 1: John, to talk to me again, not being that familiar
22:25
Speaker 1: with your restaurants, although I am going to go today
22:28
Speaker 1: for the first time because it's on sixty first Street,
22:30
Speaker 1: I think, and Lex, I'll give that a shot. You
22:33
Speaker 1: where have you historically located your stores and where are
22:37
Speaker 1: you and how has that changed maybe since the pandemic
22:41
Speaker 1: in the different way ways people work and the amount
22:44
Speaker 1: of time to spend in the office versus home.
22:46
Speaker 12: Absolutely so we hope. We started the company in Washington,
22:49
Speaker 12: d C. Almost sixteen years to the day. Three kids
22:53
Speaker 12: in Georgetown really had nowhere to aid, so we started
22:55
Speaker 12: in DC. We worked our way up the Eastern Corridor
22:58
Speaker 12: and for the first call it decade of the company's history.
23:00
Speaker 12: We're very urban leaning, although you know, we did have
23:04
Speaker 12: suburban stores as well. Ever since the pandemic, with the
23:07
Speaker 12: dispersion of consumers as well as following our customers home,
23:11
Speaker 12: we've begun to explore more suburban and so our pipeline
23:14
Speaker 12: has leaned heavily suburban to a number of new markets
23:17
Speaker 12: over the past few years, where our fleet today is
23:20
Speaker 12: approximately fifty percent urban fifty percent suburban, and we see
23:24
Speaker 12: pretty much equal success in both in both worlds, so
23:27
Speaker 12: similar av similar margins, which really is you know, talks
23:31
Speaker 12: a lot about the portability of the brand not only
23:34
Speaker 12: in different type of trade areas, but in different markets
23:36
Speaker 12: all over the country.
23:37
Speaker 5: Does that capture a different kind of consumer when you
23:40
Speaker 5: move outside those typically urban areas. And then also you know,
23:45
Speaker 5: with respect to the consumer, are you worried about the
23:48
Speaker 5: restart of student loan payments weighing on your customer's wallets.
23:55
Speaker 12: So we are expanding, We're continuing to expand our consumer,
23:58
Speaker 12: so looking to capture more families, different age groups and
24:03
Speaker 12: really be relevant for anyone looking for a craveable, delicious
24:06
Speaker 12: and healthy meal. So over time, our vision is to
24:08
Speaker 12: redefine fast food and really bring this idea of healthy
24:12
Speaker 12: comfort food to scale and kind of see everyone as
24:14
Speaker 12: being our consumer over time. In terms of the health
24:17
Speaker 12: of the consumer, we see a lot of health in
24:20
Speaker 12: our consumer today, we haven't seen any reason to be concerned.
24:24
Speaker 12: It is something we're of course watching, understanding the student
24:27
Speaker 12: debt repayments, but given the twenty two percent year over
24:30
Speaker 12: year growth and the positive comp and positive traffic, we
24:34
Speaker 12: are overall feeling very good about the trajectory.
24:37
Speaker 1: All right, Jonathan, thanks so much for taking some time
24:39
Speaker 1: to chat with this. Jonathan Nieman. He's the CEO and
24:42
Speaker 1: co founder of sweet Green. As a publicly traded company.
24:45
Speaker 1: You could type in the ticker SG into your Bloomberg
24:48
Speaker 1: Professional terminal and get all the day you need on
24:51
Speaker 1: that company. I think I'm gonna go there today. It'll
24:54
Speaker 1: be my first time.
24:55
Speaker 5: Are you gonna as you going there? Going to add
24:57
Speaker 5: to the twelve percent gain that we're seeing in this
25:00
Speaker 5: shares some sweet Green today.
25:01
Speaker 1: Maybe I think Paul eating a salad he like defeats
25:07
Speaker 1: the purpose. I think you're right, he's gonna put fried
25:09
Speaker 1: chicken in it.
25:09
Speaker 7: Etc.
25:10
Speaker 1: All right, we'll see how it goes. I'll report back.
25:14
Speaker 6: You're listening to the teenth Ken's Are Live program Bloomberg
25:17
Speaker 6: Markets weekdays at ten am Eastern.
25:19
Speaker 7: On Bloomberg dot com, the iHeartRadio.
25:21
Speaker 6: App, and the Bloomberg Business app or listen on demand
25:24
Speaker 6: wherever you get your podcasts.
25:27
Speaker 1: So let's talk beer, let's talk Heineken, and we do that.
25:31
Speaker 1: We talked to Duncan Fox Research Channel, so Bloomberg Intelligence
25:34
Speaker 1: you can tell via zoom from the phenomenal Bloomberg European
25:39
Speaker 1: headquarters at Queen Victoria Street in London and absolutely phenomenal
25:43
Speaker 1: building right in the city of London, right by the
25:45
Speaker 1: Bank of England. Thank you very much, Mike. We appreciate
25:48
Speaker 1: those digs over there. Duncan talk to us about Heinegen.
25:51
Speaker 1: What do we hear from our good friends in Amsterdam.
25:55
Speaker 11: It was a little bit of a surprise today actually
25:57
Speaker 11: in that they actually don't radio expectations. That's something that
26:02
Speaker 11: our friends at Hanegan don't do very often. So they've
26:06
Speaker 11: basically been investing a lot more behind their brands, and
26:09
Speaker 11: there was a couple of markets which really had had
26:11
Speaker 11: some poor volume, mainly Vietnam and Nigeria, and so they've
26:16
Speaker 11: decided to keep their investment high in those markets and
26:18
Speaker 11: take the hit on operating profit, which from my point
26:21
Speaker 11: of view as an analyst for the long term, absolutely the
26:23
Speaker 11: right thing to do. But it was a bit of
26:25
Speaker 11: a shock this morning at six o'clock, shares a down
26:28
Speaker 11: seven percent or so what they were the last song looked.
26:31
Speaker 5: Hard to go out despite being in Europe, hard to
26:34
Speaker 5: go out and get a beer at six am. I
26:35
Speaker 5: think where the earnings come in as a surprise. Talk
26:39
Speaker 5: to me about so a lot of this I understand
26:43
Speaker 5: is they've invested heavily in these smaller, more local oriented operations.
26:51
Speaker 4: But there is.
26:52
Speaker 5: Where the consumers are feeling maybe the pinch is it
26:55
Speaker 5: because they kind of can't continue to add these price
26:59
Speaker 5: increases on as supply prices increase, or explain to me
27:05
Speaker 5: how this how they how this bruise down?
27:09
Speaker 7: Nice one.
27:10
Speaker 11: Yeah, basically they pushed price up about twelve percent on average,
27:13
Speaker 11: which is which is pretty high. But you have to
27:16
Speaker 11: remember that their their costs went up mid teams in
27:20
Speaker 11: Q one, They're going to go up low teams in
27:22
Speaker 11: Q two. So what they've done is effectively take the
27:25
Speaker 11: pricing up front, and occasionally in some markets they just
27:29
Speaker 11: want to be too far as the economies slowed, so
27:32
Speaker 11: the consumer has, however much money they've got to spend,
27:35
Speaker 11: and beer is not an essentials much as I'd like
27:39
Speaker 11: it to be. So you know, they've traded down, i
27:41
Speaker 11: think in some markets to cheaper brands, So they've got
27:45
Speaker 11: the right long term strategy for sure. You know, they've
27:48
Speaker 11: the markets still are mentioned Vietnam and Nigeria. They have
27:51
Speaker 11: huge populations, great economic growth in the long term. They've
27:55
Speaker 11: just had some short term issues that have that have
27:58
Speaker 11: caused them some volume decline in short term. But you know,
28:02
Speaker 11: they've taken the decision to look long term, which I
28:05
Speaker 11: think is the right decision and sort of take the
28:07
Speaker 11: volume sort of the profit hit this year. So it
28:10
Speaker 11: makes sense to me. But yeah, right now, so I've
28:13
Speaker 11: been expecting that.
28:14
Speaker 1: First thing, I'm looking at the pg EO function on
28:17
Speaker 1: the Bloomberg terminal that gives you a financial analysis in
28:19
Speaker 1: a kind of you can see by segment where these
28:21
Speaker 1: guys are and by geography. Forty percent of their revenues
28:23
Speaker 1: comes from Europe, you know, about thirty three percent from
28:26
Speaker 1: America's and then Asia's the next biggest and then Emea.
28:30
Speaker 1: So are they investing in? I guess where are really
28:33
Speaker 1: the key growth markets for them that you talk about
28:35
Speaker 1: their investment.
28:38
Speaker 11: Ironicy Brazil is one that they've pushed quite a lot
28:40
Speaker 11: of money into in the last couple of years. They
28:42
Speaker 11: bought Kier in this business, probably about four or five
28:45
Speaker 11: years ago now, and they've been transferring that to make
28:49
Speaker 11: sure they have Amstell and Heineken beer going through that network.
28:53
Speaker 11: They're gaining market share, but obviously it's not showing through
28:56
Speaker 11: and operating profits. Because of that investment, You've then got
29:00
Speaker 11: Mexico's a big market. Vietnam China are the big markets.
29:05
Speaker 11: So all of those have got very very big populations,
29:07
Speaker 11: with one more importantly been young urban populations, and that's
29:11
Speaker 11: what you want as a beer manufacturer. Then you can
29:14
Speaker 11: tell your investment to actually get long term growth. So
29:17
Speaker 11: say it all makes sense, but every now and again
29:20
Speaker 11: you come up with a shock because economic growth has
29:23
Speaker 11: slowed down. Vietnam just for some reason, the economy just
29:30
Speaker 11: stalled after the Chinese New Year. There was some overstocking
29:34
Speaker 11: that they put in place during Chinese Year after pushing
29:36
Speaker 11: prices up dramatically. They had forty three percent volume growth
29:40
Speaker 11: in Vietnam last year, and I think they were expecting
29:43
Speaker 11: something similar and I think they just got caught out
29:45
Speaker 11: a little bit when they pushed prices a bit too high.
29:48
Speaker 1: Dog Just let's step back and just look at the
29:49
Speaker 1: global beer market. You know, when you talk to the
29:52
Speaker 1: big brewers that that you cover, how do they think
29:55
Speaker 1: about just kind of global growth for this category.
30:00
Speaker 11: They would expect something low volume growth, but it's really
30:05
Speaker 11: about premiumizing your brand portfolio so you get very good
30:10
Speaker 11: pricing and mix. That's where their strategies are. Problem with
30:15
Speaker 11: that is when you've got economic growth faltering, you take
30:19
Speaker 11: it on the chin in the short term and you've
30:20
Speaker 11: just got to keep investing behind those brands to try
30:23
Speaker 11: and get us to buy the premium beer. So it's
30:27
Speaker 11: all about that, all about getting into the markets where
30:30
Speaker 11: you've got younger than populations, so emerging markets, to where
30:33
Speaker 11: the growth is going to be, and then making as
30:35
Speaker 11: much money as you can from your core home markets,
30:38
Speaker 11: which are more likely in developed markets like the US
30:41
Speaker 11: or Europe. As you mentioned earlier for Heineken, So Heinekens's
30:45
Speaker 11: investment has been getting outside of Europe basically and reducing
30:49
Speaker 11: that GEO split to forty percent. It was well over
30:53
Speaker 11: it was probably sixty percent of about ten years ago.
30:55
Speaker 11: So they've done a very good job at pushing the
30:58
Speaker 11: portfolio into the right area.
31:00
Speaker 5: Speaking about those core markets in North America and Europe.
31:05
Speaker 5: Is the beer drinker or spirits drinker, perhaps more broadly,
31:10
Speaker 5: are they healthier in one versus the other? What is
31:13
Speaker 5: some of the commentary that you're hearing from these brands
31:16
Speaker 5: that span both markets telling you.
31:20
Speaker 11: Well? Certainly, up until recently, the spirits market was doing
31:24
Speaker 11: very very well. Experiences you probably heard an iconic Debra
31:27
Speaker 11: can talk about those very very key for the young
31:30
Speaker 11: consumer at the moment, and the spirits companies have been
31:34
Speaker 11: extremely good at fueling that. If you look at all
31:38
Speaker 11: of the marketing campaigns that the spirit companies do, it's
31:40
Speaker 11: around events, so they hire bars and do something around
31:43
Speaker 11: the brand, and that's been very very successful. Beer companies
31:47
Speaker 11: have yet really to go down that route, though they
31:50
Speaker 11: are now putting money into e commerce to make sure
31:55
Speaker 11: that it can get more of that spend I suppose,
31:57
Speaker 11: and more of the consumers doing it it the beer companies,
32:00
Speaker 11: I think you've got to catch up a little bit.
32:02
Speaker 11: All in all, they both get a volume growth in
32:04
Speaker 11: the sort of low single digit if you strip out
32:07
Speaker 11: the COVID anomalies that we've had over the last few years.
32:11
Speaker 11: So it's going to be very interesting how the results go.
32:14
Speaker 11: The rest of this week and the Agio tomorrow and
32:16
Speaker 11: ABI later in the week, and let's see where their
32:19
Speaker 11: volume growth are. We know there's been some slight overstocking
32:23
Speaker 11: in the trade as we've gone through all that COVID anomalies,
32:26
Speaker 11: so it's going to be very interesting set of results.
32:28
Speaker 1: So don't get to know your top level analyst. You
32:32
Speaker 1: like to do a lot of primary research. So you're
32:34
Speaker 1: in your local, your favorite pub in London. What's a
32:37
Speaker 1: pint of your favorite beer cost you today?
32:42
Speaker 11: Too much would be my response to that. But you're
32:45
Speaker 11: looking at probably somewhere around between six and seven pounds
32:48
Speaker 11: a pint. It's all sad. Yeah, it's not cheap. My
32:53
Speaker 11: favorite pub though, is where I live, and I live
32:55
Speaker 11: in Dorset now and it's a little bit better there.
32:59
Speaker 11: It's probably around about three fifty a points fifty. Living
33:02
Speaker 11: out in the country really.
33:03
Speaker 1: Helps very good. All right, Well, you're right down there
33:07
Speaker 1: in the city of London where all the big hitters
33:09
Speaker 1: are in London, you can afford to pay a little
33:12
Speaker 1: bit more. Duncan Fox doing that primary research that he's
33:15
Speaker 1: known for. He cuts hover, He covers all the consumer
33:17
Speaker 1: products over there in Europe for Bloomberg Intelligence six.
33:21
Speaker 5: Seven dollars a pint. I mean when you can when
33:23
Speaker 5: you take this dollar.
33:24
Speaker 1: Oh yeah, yeah, yeah, it's exactly. I mean I remember
33:26
Speaker 1: back when I went to UH. I think this is
33:29
Speaker 1: a correct memory putting down a pound coin, which by
33:32
Speaker 1: the way, is still the best coin in the plant
33:34
Speaker 1: on the planet, the pound coin, the one British pound
33:37
Speaker 1: that would get you a beer back in nineteen eighty
33:39
Speaker 1: seven in London. So I don't know. So that's inflation.
33:44
Speaker 1: That's inflation you can take home with all right. That
33:46
Speaker 1: was Duncan Fox talking beer.
33:48
Speaker 6: You're listening to the tape. Cat's are live program Bloomberg
33:51
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
33:55
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33:57
Speaker 7: The Bloomberg Business App.
33:58
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34:01
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34:07
Speaker 1: Simone Foxman Paul Swingey here in the Bloomberg Interactive Broker Studio.
34:10
Speaker 1: We are streaming live on YouTube. Can head over to
34:13
Speaker 1: YouTube and search for Bloomberg the Global News, and that's where
34:17
Speaker 1: you'll find this our C Suite conversation. Today we're gonna
34:20
Speaker 1: be visit a company we checked in with earlier this
34:23
Speaker 1: year is really a fascinating company. Dex Com is the company.
34:26
Speaker 1: It's a medical equipment company. DXCM is the ticker. It's
34:30
Speaker 1: a fifty billion dollar market cap company. Stocks up about
34:33
Speaker 1: ten percent this year, up about fifty percent over the
34:35
Speaker 1: trailing twelve twelve month basis, and they're into this thing,
34:38
Speaker 1: the Continuous Glucose Monitoring System dc CGM Systems, and it's
34:44
Speaker 1: pretty pretty cool stuff. Joining us today is their CEO,
34:49
Speaker 1: Kevin Sayer. Joining us. Hey, Kevin, I know you guys recently,
34:52
Speaker 1: I guess last week reported some numbers, beat on revenue,
34:55
Speaker 1: beat on EPs. Talk to us about the quarter. What's
34:58
Speaker 1: the key takeaway there and more importantly, what kind of
35:01
Speaker 1: guidance did you give the street?
35:04
Speaker 9: Well, thanks for having me on the show today. It
35:06
Speaker 9: was a great quarter for us. In fact, I said
35:09
Speaker 9: in the earnings remarks, it was like a highlight reel
35:12
Speaker 9: with twenty six percent year over year growth, the largest
35:15
Speaker 9: dollar growth in the history year over year quarterly basis
35:19
Speaker 9: in the history of our company, more new patient ads
35:22
Speaker 9: than any quarter in our existence. On top of that,
35:25
Speaker 9: we had operating expense leverage that resulted in record net
35:29
Speaker 9: income and profitability the factors that drove that. First of all,
35:33
Speaker 9: we launched our latest system, our G seven, in the US,
35:38
Speaker 9: and that launch has gone extremely well. We've got access
35:42
Speaker 9: through all the major PBMs in the country and all
35:45
Speaker 9: the insurance plans. We've also launched G seven and thirteen
35:50
Speaker 9: international markets. Our international growth was actually forty percent this
35:54
Speaker 9: quarter compared you on a year over year basis. The
35:57
Speaker 9: G seven launches helped with that. Combined, if we have
36:00
Speaker 9: a product portfolio strategy internationally to whereby we have a
36:04
Speaker 9: family of products in each of these geographies that best
36:07
Speaker 9: meets the access and reimbursement needs of those areas, and
36:11
Speaker 9: we've been able to expand our international markets greatly. With
36:14
Speaker 9: that bottom line, we took share in pretty much every
36:17
Speaker 9: major reimburse market in the world this past quarter, and
36:21
Speaker 9: that you see it in the numbers.
36:22
Speaker 7: Yeah.
36:22
Speaker 5: Can you talk to me about that international strategy a
36:25
Speaker 5: little bit further. I know in your earnings call you
36:26
Speaker 5: talked a little bit of Germany, a little bit of Friends,
36:30
Speaker 5: and you're in thirteen markets. How are you rolling out,
36:33
Speaker 5: where are you pushing into next and what are your
36:36
Speaker 5: challenges there that are distinct from your challenges in the
36:39
Speaker 5: US market.
36:41
Speaker 9: With respect to our G seven, we have losched in
36:43
Speaker 9: thirteen markets, but we're in several countries around the world.
36:47
Speaker 9: The challenges that are different is is who pays for
36:50
Speaker 9: it in the various geographies. You know, in the US,
36:55
Speaker 9: the majority of our venues have been US for quite
36:57
Speaker 9: some time with the insurance companies, but also AMS and
37:00
Speaker 9: the medicaid programs. In the outside the US, oftentimes it's
37:05
Speaker 9: the government who reimburses for continuous glucose monitoring, and they
37:10
Speaker 9: have various standards in their classifications of products. So for example,
37:15
Speaker 9: in some countries, they want to pay for a CGM
37:18
Speaker 9: that integrates with insulin pumps, has automated insulin delivery and
37:22
Speaker 9: reimburse at a higher price for that.
37:24
Speaker 7: They'll have a.
37:26
Speaker 9: Product that's a different classification that doesn't do as much
37:30
Speaker 9: that they want to reimburse less money on a monthly basis.
37:33
Speaker 9: For what we've done is we've created classes of products
37:37
Speaker 9: that will address all the needs based on the geographies.
37:40
Speaker 9: So you know, the UK is a perfect example. They
37:44
Speaker 9: have two classes of products. We developed a product called
37:47
Speaker 9: dex Com one. There is in this class that's not
37:50
Speaker 9: a connected system. Well, it does talk to your phone.
37:52
Speaker 9: It doesn't connect with other medical devices, whereas our G
37:55
Speaker 9: series or our G seven product will in fact eventually
37:59
Speaker 9: connect with an insulin pump or an insulin pen and
38:02
Speaker 9: provide patients with an integrated system. So what we've done
38:05
Speaker 9: in these geographies we assess the reimbursement strategies to whereby
38:10
Speaker 9: we can grow.
38:11
Speaker 7: We now offer the product.
38:12
Speaker 9: That's best for that geography, or are all the products
38:15
Speaker 9: if they'll reimburse for a family of products. And we've
38:17
Speaker 9: been able to pick up market share in those geographies
38:20
Speaker 9: and we analyze them one by one.
38:22
Speaker 1: Well I did some I'll get give you some real
38:24
Speaker 1: time feedback. I was on the beach in Jersey Shore
38:26
Speaker 1: this weekend. I went up to a person who had
38:28
Speaker 1: one of those patches and it looked just like the
38:31
Speaker 1: one from Dexcom. And I asked this person about it
38:34
Speaker 1: and she said, quote, it changed my life. So how
38:37
Speaker 1: about that? I mean, so that's got to be pretty good.
38:40
Speaker 9: It is spectacular. And I started to interrupt you, but
38:43
Speaker 9: it's the best part of my job when I run
38:45
Speaker 9: into one of our users. Literally, it's so great to
38:49
Speaker 9: hear their stories.
38:50
Speaker 1: Yep, you got some happy campers on the Jersey Shore.
38:53
Speaker 1: I want to ask you about kind of the market opportunity.
38:56
Speaker 1: I know in twenty twenty four you're thinking about getting
38:58
Speaker 1: a CGM product that can be utilized by the twenty
39:00
Speaker 1: eight million diabetic patients in the US that do not
39:04
Speaker 1: use insulin. What's the status of that role out and development.
39:09
Speaker 9: That product is in development right now. We will build
39:12
Speaker 9: it around our G seven technology from hardware and an
39:16
Speaker 9: accuracy performance perspective, but we want to create a different
39:19
Speaker 9: experience for those individuals, an experience that focuses more on
39:23
Speaker 9: their lifestyle, on the effects of nutrition, exercise, and things
39:27
Speaker 9: that they do taking their medications. You know, somebody who's
39:30
Speaker 9: on insulin, this is something that really does change their
39:33
Speaker 9: life because they rely on the alerts and the alarms
39:36
Speaker 9: and the integration of that product. Somebody would type two
39:39
Speaker 9: diabetes not on insulin. What they really need more is
39:41
Speaker 9: to understand how their body works and understand their health
39:45
Speaker 9: and understand what all the things they can do to
39:48
Speaker 9: make them more healthy to keep diabetes from progressing and advancing.
39:52
Speaker 9: And we are working on that. We're developing a completely
39:55
Speaker 9: new software experience for that product will be based on
39:58
Speaker 9: our G seven technology. We will submit that product to
40:03
Speaker 9: the FDA before the end of the year, and then
40:04
Speaker 9: we hope to launch it in twenty twenty four.
40:06
Speaker 5: And do you expect this to get broad coverage from
40:09
Speaker 5: insurers as well? Because I think there's probably a group
40:13
Speaker 5: of people who want to know about their and don't
40:16
Speaker 5: want to know about their health because they need to,
40:19
Speaker 5: and others that just want to know. How broad do
40:22
Speaker 5: you see the market? And then I guess what's your
40:25
Speaker 5: thinking with respect to coverage.
40:28
Speaker 9: Out of the gate, we'll have a cash pay option,
40:31
Speaker 9: and then we will continue to accumulate data in studies
40:34
Speaker 9: to make a case for reimbursement. You know, we've run
40:37
Speaker 9: numerous studies in this area. Every time we put patients
40:42
Speaker 9: on CGM, they get better outcomes than they had before
40:45
Speaker 9: significant ae C drops.
40:48
Speaker 7: One of the other.
40:49
Speaker 9: Statistics that's measured for people with diabetes is time and range.
40:53
Speaker 9: How much time during the day are you in a
40:55
Speaker 9: healthy range. We had a seven thousand patient study that
40:59
Speaker 9: we talk about at ADA where people experience the forty
41:03
Speaker 9: percent improvement in time and range by wearing a CGM
41:07
Speaker 9: who are not on inst I have type two diabetes.
41:09
Speaker 9: That time and range is what really leads to long
41:12
Speaker 9: term and short term better health, and so as we
41:16
Speaker 9: will accumulate data like that and ultimately seek reimbursement for
41:19
Speaker 9: people in this market.
41:20
Speaker 4: Yes, what's the.
41:22
Speaker 5: Impact of the rise and interest in GLP one drugs,
41:27
Speaker 5: which I know are diabetes drugs, but you know the
41:30
Speaker 5: ideas that you can use them for more than just
41:33
Speaker 5: diabetes alone.
41:35
Speaker 9: We think it's a natural fit for us. In all honesty,
41:38
Speaker 9: CGM delivers information you can't get any place else. And
41:42
Speaker 9: as I've spoken with physicians who use GLP once and
41:45
Speaker 9: CGM combined, what they tell us is these individuals learn
41:49
Speaker 9: from the CGM the effect that the change in their
41:52
Speaker 9: eating habits brought on by the golp ones. You know
41:55
Speaker 9: what it does to their bodies. So they learn from that,
41:58
Speaker 9: and so I think can go hand in hand. I
42:01
Speaker 9: think in this weight loss environment. Also, for example, I've
42:04
Speaker 9: spoke on physicians who put people on golp ones for
42:07
Speaker 9: some period of time that if they take them off,
42:10
Speaker 9: how do they know what's going on? How do they
42:12
Speaker 9: know they haven't reverted back to their old habits. It's
42:14
Speaker 9: very simple. You can put them on a CGM and
42:17
Speaker 9: they can see what their glucose values do I wonder.
42:19
Speaker 5: If that'sable, if a coverable.
42:21
Speaker 9: Thing hopefully over time, Yeah, we think it will be.
42:25
Speaker 1: Hey, Kevin, just real quick here, thirty seconds left. Give
42:29
Speaker 1: us a sense of your competitive environment here both in
42:31
Speaker 1: the US and then globally.
42:34
Speaker 9: It's a very competitive environment. US and Abbot are the
42:38
Speaker 9: two largest companies in the space. But the environment is
42:41
Speaker 9: so big, and the need is so on men, and
42:44
Speaker 9: the information is so important. Again, you look at our
42:46
Speaker 9: growth numbers and the opportunity we have in front of
42:49
Speaker 9: us will continue to compete very well. It is a
42:53
Speaker 9: great problem.
42:55
Speaker 7: To solve for us.
42:56
Speaker 1: And is this the opportunity outside the US? Is it
42:59
Speaker 1: just depend upon the I guess the development of the
43:02
Speaker 1: healthcare system there.
43:04
Speaker 9: It very frequently depends upon the reimbursement and the geography
43:07
Speaker 9: that we're trying to go to and where we don't
43:09
Speaker 9: have reimbursement. One of the things we kicked off this
43:12
Speaker 9: year is we do launch cash pay options in those
43:14
Speaker 9: countries through an e commerce platform, and a couple of
43:17
Speaker 9: times it's already led to the government's changing their position
43:21
Speaker 9: on reimbursement and covering our product because they see how
43:24
Speaker 9: many people literally rush to the cash option to buy
43:27
Speaker 9: it all.
43:28
Speaker 1: Right, Kevin, thanks for checking in with us. We appreciate it.
43:31
Speaker 1: Kevin Sayer is the CEO of dex Com.
43:34
Speaker 7: You're listening to the tape.
43:35
Speaker 6: Ken's our live program Bloomberg Markets weekdays at ten am
43:39
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43:42
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43:44
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43:53
Speaker 5: This is Simon and Paul. We've been around all morning
43:56
Speaker 5: and we're here for another couple another twenty minutes or so.
44:00
Speaker 5: Really interested in our next guest because part because of
44:05
Speaker 5: the name, which is Shark Ninja. Mark Rosenswig is CEO
44:09
Speaker 5: of Shark Ninja and they just rang the New York
44:12
Speaker 5: Stock Exchange bell this morning, publicly traded, and they've been
44:16
Speaker 5: through a little bit of an interesting corporate history. So
44:19
Speaker 5: this is the maker both of those Shark vacuums and
44:22
Speaker 5: Ninja blenders. They were a part of a Hong Kong
44:27
Speaker 5: listed company, apropos of our previous conversation, but now they
44:32
Speaker 5: have gone public and shares, yeah, through a spin out here.
44:36
Speaker 5: So Mark I want to bring you on as well.
44:40
Speaker 5: Looks like shares jumping higher in New York after this
44:46
Speaker 5: spin off today, talk me through why go it alone?
44:51
Speaker 5: Why spin out from JS Global?
44:55
Speaker 13: Yeah, well, thanks for having me. Look, Shark Ninja has
44:59
Speaker 13: a great story to tell, and we believe that it's
45:03
Speaker 13: the right place to tell that story is the New
45:06
Speaker 13: York Stock Exchange. Shark Ninja goes to market under two
45:10
Speaker 13: really well respected brands, as you mentioned, the Shark brand,
45:14
Speaker 13: which is a market leader in cleaning, home, environment and beauty,
45:18
Speaker 13: and the Ninja brand, which does just about everything in
45:21
Speaker 13: the kitchen and has now gone outside with our outdoor
45:25
Speaker 13: cooking appliances. We have a story of scale, nearly four
45:29
Speaker 13: billion dollars of revenue. We have a story of profitability.
45:33
Speaker 13: The business is highly profitable, and we have a story
45:37
Speaker 13: of growth and a demonstrated track record of organic growth.
45:41
Speaker 13: You know, we were a business back in two thousand
45:43
Speaker 13: and eight that was less than two hundred million dollars
45:45
Speaker 13: in revenue. Today nearly four billion. You know, all of
45:49
Speaker 13: that has been organic. We've never acquired a dollar of
45:52
Speaker 13: revenue in the company's history, and so we really believe
45:56
Speaker 13: that you know the right place for us is to
45:58
Speaker 13: be a standalone business on the New York Stock Exchange.
46:01
Speaker 5: Now, it's my impression you were the largest part of
46:06
Speaker 5: js Global or Shark Ninja was the largest part of
46:09
Speaker 5: Jazz Global. How did it come about that, you guys
46:12
Speaker 5: went your separate ways.
46:15
Speaker 13: Well, you know, Shark Ninja was owned by my partner
46:21
Speaker 13: Mark and I up until twenty seventeen, when we sold
46:24
Speaker 13: a majority stake in the business. We really wanted to
46:28
Speaker 13: bring a partner in to help globalize the business. Five
46:31
Speaker 13: and a half years later, the business is nearly has
46:34
Speaker 13: more than doubled in size.
46:37
Speaker 7: You know, we have a.
46:38
Speaker 13: Fast approaching billion dollar business outside of North America. You know,
46:43
Speaker 13: we you know, our customers, our consumers, you know are
46:47
Speaker 13: here in the United States. The United States are the
46:49
Speaker 13: largest market for us. We're based in Boston. We have
46:53
Speaker 13: a team of almost a thousand folks just outside of Boston.
46:58
Speaker 13: And so we really felt like being a subsidiary of
47:01
Speaker 13: a Hong Kong listed company wasn't the right place to
47:04
Speaker 13: tell the story.
47:05
Speaker 1: All right, So for your company, and I'm not familiar
47:08
Speaker 1: with your company, I have to admit talk to us
47:10
Speaker 1: about kind of your distribution model and kind of how
47:14
Speaker 1: that's evolved.
47:17
Speaker 13: Yeah, So the distribution model is that, you know, we
47:19
Speaker 13: sell to every major retailer in North America, in Europe.
47:25
Speaker 13: You know, we have a very strong dot com business.
47:28
Speaker 13: Our brands are the most search brands in our categories
47:30
Speaker 13: on Amazon, and we have a really healthy direct to
47:34
Speaker 13: consumer business. So our distribution model has really been based
47:39
Speaker 13: on the idea that we want to be relevant where
47:42
Speaker 13: the consumer chooses to shop for our products, if that
47:45
Speaker 13: happens to be in a retail store, grade, if it
47:48
Speaker 13: happens to be direct to consumer or go online. But
47:51
Speaker 13: that really is kind of how the model is not
47:54
Speaker 13: just in the US, but really in every market that
47:57
Speaker 13: we sell.
47:58
Speaker 1: Mark talk to us at the decision to spin off
48:01
Speaker 1: as opposed to perhaps an IPO, how did that play out?
48:06
Speaker 7: Well?
48:06
Speaker 13: When we made the decision to spin out and be
48:10
Speaker 13: a publicly listed company, you know, that was going back
48:13
Speaker 13: a number of months ago, and at the time, the
48:15
Speaker 13: IPO market in the US was quite challenged, and so
48:20
Speaker 13: you know, we really wanted certainty to become a US
48:24
Speaker 13: public company, and this gave us the most certainty to
48:27
Speaker 13: be able to do that. We think we have a
48:29
Speaker 13: great story. We think when investors hear the story. You know,
48:34
Speaker 13: many of these investors are already consumers of ours. I mean,
48:37
Speaker 13: our products are loved you know in in you know,
48:40
Speaker 13: millions and millions of homes across America. You know, investors
48:45
Speaker 13: will respond and and you know we will become a
48:48
Speaker 13: company of interest, you know, for for investors on the
48:51
Speaker 13: New York Stock Exchange.
48:53
Speaker 5: Talk to me about what you're seeing from consumers at
48:57
Speaker 5: the moment. Are you there has been some shift away
49:01
Speaker 5: from consumer discretionary products because consumers are feeling a pinch
49:06
Speaker 5: in their wallets. Are you seeing that or are you
49:10
Speaker 5: seeing consumers switched to different kinds of products.
49:15
Speaker 13: Look, I mean we're obviously you know, concern for consumers
49:21
Speaker 13: and the inflationary challenges that they've had over the course
49:24
Speaker 13: of the last few years. You know, we believe that
49:27
Speaker 13: Shark Ninja delivers incredible performance, high quality and reliable products,
49:34
Speaker 13: and we do it at an extraordinary value to the consumer.
49:37
Speaker 13: We're not the highest priced products in the market, we're
49:39
Speaker 13: not the lowest price, but we think that when the
49:42
Speaker 13: consumer buys a Sharker Ninja product, they're really, you know,
49:46
Speaker 13: getting extraordinary value. And I think that when you read
49:50
Speaker 13: consumer reviews of what people write about Shark and Ninja products.
49:54
Speaker 13: You'll see that coming through in those reviews. So, you know,
49:57
Speaker 13: we're a business that's grown fourteen out of the last
50:00
Speaker 13: fifteen years. We have strong growth in our first quarter.
50:04
Speaker 13: So we believe that if we can continue to give
50:08
Speaker 13: exciting innovation to consumers that solve their problems and continue
50:14
Speaker 13: to do it at a great value, that the consumer
50:16
Speaker 13: will respond.
50:18
Speaker 1: Mark what are the growth drivers over the next year
50:21
Speaker 1: to two for you guys?
50:24
Speaker 13: So for us, it's the same growth drivers that have
50:26
Speaker 13: been really in the business over the last you know,
50:29
Speaker 13: eight years. We've developed three strong pillars of organic growth,
50:34
Speaker 13: and that's the important word. They're organic, you know. The
50:38
Speaker 13: first is, you know, gaining share in the existing categories
50:42
Speaker 13: that we participate in. We're in big, definable categories and
50:46
Speaker 13: Shark Ninja has a demonstrated track record of being able
50:49
Speaker 13: to gain share in those categories. The second is expanding
50:53
Speaker 13: into new and adjacent product categories. We've expanded into ten
50:58
Speaker 13: new categories just over the last three years. Categories like
51:02
Speaker 13: beauty with our Shark Flex style hair dryer, categories like
51:06
Speaker 13: outdoor cooking with our Ninja wood fire grill. And the
51:09
Speaker 13: third is international expansion. I mentioned earlier that we are
51:12
Speaker 13: fast approaching a billion dollars in revenue outside of North America.
51:17
Speaker 13: So there's real scale in our international business, but there's
51:20
Speaker 13: still tremendous opportunity. I mean, Shark Ninja sells in twenty
51:24
Speaker 13: five countries around the world. We sell in twenty seven
51:29
Speaker 13: different product categories. We believe that there's more product categories
51:33
Speaker 13: for us to enter into, and we believe there's more
51:35
Speaker 13: markets for us to expand into. So that's really you know,
51:40
Speaker 13: driving those pillars of growth.
51:42
Speaker 1: Okay, excellent, Mark, thanks so much for joining us. We
51:45
Speaker 1: appreciate it. Mark barakas CEO and president of Shark Ninja.
51:49
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
51:53
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51:56
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52:00
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52:03
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