1 00:00:03,990 --> 00:00:07,050 Sean Aylmer: Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. This 2 00:00:07,050 --> 00:00:09,450 Sean Aylmer: is the most important time of the year for retailers 3 00:00:09,450 --> 00:00:12,148 Sean Aylmer: coming off the Black Friday, Cyber Monday sales, and now 4 00:00:12,150 --> 00:00:14,489 Sean Aylmer: they run up to Christmas and the post- Christmas sales, 5 00:00:15,000 --> 00:00:18,840 Sean Aylmer: but with consumers spending record amounts on Black Friday, some 6 00:00:18,840 --> 00:00:22,349 Sean Aylmer: retailers, notably Jerry Harvey, are predicting Christmas will be a 7 00:00:22,350 --> 00:00:25,529 Sean Aylmer: little slower this year. So what's it all mean for 8 00:00:25,530 --> 00:00:27,960 Sean Aylmer: investors in the sector? I wanted to look at some 9 00:00:27,960 --> 00:00:31,290 Sean Aylmer: of the household names across both consumer staples and discretionary 10 00:00:31,290 --> 00:00:34,319 Sean Aylmer: from Coles and Woolies, to places like Harvey Norman and 11 00:00:34,320 --> 00:00:37,380 Sean Aylmer: Breville. Remember, this is general information only and you should 12 00:00:37,380 --> 00:00:41,550 Sean Aylmer: seek professional advice before making any investment decision. Ben Gilbert 13 00:00:41,550 --> 00:00:44,639 Sean Aylmer: is the Head of Australian Research at Jarden, leading their 14 00:00:44,639 --> 00:00:47,848 Sean Aylmer: research team and consumer sector coverage. Ben, welcome back to 15 00:00:47,848 --> 00:00:48,479 Sean Aylmer: Fear and Greed. 16 00:00:49,110 --> 00:00:50,070 Ben Gilbert: Thank you very much for having me. 17 00:00:50,729 --> 00:00:54,360 Sean Aylmer: So where we are today, how big was Black Friday 18 00:00:54,420 --> 00:00:56,370 Sean Aylmer: and Cyber Monday for the retailers? 19 00:00:57,210 --> 00:00:59,250 Ben Gilbert: Look, it was big and I think it was better 20 00:00:59,250 --> 00:01:01,860 Ben Gilbert: than feared. We've got a bunch of data that's rolling 21 00:01:01,860 --> 00:01:04,920 Ben Gilbert: in from web traffic to credit card data to anecdotes, 22 00:01:04,920 --> 00:01:07,049 Ben Gilbert: and we've spoken to 20 plus companies in the last 23 00:01:07,049 --> 00:01:08,849 Ben Gilbert: couple of weeks, and I think generally speaking, it was 24 00:01:08,849 --> 00:01:11,549 Ben Gilbert: better than feared. Saw a little bit of growth. There 25 00:01:11,549 --> 00:01:14,670 Ben Gilbert: were some standout categories like electronics and gifting, but there 26 00:01:14,670 --> 00:01:17,250 Ben Gilbert: were also some softer categories like apparel. And I think 27 00:01:17,819 --> 00:01:20,339 Ben Gilbert: to your point and question in the opening that the million- 28 00:01:20,340 --> 00:01:22,559 Ben Gilbert: dollar question now is what does this mean for Christmas? 29 00:01:22,620 --> 00:01:24,480 Ben Gilbert: And I think the fear is that there's been a lot of 30 00:01:24,480 --> 00:01:27,000 Ben Gilbert: pull forward of Christmas spending. So it's going to be 31 00:01:27,000 --> 00:01:28,590 Ben Gilbert: very interesting next couple of weeks. 32 00:01:29,520 --> 00:01:32,790 Sean Aylmer: We don't really have history to guide us too much. 33 00:01:33,030 --> 00:01:35,310 Sean Aylmer: Black Friday, Cyber Monday's been around for a couple of 34 00:01:35,310 --> 00:01:37,260 Sean Aylmer: years, but it's not like we've got a long series 35 00:01:37,260 --> 00:01:40,200 Sean Aylmer: here to get a feel for what to expect. Is 36 00:01:40,200 --> 00:01:40,589 Sean Aylmer: that right? 37 00:01:41,370 --> 00:01:44,880 Ben Gilbert: Yeah, it's a relatively new phenomenon. We've borrowed or taken 38 00:01:44,880 --> 00:01:47,520 Ben Gilbert: this from the US and I think what we've found 39 00:01:47,520 --> 00:01:50,670 Ben Gilbert: is that it's got bigger and bigger every year. And what 40 00:01:50,670 --> 00:01:54,270 Ben Gilbert: it means is it creates some challenges with forecasting. It 41 00:01:54,270 --> 00:01:57,240 Ben Gilbert: also creates some challenges in terms of identifying where we're 42 00:01:57,240 --> 00:02:00,150 Ben Gilbert: at and how the consumers are positioned. What I think 43 00:02:00,150 --> 00:02:02,759 Ben Gilbert: we're finding now is that people are starting the promotions 44 00:02:02,759 --> 00:02:04,980 Ben Gilbert: earlier, and it's almost as if we've got a Cyber 45 00:02:04,980 --> 00:02:07,050 Ben Gilbert: Month because what you saw is a lot of discounting 46 00:02:07,050 --> 00:02:09,750 Ben Gilbert: that started at the beginning of November and carried right 47 00:02:09,750 --> 00:02:11,370 Ben Gilbert: through to the Cyber Weekend. 48 00:02:12,120 --> 00:02:16,888 Sean Aylmer: Okay, so moving away from specific sales events, the economy 49 00:02:16,889 --> 00:02:20,639 Sean Aylmer: itself, last week's economic growth and GDP figures certainly show 50 00:02:20,639 --> 00:02:24,450 Sean Aylmer: that household spending is struggling. Retail sales have struggled a 51 00:02:24,450 --> 00:02:27,930 Sean Aylmer: bit, high interest rates, high petrol prices, cost of living, 52 00:02:27,930 --> 00:02:30,660 Sean Aylmer: et cetera, et cetera. We've got low consumer confidence. How 53 00:02:30,660 --> 00:02:32,220 Sean Aylmer: much is that playing into all this? 54 00:02:33,090 --> 00:02:37,020 Ben Gilbert: Well, look, it's not easy out there, and I think if you look at it, while the 55 00:02:37,020 --> 00:02:39,209 Ben Gilbert: retail sales are still growing, if you look at it on 56 00:02:39,210 --> 00:02:41,879 Ben Gilbert: a per capita basis, we are technically in a bit 57 00:02:41,879 --> 00:02:45,270 Ben Gilbert: of a per capita consumer recession. But what's really carrying 58 00:02:45,270 --> 00:02:49,018 Ben Gilbert: us through at the moment is record levels of population growth, particularly 59 00:02:49,020 --> 00:02:52,080 Ben Gilbert: for working age population, and that's running upwards of 2. 60 00:02:52,410 --> 00:02:55,469 Ben Gilbert: 8%. If you look at confidence though, it's at recessionary 61 00:02:55,469 --> 00:02:57,690 Ben Gilbert: levels. If you look at how people are telling us in terms 62 00:02:57,690 --> 00:03:00,508 Ben Gilbert: of financial hardship, et cetera from the surveys, it's definitely 63 00:03:00,540 --> 00:03:03,210 Ben Gilbert: pretty challenging. And you're seeing big tick- ups. If you 64 00:03:03,210 --> 00:03:06,660 Ben Gilbert: look at spending by demographic, you're seeing some pretty weak 65 00:03:06,810 --> 00:03:11,069 Ben Gilbert: numbers for the younger demo who's mortgaged and might not 66 00:03:11,070 --> 00:03:13,770 Ben Gilbert: be able to go on the benefit from all the 67 00:03:13,770 --> 00:03:15,929 Ben Gilbert: rising rates now. But if you look at the boomers 68 00:03:15,929 --> 00:03:18,839 Ben Gilbert: and the older population, they're spending, they're going on holidays 69 00:03:18,840 --> 00:03:21,690 Ben Gilbert: or ski holidays as we call them, spending kids' inheritance. 70 00:03:21,990 --> 00:03:22,530 Sean Aylmer: I like them. 71 00:03:23,639 --> 00:03:25,110 Ben Gilbert: And what that's meaning is we've got a bit of 72 00:03:25,110 --> 00:03:27,089 Ben Gilbert: a haves and have- nots in retail at the moment. 73 00:03:27,750 --> 00:03:30,269 Sean Aylmer: Okay. So can we just go through some stocks? Let's 74 00:03:30,270 --> 00:03:32,609 Sean Aylmer: think of the staples first. And I actually want to 75 00:03:32,610 --> 00:03:35,219 Sean Aylmer: talk about the discretionary more than the staples, the Woolies, 76 00:03:35,219 --> 00:03:37,349 Sean Aylmer: the Coles of the world. What's the outlook for them 77 00:03:37,350 --> 00:03:38,580 Sean Aylmer: over the next 12 months or so? 78 00:03:39,150 --> 00:03:42,330 Ben Gilbert: Yeah, look, in theory in this sort of environment, supermarkets do 79 00:03:42,330 --> 00:03:45,510 Ben Gilbert: well because people don't eat out as much. They come 80 00:03:45,510 --> 00:03:47,910 Ben Gilbert: and eat at home, they trade down into private label, 81 00:03:47,910 --> 00:03:50,400 Ben Gilbert: which is typically high margin. And if you've got a 82 00:03:50,400 --> 00:03:53,339 Ben Gilbert: good value proposition, you can do well. What we are 83 00:03:53,340 --> 00:03:55,410 Ben Gilbert: finding though is that we've got a lot of cost pressures in 84 00:03:55,410 --> 00:03:58,140 Ben Gilbert: retail and that is causing some challenges. But look, ultimately, 85 00:03:58,140 --> 00:04:00,480 Ben Gilbert: I think Coles and Woolies should be pretty well positioned 86 00:04:00,540 --> 00:04:02,910 Ben Gilbert: over the next six to 12 months. We've got a 87 00:04:02,910 --> 00:04:05,250 Ben Gilbert: preference for Woolworths in the space. We like what they're 88 00:04:05,250 --> 00:04:08,189 Ben Gilbert: doing around data and loyalty, but ultimately, look, I think 89 00:04:08,189 --> 00:04:10,680 Ben Gilbert: the outlook in the return for the supermarkets is looking pretty positive. 90 00:04:11,219 --> 00:04:12,840 Sean Aylmer: Stay with me, Ben, we'll be back in a minute. 91 00:04:19,290 --> 00:04:22,049 Sean Aylmer: I'm speaking to Ben Gilbert, Head of Australian Research at 92 00:04:23,790 --> 00:04:27,029 Sean Aylmer: Jarden. Okay. What about some of the consumer discretionary stocks? I 93 00:04:27,029 --> 00:04:31,410 Sean Aylmer: know you cover everything from corporate travel management, which isn't 94 00:04:31,410 --> 00:04:35,580 Sean Aylmer: really in the retail space, through to Domino's and Harvey Norman, Hi- 95 00:04:35,580 --> 00:04:38,099 Sean Aylmer: Fi, etc. What about some of those electronic retailers? You 96 00:04:38,099 --> 00:04:40,380 Sean Aylmer: said they had a good Black Friday, Cyber Monday, so 97 00:04:40,620 --> 00:04:43,980 Sean Aylmer: Harvey Norman, JB Hi- Fi and that crowd. What's the outlook 98 00:04:43,980 --> 00:04:44,428 Sean Aylmer: for them? 99 00:04:45,599 --> 00:04:47,339 Ben Gilbert: Yeah, it's an interesting one because I think if you 100 00:04:47,339 --> 00:04:49,980 Ben Gilbert: look across the market at the moment, they're probably consensus 101 00:04:50,070 --> 00:04:53,760 Ben Gilbert: underweights or don't touch because you're seeing deflation coming through 102 00:04:53,760 --> 00:04:55,859 Ben Gilbert: in the categories. You've got discounting, you've got the likes 103 00:04:55,860 --> 00:04:58,410 Ben Gilbert: of Amazon that's growing at the rate of knots, but 104 00:04:58,410 --> 00:05:00,659 Ben Gilbert: they're continuing to trade well. And I think JB Hi- 105 00:05:00,660 --> 00:05:03,750 Ben Gilbert: Fi in particular is winning share. They're doing some good 106 00:05:03,750 --> 00:05:06,510 Ben Gilbert: things around targeted promotions and they've just got an offer 107 00:05:06,510 --> 00:05:10,080 Ben Gilbert: that resonates with the consumer. So while we're generally cautious 108 00:05:10,080 --> 00:05:13,049 Ben Gilbert: on the name, they're continuing to probably trade better than 109 00:05:13,050 --> 00:05:15,540 Ben Gilbert: we might've all thought. But again, I think the million- 110 00:05:15,540 --> 00:05:18,210 Ben Gilbert: dollar question is being a discretionary retailer, how much of 111 00:05:18,210 --> 00:05:20,789 Ben Gilbert: the strength that the category and most likely J. B 112 00:05:20,790 --> 00:05:23,399 Ben Gilbert: saw over the Cyber Weekend was a pull forward? And 113 00:05:24,360 --> 00:05:26,940 Ben Gilbert: so Christmas is obviously a very important time and if 114 00:05:26,940 --> 00:05:28,529 Ben Gilbert: it was a pull forward and there's a lot of gifting, 115 00:05:28,950 --> 00:05:31,320 Ben Gilbert: it could create some risk around that all important December 116 00:05:31,710 --> 00:05:32,790 Ben Gilbert: Boxing Day trading period. 117 00:05:33,839 --> 00:05:36,928 Sean Aylmer: What about the liquor stocks? Endeavor Group is an obvious 118 00:05:36,928 --> 00:05:40,649 Sean Aylmer: one, Treasury Wine Estates is another. I would've thought this 119 00:05:40,650 --> 00:05:43,049 Sean Aylmer: was a pretty good period for them. What do you think 120 00:05:43,049 --> 00:05:43,739 Sean Aylmer: of those guys? 121 00:05:44,549 --> 00:05:48,330 Ben Gilbert: Yeah, look, we like both of them at the moment. They're two very different 122 00:05:48,330 --> 00:05:53,279 Ben Gilbert: stories. I think Treasury has definitely surprised, maybe even shocked 123 00:05:53,279 --> 00:05:56,250 Ben Gilbert: a few people with the size and the materiality of the acquisition 124 00:05:56,250 --> 00:05:59,099 Ben Gilbert: they've made in the US recently. The focus has really 125 00:05:59,100 --> 00:06:02,460 Ben Gilbert: been around China and potentially the tariff seizing, which provides 126 00:06:02,460 --> 00:06:05,849 Ben Gilbert: a pretty significant opportunity. And we've generally been pretty positive 127 00:06:05,850 --> 00:06:08,729 Ben Gilbert: in terms of that opportunity, what it drives in terms 128 00:06:08,730 --> 00:06:11,339 Ben Gilbert: of both earnings and also just tightening up supply demand 129 00:06:11,339 --> 00:06:14,190 Ben Gilbert: for Penfolds. So look, if it does open, you're potentially 130 00:06:14,190 --> 00:06:16,800 Ben Gilbert: going to see some prices on your Penfolds product rise, 131 00:06:17,010 --> 00:06:19,380 Ben Gilbert: but it'll be pretty favorable for earnings and the China 132 00:06:19,380 --> 00:06:22,050 Ben Gilbert: benefit is not in their guidance. So we still like Treasury. 133 00:06:22,170 --> 00:06:24,480 Sean Aylmer: Sorry, just before we leave Treasury, and they've still got 134 00:06:24,960 --> 00:06:27,660 Sean Aylmer: this purchase they've done in the US, there's an integration 135 00:06:27,660 --> 00:06:28,500 Sean Aylmer: risk in that one though? 136 00:06:29,309 --> 00:06:32,580 Ben Gilbert: Yeah, look, potentially. There's always integration risk with acquisitions, but 137 00:06:32,580 --> 00:06:34,320 Ben Gilbert: I do think they've done, they've done a lot of 138 00:06:34,320 --> 00:06:36,900 Ben Gilbert: due diligence as you would expect and hope around that. 139 00:06:37,350 --> 00:06:40,589 Ben Gilbert: There are definitely some synergies as well from production. There's 140 00:06:40,589 --> 00:06:42,270 Ben Gilbert: some synergies in terms of they're going to be one 141 00:06:42,270 --> 00:06:46,529 Ben Gilbert: of the biggest, if not their biggest premium or luxury wine brand or company 142 00:06:46,529 --> 00:06:48,419 Ben Gilbert: in the US. So it provides scale with their customers, 143 00:06:48,420 --> 00:06:50,789 Ben Gilbert: which is always a positive. But look, I think that 144 00:06:50,790 --> 00:06:53,039 Ben Gilbert: the challenge and the focus with this is it's been on 145 00:06:53,039 --> 00:06:55,890 Ben Gilbert: some pretty exponential growth the last couple of years and 146 00:06:55,890 --> 00:06:58,890 Ben Gilbert: the million- dollar question is can they maintain that and can 147 00:06:58,890 --> 00:07:01,560 Ben Gilbert: they continue to expand it? And as we all know 148 00:07:01,560 --> 00:07:04,080 Ben Gilbert: with brands is that you can only stretch brands so 149 00:07:04,080 --> 00:07:06,300 Ben Gilbert: far. And the question is how much can you continue 150 00:07:06,300 --> 00:07:08,428 Ben Gilbert: to scale this brand up? But by all accounts, and 151 00:07:08,428 --> 00:07:10,319 Ben Gilbert: look, to be honest, I didn't know it before they'd 152 00:07:10,320 --> 00:07:13,410 Ben Gilbert: bought it, it's very well regarded. It's selling very well 153 00:07:13,470 --> 00:07:16,110 Ben Gilbert: and it's resonating very well with the US customer base. 154 00:07:16,650 --> 00:07:20,370 Sean Aylmer: Okay. Endeavour Group, totally different kettle, a lot of boardroom 155 00:07:20,910 --> 00:07:24,059 Sean Aylmer: shenanigans. Maybe you wouldn't use that word Ben Gilbert from 156 00:07:24,059 --> 00:07:26,009 Sean Aylmer: Jarden, but I'm going to use it. A lot of 157 00:07:26,009 --> 00:07:27,570 Sean Aylmer: carry on there. What about Endeavour? 158 00:07:28,650 --> 00:07:32,310 Ben Gilbert: Look, I think Endeavour's got a very, very strong set 159 00:07:32,310 --> 00:07:34,650 Ben Gilbert: of brands within its business. I think if all of 160 00:07:34,650 --> 00:07:36,300 Ben Gilbert: us sit around and say what are probably the two 161 00:07:36,300 --> 00:07:39,330 Ben Gilbert: most powerful brands in Australia or two of the strongest 162 00:07:39,330 --> 00:07:42,329 Ben Gilbert: brands? I'd be surprised if most people in that mix, 163 00:07:42,330 --> 00:07:44,820 Ben Gilbert: we didn't have Dan Murphy's and Bunnings. Dan Murphy's is 164 00:07:44,820 --> 00:07:47,639 Ben Gilbert: obviously part of the Endeavour stable, it's a powerhouse in 165 00:07:47,639 --> 00:07:50,400 Ben Gilbert: a liquor space. And look, the liquor market's been challenged. 166 00:07:50,670 --> 00:07:54,120 Ben Gilbert: People are generally drinking less but drinking more premium. But 167 00:07:54,120 --> 00:07:56,250 Ben Gilbert: I do think, look, in this environment as people are 168 00:07:56,250 --> 00:07:59,340 Ben Gilbert: seeking value, they're looking for better deals, they've obviously got 169 00:07:59,340 --> 00:08:02,429 Ben Gilbert: a pretty compelling price promise that they put out there, 170 00:08:02,429 --> 00:08:05,219 Ben Gilbert: it should trade relatively well. Albeit, as I said, the 171 00:08:05,219 --> 00:08:07,620 Ben Gilbert: liquor market has been challenged. And look, I think probably 172 00:08:07,620 --> 00:08:09,989 Ben Gilbert: one of the more exciting opportunities that's emerging now is 173 00:08:09,990 --> 00:08:13,080 Ben Gilbert: in the hotels division. They've recently had an Investor Day 174 00:08:13,410 --> 00:08:16,949 Ben Gilbert: and they've talked to aspirations to generate another $ 150 million 175 00:08:17,190 --> 00:08:19,500 Ben Gilbert: of EBIT out of that by fiscal '28. That's a 176 00:08:19,500 --> 00:08:22,409 Ben Gilbert: big number and that's well ahead of where the market 177 00:08:22,410 --> 00:08:25,110 Ben Gilbert: was thinking. And obviously what you find with companies, if 178 00:08:25,110 --> 00:08:27,810 Ben Gilbert: they can surprise positively on earnings, often the share price 179 00:08:27,810 --> 00:08:30,720 Ben Gilbert: will follow. So I think this is the big test 180 00:08:30,720 --> 00:08:32,970 Ben Gilbert: or question that's facing, or one of them that's facing 181 00:08:32,970 --> 00:08:35,610 Ben Gilbert: Endeavour at the moment, is can they hit that number? 182 00:08:35,910 --> 00:08:38,249 Ben Gilbert: Can they lift the returns within the business? And if 183 00:08:38,249 --> 00:08:40,440 Ben Gilbert: they can, I think the business is set to rerate and do 184 00:08:40,440 --> 00:08:40,890 Ben Gilbert: quite well. 185 00:08:42,030 --> 00:08:44,848 Sean Aylmer: Earlier on in this discussion, you talked about apparel being 186 00:08:44,850 --> 00:08:47,400 Sean Aylmer: a bit soft in the recent sales. I know you 187 00:08:47,400 --> 00:08:50,400 Sean Aylmer: cover I think Accent Group and Premier Investments, Ben. 188 00:08:51,510 --> 00:08:54,838 Ben Gilbert: Yeah, look, it's interesting with fashion because the data's telling 189 00:08:54,840 --> 00:08:57,299 Ben Gilbert: us it was softer, but you look at Premier who 190 00:08:57,299 --> 00:08:59,100 Ben Gilbert: came out with an update the other day, and Premier 191 00:08:59,100 --> 00:09:02,219 Ben Gilbert: being the owners of brands such as Peter Alexander and Smiggle and 192 00:09:02,219 --> 00:09:05,040 Ben Gilbert: Just Jeans and JJs to name a few, they had a very 193 00:09:05,040 --> 00:09:09,328 Ben Gilbert: strong result. They reported record sales and they've actually came 194 00:09:09,330 --> 00:09:12,449 Ben Gilbert: through and upgraded their numbers with the market. And what 195 00:09:12,450 --> 00:09:14,070 Ben Gilbert: they've said is it was going to be about 10% 196 00:09:14,070 --> 00:09:17,910 Ben Gilbert: higher than what the market was thinking. Share price reacted 197 00:09:17,910 --> 00:09:21,120 Ben Gilbert: accordingly, obviously going up. And I think it's just a testament to 198 00:09:21,120 --> 00:09:23,458 Ben Gilbert: how well this business is run. The other thing I 199 00:09:23,460 --> 00:09:25,380 Ben Gilbert: think that's interesting with something like Premier at the moment 200 00:09:25,380 --> 00:09:28,199 Ben Gilbert: is they're exploring a strategic review. Now at the moment, 201 00:09:28,200 --> 00:09:31,139 Ben Gilbert: they all fall under the Premier brand, but what's the 202 00:09:31,139 --> 00:09:33,809 Ben Gilbert: market speculating and we've written about is are they going 203 00:09:33,809 --> 00:09:36,660 Ben Gilbert: to split these brands up? Could we see Smiggle trade 204 00:09:36,660 --> 00:09:39,150 Ben Gilbert: as a separately listed entity? Could we see Peter Alexander 205 00:09:39,150 --> 00:09:42,210 Ben Gilbert: trade as a separately listed entity? Will these expand aggressively 206 00:09:42,210 --> 00:09:44,970 Ben Gilbert: offshore? Smiggle already is offshore, but a lot of opportunities. 207 00:09:44,970 --> 00:09:47,160 Ben Gilbert: So there's a lot happening and I think a lot to 208 00:09:47,160 --> 00:09:49,530 Ben Gilbert: like with Premier at the moment, and I think as I 209 00:09:49,530 --> 00:09:51,269 Ben Gilbert: said at the start, it's a testament to how well 210 00:09:51,270 --> 00:09:54,330 Ben Gilbert: the businesses run, the fact that they can continue taking share 211 00:09:54,450 --> 00:09:55,800 Ben Gilbert: when the market is still pretty challenged. 212 00:09:56,250 --> 00:09:57,960 Sean Aylmer: And I have to ask about Domino's, it's like one 213 00:09:57,960 --> 00:09:59,819 Sean Aylmer: of my all- time favorite stocks. I did do work 214 00:09:59,820 --> 00:10:01,290 Sean Aylmer: for them many years ago, so I have to put 215 00:10:01,290 --> 00:10:03,510 Sean Aylmer: that out there, but I've known the Chair quite well 216 00:10:03,510 --> 00:10:05,490 Sean Aylmer: over the years and the CEO and things like that. 217 00:10:05,759 --> 00:10:08,850 Sean Aylmer: But it has been like, well, a rollercoaster ride for Domino's. 218 00:10:10,080 --> 00:10:12,208 Ben Gilbert: It has. And I think more recently it's probably putting 219 00:10:12,208 --> 00:10:14,578 Ben Gilbert: it a nice way to call it a rollercoaster. They've 220 00:10:15,240 --> 00:10:18,030 Ben Gilbert: definitely had some challenges and I think they've been pretty 221 00:10:18,030 --> 00:10:21,088 Ben Gilbert: frank in coming forward with those and admitting to those 222 00:10:21,090 --> 00:10:24,000 Ben Gilbert: challenges. Look, I think that the thing with Domino's now is 223 00:10:24,000 --> 00:10:28,529 Ben Gilbert: that they're starting to really focus around the customer again. 224 00:10:28,529 --> 00:10:30,718 Ben Gilbert: Now, they've never lost sight of the customer, but they did 225 00:10:30,720 --> 00:10:34,260 Ben Gilbert: some things like putting delivery surcharges on, probably pushing price 226 00:10:34,260 --> 00:10:36,900 Ben Gilbert: a little bit too much, which they've all conceded, and they're 227 00:10:36,900 --> 00:10:38,729 Ben Gilbert: now really focusing and getting back to the core and 228 00:10:38,730 --> 00:10:42,090 Ben Gilbert: being the true value proposition in QSR. And now when 229 00:10:42,090 --> 00:10:44,368 Ben Gilbert: we're all sitting around and seeing our mortgages go up 230 00:10:44,429 --> 00:10:46,439 Ben Gilbert: week in, week out and pay more for our groceries, 231 00:10:46,500 --> 00:10:49,169 Ben Gilbert: if you want to treat your family or celebrate, you 232 00:10:49,170 --> 00:10:51,478 Ben Gilbert: can go and spend $ 30, $35 and you can get a couple of 233 00:10:51,480 --> 00:10:55,170 Ben Gilbert: pizzas, garlic bread and a Coke through them or Pepsi, 234 00:10:55,170 --> 00:10:59,280 Ben Gilbert: and obviously, it's a pretty attractive proposition. So look, we think 235 00:10:59,280 --> 00:11:01,859 Ben Gilbert: they're doing a much better job. They're also very focused 236 00:11:01,860 --> 00:11:04,709 Ben Gilbert: on costs. There's a pretty significant cost out program going 237 00:11:04,799 --> 00:11:07,350 Ben Gilbert: across the business at the moment. And similarly, they're also 238 00:11:07,350 --> 00:11:10,679 Ben Gilbert: very focused on returns. And when companies are really focused 239 00:11:10,679 --> 00:11:14,069 Ben Gilbert: on driving improving returns, generating more cash, again, the more 240 00:11:14,070 --> 00:11:15,630 Ben Gilbert: cash you've got as a business, the more cash you 241 00:11:15,630 --> 00:11:18,240 Ben Gilbert: generate, the more it's worth. So if they can execute 242 00:11:18,360 --> 00:11:20,880 Ben Gilbert: and they've got some guidance out there, I think it's 243 00:11:20,880 --> 00:11:23,010 Ben Gilbert: a pretty positive story. And we can see the share 244 00:11:23,010 --> 00:11:24,510 Ben Gilbert: price is a long way off where it has been 245 00:11:24,510 --> 00:11:26,309 Ben Gilbert: in the past, but it's not to say it can't 246 00:11:26,309 --> 00:11:29,790 Ben Gilbert: get back there again through successful execution and continuing to 247 00:11:29,790 --> 00:11:32,670 Ben Gilbert: expand in markets such as Germany, Japan and France. 248 00:11:33,179 --> 00:11:34,949 Sean Aylmer: I'm loving this, just running through these stocks. I'm going 249 00:11:34,950 --> 00:11:36,419 Sean Aylmer: to stop now, but I do have to have one 250 00:11:36,420 --> 00:11:39,299 Sean Aylmer: more sector, kind of retail. All the travel guys, Corporate 251 00:11:39,299 --> 00:11:43,020 Sean Aylmer: Travel, Flight Center, Hello World, Webjet I suppose is in that lot. 252 00:11:43,320 --> 00:11:45,870 Sean Aylmer: What's the outlook for that sector? 253 00:11:46,740 --> 00:11:48,360 Ben Gilbert: Yeah, look, travel's an easy one because if you're sitting 254 00:11:48,360 --> 00:11:50,460 Ben Gilbert: at the moment looking at all the economic data, you're thinking, " 255 00:11:50,460 --> 00:11:52,228 Ben Gilbert: Well, Jesus, this doesn't look good. I don't want to 256 00:11:52,230 --> 00:11:55,319 Ben Gilbert: be exposed to anything that's got a consumer tilt or 257 00:11:55,320 --> 00:11:58,228 Ben Gilbert: discretionary." But as we said at the start, you've got 258 00:11:58,230 --> 00:12:01,559 Ben Gilbert: the real exposure to the boomers and the older demographic 259 00:12:01,559 --> 00:12:04,890 Ben Gilbert: that are typically net cash or getting benefits from high 260 00:12:04,890 --> 00:12:07,440 Ben Gilbert: rates. And as a consequence, what are they doing? They're 261 00:12:07,440 --> 00:12:09,270 Ben Gilbert: traveling. And so if you look at the likes of 262 00:12:09,270 --> 00:12:13,050 Ben Gilbert: Flight Center, Hello world, they're all performing pretty strongly still 263 00:12:13,139 --> 00:12:15,509 Ben Gilbert: at the moment, had some positive updates and we're pretty 264 00:12:15,509 --> 00:12:17,758 Ben Gilbert: positive on the sector as a whole. WebBeds is a 265 00:12:17,760 --> 00:12:21,090 Ben Gilbert: little bit different... Sorry, Webjet, it's about WebBeds, which is 266 00:12:21,090 --> 00:12:23,130 Ben Gilbert: their bed bank. And this is a business that I 267 00:12:23,130 --> 00:12:25,860 Ben Gilbert: think is going to be a global player. It already 268 00:12:25,860 --> 00:12:29,519 Ben Gilbert: is. It's got a pretty significant and attractive opportunity, and 269 00:12:29,520 --> 00:12:31,200 Ben Gilbert: I think it's one that can drive this stock to 270 00:12:31,200 --> 00:12:34,319 Ben Gilbert: rerate. It's not well understood or appreciated by the market. 271 00:12:34,889 --> 00:12:38,489 Sean Aylmer: I'm going to be very ignorant, WebBed, what is it? 272 00:12:39,509 --> 00:12:42,838 Ben Gilbert: It's a bed bank. So you think, if you're a 273 00:12:42,840 --> 00:12:46,379 Ben Gilbert: hotel, you'll put your inventory, being your rooms, into a 274 00:12:46,380 --> 00:12:49,409 Ben Gilbert: centralized player and they'll then go out and distribute that. 275 00:12:49,500 --> 00:12:52,289 Ben Gilbert: They'll try to optimize pricing. They'll try to get you 276 00:12:52,289 --> 00:12:56,250 Ben Gilbert: to the right customers. So it's an interesting phenomenon and they're 277 00:12:56,250 --> 00:12:58,530 Ben Gilbert: a top three player globally in that space now and 278 00:12:58,530 --> 00:12:59,160 Ben Gilbert: growing strongly. 279 00:13:00,420 --> 00:13:02,189 Sean Aylmer: Something to think about. Ben, thank you for talking to 280 00:13:02,190 --> 00:13:02,880 Sean Aylmer: Fear and Greed. 281 00:13:03,389 --> 00:13:04,499 Ben Gilbert: No problem at all. Thanks for having me. 282 00:13:05,129 --> 00:13:07,889 Sean Aylmer: That was Ben Gilbert, Head of Australian Research at Jarden. 283 00:13:07,889 --> 00:13:10,019 Sean Aylmer: This is the Fear and Greed Business Interview. Remember, this 284 00:13:10,020 --> 00:13:12,660 Sean Aylmer: is general information only, and you should always seek professional 285 00:13:12,660 --> 00:13:15,960 Sean Aylmer: advice before making investment decisions. Join us every morning for 286 00:13:15,960 --> 00:13:18,179 Sean Aylmer: the full episode of Fear and Greed, Australia's Best business 287 00:13:18,179 --> 00:13:20,490 Sean Aylmer: podcast. I'm Sean Aylmer. Enjoy your day.