1 00:00:00,280 --> 00:00:11,400 Speaker 1: Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,480 --> 00:00:13,560 Speaker 1: with Scarletfoo and Paul Sweeney. 3 00:00:13,680 --> 00:00:15,800 Speaker 2: How do you think the FED is looking at tariffs? 4 00:00:15,920 --> 00:00:17,160 Speaker 2: The uncertainty of terriffs. 5 00:00:17,200 --> 00:00:19,200 Speaker 3: Let's take a look at the sectors and how. 6 00:00:19,079 --> 00:00:21,320 Speaker 2: They performed a lot of investors getting whip saled every 7 00:00:21,360 --> 00:00:22,759 Speaker 2: day by news events. 8 00:00:22,440 --> 00:00:26,200 Speaker 1: Breaking market headlines and corporate news from across the globe. 9 00:00:26,200 --> 00:00:28,800 Speaker 3: Could we see a market disruption of market events? 10 00:00:28,920 --> 00:00:30,920 Speaker 2: So people just too exuberant out there? 11 00:00:31,040 --> 00:00:33,600 Speaker 3: You see some so called low quality stocks driving this 12 00:00:33,680 --> 00:00:34,480 Speaker 3: short term rally. 13 00:00:34,520 --> 00:00:39,320 Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, 14 00:00:39,479 --> 00:00:41,360 Speaker 1: YouTube and Bloomberg Originals. 15 00:00:42,240 --> 00:00:44,479 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 16 00:00:44,520 --> 00:00:46,800 Speaker 2: business story is impacting Wall Street and the global markets. 17 00:00:47,040 --> 00:00:49,280 Speaker 3: Each and every week we provide in depth research and 18 00:00:49,360 --> 00:00:51,199 Speaker 3: data on some of the two thousand companies and one 19 00:00:51,280 --> 00:00:53,760 Speaker 3: hundred and thirty industries are analysts covered worldwide. 20 00:00:53,800 --> 00:00:55,520 Speaker 2: Today, we'll look at earnings reports from some of the 21 00:00:55,520 --> 00:00:57,520 Speaker 2: world's largest retailers. 22 00:00:57,000 --> 00:00:59,360 Speaker 3: Plus look at why the Danish drug maker Novo Nordisk 23 00:00:59,400 --> 00:01:02,160 Speaker 3: will be further lowering the prices of its obesity drugs 24 00:01:02,160 --> 00:01:03,880 Speaker 3: for cash paying patients first. 25 00:01:03,920 --> 00:01:06,319 Speaker 2: We'll begin with earnings from chip Giant and Video. 26 00:01:06,560 --> 00:01:09,000 Speaker 3: This week, the company reported third quarter earnings that topped 27 00:01:09,040 --> 00:01:12,800 Speaker 3: analyst estimates, and Vidia also delivered a surprisingly strong revenue 28 00:01:12,800 --> 00:01:15,600 Speaker 3: forecast and pushback on the idea that the AI industry 29 00:01:15,880 --> 00:01:16,680 Speaker 3: is in a bubble. 30 00:01:16,880 --> 00:01:19,720 Speaker 2: For more, we were joined by Kunjohn Sabani, Bloomberg Intelligence 31 00:01:19,800 --> 00:01:23,240 Speaker 2: Senior Semiconductor analyst. We first asked Kunjohn for his take 32 00:01:23,319 --> 00:01:24,520 Speaker 2: on in Vidia this week. 33 00:01:24,720 --> 00:01:27,360 Speaker 4: This was one of the more bullish earnings we have 34 00:01:27,440 --> 00:01:30,720 Speaker 4: seen from this name in a while, not just on 35 00:01:30,800 --> 00:01:32,800 Speaker 4: the numbers of the three Q four Q guide, which 36 00:01:32,840 --> 00:01:36,840 Speaker 4: they blew past even the loftiest Byside targets, but just 37 00:01:36,920 --> 00:01:39,720 Speaker 4: beyond that the long term the twenty six sort of 38 00:01:40,240 --> 00:01:43,240 Speaker 4: and going into twenty seven demands signals that they showed, 39 00:01:43,760 --> 00:01:46,360 Speaker 4: namely the half a trillion of the pipeline, which we 40 00:01:46,480 --> 00:01:49,520 Speaker 4: think now is a conservative number given the number of 41 00:01:49,520 --> 00:01:52,040 Speaker 4: deals they have announced. If supply keeps on coming up 42 00:01:52,160 --> 00:01:55,600 Speaker 4: as it has, and if their customers continue executing on 43 00:01:55,680 --> 00:01:59,320 Speaker 4: these bills without any missteps, we think their significant upside 44 00:01:59,360 --> 00:02:00,600 Speaker 4: to the current numbers. 45 00:02:01,160 --> 00:02:04,080 Speaker 3: Yeah, just looking through the numbers, clearly a beaten Rais report, 46 00:02:04,160 --> 00:02:06,320 Speaker 3: but you know, the scale at which it can be 47 00:02:06,520 --> 00:02:10,320 Speaker 3: in race is impressive. Although within the third quarter numbers, 48 00:02:10,720 --> 00:02:13,560 Speaker 3: I did see that chips used in gaming PCs missed 49 00:02:13,600 --> 00:02:16,280 Speaker 3: analess estimates, and I know that that's a shrinking part 50 00:02:16,320 --> 00:02:18,280 Speaker 3: of the business, or at least it's not as big 51 00:02:18,320 --> 00:02:20,760 Speaker 3: a part of the business, given that the data center 52 00:02:20,960 --> 00:02:24,000 Speaker 3: is where the growth is really at. Are there any 53 00:02:24,040 --> 00:02:26,120 Speaker 3: flaws in this earnings report? Conjohn? 54 00:02:26,520 --> 00:02:29,120 Speaker 4: Not really? I mean, look, the gaming is becoming so 55 00:02:29,400 --> 00:02:33,920 Speaker 4: unimportant for analysts that the reliability of the predictability of 56 00:02:33,960 --> 00:02:36,079 Speaker 4: those numbers against which we are comparing the bet and 57 00:02:36,160 --> 00:02:39,800 Speaker 4: miss for gaming is no longer as reliable. So no 58 00:02:39,960 --> 00:02:42,639 Speaker 4: real flaws to really point out in this. We did 59 00:02:42,760 --> 00:02:46,960 Speaker 4: see their supply commitments go up quarter work quarter and 60 00:02:47,000 --> 00:02:50,720 Speaker 4: inventory is rising. I don't think that's a negative. While 61 00:02:50,720 --> 00:02:53,600 Speaker 4: it might seem on the face that's just them getting 62 00:02:53,680 --> 00:02:56,360 Speaker 4: up and getting ready for that next wave to supply 63 00:02:56,480 --> 00:02:57,560 Speaker 4: the chips in the next year. 64 00:02:57,840 --> 00:03:00,560 Speaker 2: So could John what's the latest and Gentin want about 65 00:03:00,560 --> 00:03:03,000 Speaker 2: how he've used China going forward? 66 00:03:03,600 --> 00:03:06,400 Speaker 4: Nothing has changed on the China side. They still don't 67 00:03:06,440 --> 00:03:09,919 Speaker 4: assume any revenues when it comes to data center AI 68 00:03:10,160 --> 00:03:12,959 Speaker 4: China GPUs or the H twenty has been shipped into 69 00:03:13,200 --> 00:03:16,000 Speaker 4: They do have the clearance licenses so they could, but 70 00:03:16,080 --> 00:03:19,240 Speaker 4: it seems because of the geopolitical issues, China has basically 71 00:03:19,320 --> 00:03:23,520 Speaker 4: been shut down for American GPU providers or AC providers 72 00:03:23,520 --> 00:03:25,560 Speaker 4: to be able to ship in the country. There isn't, 73 00:03:25,800 --> 00:03:27,880 Speaker 4: to be honest, no demand. So it seems, you know, 74 00:03:28,160 --> 00:03:31,519 Speaker 4: because of geopolitical issues, the customers in China are not 75 00:03:31,840 --> 00:03:34,160 Speaker 4: just reading and getting up to buy in media chips 76 00:03:34,200 --> 00:03:34,560 Speaker 4: right now. 77 00:03:34,800 --> 00:03:37,760 Speaker 3: Jensenhang said that he from his vantage point, does not 78 00:03:37,960 --> 00:03:41,000 Speaker 3: see anything like an AI bubble. We see something very different, 79 00:03:41,120 --> 00:03:44,560 Speaker 3: and he says competitive pressures remain fairly low because this 80 00:03:44,640 --> 00:03:46,640 Speaker 3: is a company with more than ninety percent of the 81 00:03:46,680 --> 00:03:51,520 Speaker 3: market for those high end super fast AI chips. Who 82 00:03:51,600 --> 00:03:54,640 Speaker 3: is the closest competitor if there is one t Invidia. 83 00:03:55,040 --> 00:03:57,320 Speaker 4: Yeah, in terms of the size of the markets, the 84 00:03:57,360 --> 00:04:01,400 Speaker 4: next closest competitor would be the AIA six chips, So 85 00:04:01,520 --> 00:04:04,640 Speaker 4: Broadcome is one of the biggest providers of AI six chips, 86 00:04:04,720 --> 00:04:08,280 Speaker 4: namely the TPU that Google uses. Another example would be 87 00:04:08,360 --> 00:04:13,640 Speaker 4: Amazon's Treanium chips, which are on different AI asic designers supply. 88 00:04:13,800 --> 00:04:16,479 Speaker 4: So in terms of revenues, or units in terms of 89 00:04:16,520 --> 00:04:19,840 Speaker 4: the market that those are the next closest competitors within 90 00:04:19,960 --> 00:04:23,840 Speaker 4: Nvidia's realm, which it sells merchant gipus, AMD would be 91 00:04:23,880 --> 00:04:26,440 Speaker 4: the second closest competitor in that our Thanks. 92 00:04:26,279 --> 00:04:30,040 Speaker 3: To Kunjan Sabani, Bloomberg Intelligence Senior semiconductor analyst. 93 00:04:29,839 --> 00:04:31,440 Speaker 2: We continue in the tech space. 94 00:04:31,800 --> 00:04:33,880 Speaker 3: This week we heard that the tech giants Microsoft and 95 00:04:33,960 --> 00:04:36,960 Speaker 3: Nvidia are committing to invest up to a combined fifteen 96 00:04:37,120 --> 00:04:40,279 Speaker 3: billion dollars in the AI research and development company Anthropic. 97 00:04:40,600 --> 00:04:42,840 Speaker 2: We heard the investment will be part of anthropics next 98 00:04:42,839 --> 00:04:45,919 Speaker 2: funding round. The companies also said Anthropic has committed to 99 00:04:45,920 --> 00:04:49,720 Speaker 2: purchase thirty billion dollars of computing capacity for Microsoft's Azure 100 00:04:49,760 --> 00:04:50,520 Speaker 2: cloud service. 101 00:04:50,680 --> 00:04:53,000 Speaker 3: So of course we had to enlist. Mandeep Singh, global 102 00:04:53,000 --> 00:04:55,320 Speaker 3: tech research head at Bloomberg Intelligence. 103 00:04:55,040 --> 00:04:56,840 Speaker 2: First asked man Deep to tell us a little more 104 00:04:56,839 --> 00:04:59,039 Speaker 2: about Anthropic and what it does well. 105 00:04:59,160 --> 00:05:04,280 Speaker 5: Anthropic is one of the five frontier lms that are remaining, 106 00:05:04,360 --> 00:05:06,279 Speaker 5: I mean, and they are leading the charge when it 107 00:05:06,320 --> 00:05:08,719 Speaker 5: comes to generative AI. So it's one of the five. 108 00:05:09,320 --> 00:05:14,600 Speaker 5: The other one are Google, Open Ai, Meta and XAI. 109 00:05:14,960 --> 00:05:19,159 Speaker 5: And so look, when it comes to these commitments, it's 110 00:05:19,240 --> 00:05:23,000 Speaker 5: pretty obvious that open Ai has raised the bar by 111 00:05:23,040 --> 00:05:26,600 Speaker 5: announcing they're going to spend one point four trillion. So 112 00:05:26,640 --> 00:05:29,800 Speaker 5: the question is what are the other LLM companies going 113 00:05:29,880 --> 00:05:33,520 Speaker 5: to do? And Entropic is also a pure play LLLM, 114 00:05:33,600 --> 00:05:36,680 Speaker 5: and in their case, they don't have the funding. I mean, 115 00:05:36,760 --> 00:05:39,880 Speaker 5: they don't have the balance sheet like Google or Meta have, 116 00:05:40,640 --> 00:05:42,840 Speaker 5: so they have to raise the money either in the 117 00:05:42,920 --> 00:05:47,280 Speaker 5: private markets or from someone like Nvidia, or get into 118 00:05:47,320 --> 00:05:51,040 Speaker 5: an agreement with Microsoft, which also has an agreement with 119 00:05:51,120 --> 00:05:56,520 Speaker 5: open Ai. So that's where you know. Llms need compute. 120 00:05:56,640 --> 00:05:59,840 Speaker 5: That's how you serve billion plus users, and that's where 121 00:05:59,839 --> 00:06:02,200 Speaker 5: you know the numbers get bigger and bigger when it 122 00:06:02,240 --> 00:06:04,840 Speaker 5: comes to the tie ups with cloud provider. 123 00:06:04,960 --> 00:06:07,279 Speaker 3: This is like the popular click in high school, where 124 00:06:07,279 --> 00:06:10,200 Speaker 3: everyone knows each other and everyone's messing around with each other. 125 00:06:12,200 --> 00:06:14,359 Speaker 3: Just give us a little bit of background here on Anthropic, 126 00:06:14,480 --> 00:06:17,440 Speaker 3: because my understanding is that it was founded by folks 127 00:06:17,480 --> 00:06:20,000 Speaker 3: who used to work at open Ai and some of 128 00:06:20,080 --> 00:06:24,520 Speaker 3: the early investors like big stakeholders include Alphabet and include 129 00:06:24,600 --> 00:06:27,000 Speaker 3: Amazon and now you've got Microsoft in there. I mean, 130 00:06:27,080 --> 00:06:29,760 Speaker 3: is there anyone who's not part of Anthropic and not 131 00:06:29,880 --> 00:06:32,480 Speaker 3: committed to investing in this company. 132 00:06:32,800 --> 00:06:36,400 Speaker 5: Well, you could say Meta, they're doing things. 133 00:06:36,560 --> 00:06:37,280 Speaker 3: They're doing their own thing. 134 00:06:37,360 --> 00:06:40,560 Speaker 5: They are doing their own thing in terms of, you know, 135 00:06:40,720 --> 00:06:43,960 Speaker 5: using the computer internally, and they don't have a cloud business. 136 00:06:44,320 --> 00:06:46,400 Speaker 3: Is that a problem for them that Meta's out there 137 00:06:46,440 --> 00:06:47,680 Speaker 3: on its own I know, it doesn't have its own 138 00:06:47,720 --> 00:06:51,240 Speaker 3: cloud business, but it's not buying stakes or committed to 139 00:06:51,279 --> 00:06:53,560 Speaker 3: invest up to five billion or ten billion in any 140 00:06:53,600 --> 00:06:55,200 Speaker 3: of these AI companies. 141 00:06:55,320 --> 00:06:58,560 Speaker 5: I mean so far, just to go to Meta, it 142 00:06:58,600 --> 00:07:02,279 Speaker 5: feels like, you know, investors were okay with them using 143 00:07:02,320 --> 00:07:05,560 Speaker 5: the GPU compute for their own family of apps. But 144 00:07:05,640 --> 00:07:08,360 Speaker 5: the fact that they're talking about one hundred billion plus 145 00:07:08,360 --> 00:07:12,760 Speaker 5: in capex for next year without having a substantial ROI 146 00:07:12,800 --> 00:07:15,320 Speaker 5: and what I mean by rois in the case of Microsoft, 147 00:07:15,760 --> 00:07:18,920 Speaker 5: yes they're raising their CAPEX two hundred and twenty billion, 148 00:07:19,200 --> 00:07:21,800 Speaker 5: but they're winning deals like the one with Nthropic thirty 149 00:07:21,840 --> 00:07:26,000 Speaker 5: billion dollar in commitment from Entropic, so somebody is paying 150 00:07:26,080 --> 00:07:29,040 Speaker 5: for that compute. In the case of Microsoft, you don't 151 00:07:29,080 --> 00:07:32,880 Speaker 5: have that with a Meta. How are you generating ROI 152 00:07:32,960 --> 00:07:36,080 Speaker 5: outside of your family of apps? And over there you 153 00:07:36,120 --> 00:07:39,800 Speaker 5: have to show a really substantial increase in engagement to 154 00:07:39,920 --> 00:07:42,920 Speaker 5: convince investors it's worth hundred billion plus in capex. 155 00:07:43,560 --> 00:07:47,280 Speaker 2: Any of these open aies anthropics, are they going to 156 00:07:47,320 --> 00:07:48,440 Speaker 2: ever come public? Do you think? 157 00:07:49,360 --> 00:07:52,480 Speaker 5: I mean, in the case of Entropic, look, I know 158 00:07:53,120 --> 00:07:56,120 Speaker 5: the numbers are getting big, but their gross margins at 159 00:07:56,120 --> 00:07:59,440 Speaker 5: this point are probably better than open AI, which is 160 00:07:59,440 --> 00:08:01,720 Speaker 5: doing too much any things. I mean, the biggest risk 161 00:08:01,800 --> 00:08:05,240 Speaker 5: I see for Opening Eyes they feel they can get 162 00:08:05,280 --> 00:08:09,320 Speaker 5: into any business, whether it's chip business, whether it's you know, 163 00:08:09,400 --> 00:08:13,400 Speaker 5: obviously LLLM is their turf, any type of applications, and 164 00:08:13,520 --> 00:08:16,200 Speaker 5: that's where there's a possibility of a misstep. You can 165 00:08:16,280 --> 00:08:20,160 Speaker 5: end up wasting time because you just don't have, uh, 166 00:08:20,360 --> 00:08:23,960 Speaker 5: you know, the capability. Yeah, the focus Entropic is more. 167 00:08:23,760 --> 00:08:26,840 Speaker 3: Focused our thanks Toman deep saying, global tech research head 168 00:08:26,880 --> 00:08:28,000 Speaker 3: at Bloomberg Intelligence. 169 00:08:28,200 --> 00:08:29,840 Speaker 2: We move next to some earnings from some of the 170 00:08:29,880 --> 00:08:31,360 Speaker 2: world's largest retailers. 171 00:08:31,560 --> 00:08:32,000 Speaker 1: This week. 172 00:08:32,080 --> 00:08:34,560 Speaker 3: Target posted a drop in third quarter sales due to 173 00:08:34,600 --> 00:08:38,319 Speaker 3: intense competition and a weakening economy, with shoppers pulling back 174 00:08:38,360 --> 00:08:39,600 Speaker 3: on apparel and home goods. 175 00:08:39,720 --> 00:08:43,280 Speaker 2: Separately, Walmart reported third quarter earnings that beat analysts expectations. 176 00:08:43,640 --> 00:08:46,040 Speaker 2: The retailer also increased its outlook for sales in the 177 00:08:46,080 --> 00:08:48,959 Speaker 2: full year. It's a sign Walmart is winning over priced 178 00:08:49,000 --> 00:08:52,240 Speaker 2: sensitive shoppers while digesting costs it expects to rise in 179 00:08:52,280 --> 00:08:52,960 Speaker 2: the coming months. 180 00:08:53,000 --> 00:08:55,800 Speaker 3: For more, we were joined by Jennifer bartashis Bloomberg Intelligence 181 00:08:55,880 --> 00:08:58,560 Speaker 3: senior analysts covering retail staples and packaged foods. 182 00:08:58,760 --> 00:09:00,640 Speaker 2: First test jenf for her take on the most recent 183 00:09:00,679 --> 00:09:01,640 Speaker 2: results at Walmart. 184 00:09:02,040 --> 00:09:04,880 Speaker 6: You know, Walmart had another good quarter, and I think 185 00:09:04,880 --> 00:09:07,400 Speaker 6: that it's very easy to attribute a lot of their 186 00:09:07,440 --> 00:09:10,640 Speaker 6: success to just the value seeking behavior of consumers in 187 00:09:10,679 --> 00:09:13,240 Speaker 6: this environment. But I think that would also be overlooking 188 00:09:13,280 --> 00:09:15,320 Speaker 6: a lot of the investments they've made in things like 189 00:09:15,400 --> 00:09:18,960 Speaker 6: convenience that is really spurring the e commerce growth. And 190 00:09:19,000 --> 00:09:20,520 Speaker 6: that was really a notable takeaway. 191 00:09:20,720 --> 00:09:25,160 Speaker 3: Yeah, that e commerce aspect helps draw on higher income shoppers, 192 00:09:25,200 --> 00:09:27,720 Speaker 3: so it's a larger pool of customers at Walmart now 193 00:09:27,760 --> 00:09:30,640 Speaker 3: has access to and in our Bloomberg News reporting we 194 00:09:30,720 --> 00:09:33,959 Speaker 3: indicate that the digital offerings now include luxury items like 195 00:09:34,040 --> 00:09:37,079 Speaker 3: pre owned Chanel bags. I had no idea that that 196 00:09:37,160 --> 00:09:39,040 Speaker 3: kind of stuff was available on walmart dot com. 197 00:09:39,760 --> 00:09:42,000 Speaker 6: Well, you know, Walmart has done a lot to really 198 00:09:42,080 --> 00:09:45,720 Speaker 6: expand its marketplace, and that includes bringing in items that 199 00:09:45,960 --> 00:09:49,160 Speaker 6: you know, will appeal to that higher income consumer, you know, 200 00:09:49,200 --> 00:09:51,720 Speaker 6: And the tactic behind all of this is that the 201 00:09:51,920 --> 00:09:55,480 Speaker 6: more people are integrated with e commerce in going to stores, 202 00:09:55,559 --> 00:09:58,760 Speaker 6: they become sticky and they become loyal customers, so that 203 00:09:58,840 --> 00:10:02,520 Speaker 6: when the macre can comic backdrop fades, it really increases 204 00:10:02,520 --> 00:10:05,960 Speaker 6: Walmart's ability to hang onto these customers going forward, and 205 00:10:06,000 --> 00:10:09,080 Speaker 6: that just drives future growth. So it's a really interesting 206 00:10:09,120 --> 00:10:10,880 Speaker 6: play out of how they're applying that tactic. 207 00:10:11,480 --> 00:10:14,000 Speaker 3: Jen, I also want to get your take on Walmart transferring. 208 00:10:14,000 --> 00:10:17,200 Speaker 3: It's listing to the NASAC that's going to happen on 209 00:10:17,240 --> 00:10:20,240 Speaker 3: December ninth, and that of course is to reflect as 210 00:10:20,280 --> 00:10:23,560 Speaker 3: focus on being a tech forward company. But I'm wondering, 211 00:10:23,600 --> 00:10:25,360 Speaker 3: I mean, how much of this is really just about 212 00:10:25,400 --> 00:10:27,880 Speaker 3: being included in the Nazak one hundred and therefore the 213 00:10:27,960 --> 00:10:30,559 Speaker 3: qqq etl Oh. 214 00:10:30,679 --> 00:10:33,400 Speaker 6: Yeah, there's certainly part of that scarlet where you know, 215 00:10:33,480 --> 00:10:36,360 Speaker 6: that's that's probably part of the motivation. I think that 216 00:10:36,440 --> 00:10:39,960 Speaker 6: there is. You know, obviously there's a perception with regards 217 00:10:40,040 --> 00:10:42,960 Speaker 6: to being perceived more as a tech company, which Walmart 218 00:10:43,040 --> 00:10:47,320 Speaker 6: in all truthfulness, has evolved into a tech company, especially 219 00:10:47,360 --> 00:10:51,720 Speaker 6: amongst other retailers. By being listed at NASDAK, you know, 220 00:10:51,840 --> 00:10:54,800 Speaker 6: long term, maybe it helps their valuation, you know, just 221 00:10:54,840 --> 00:10:58,040 Speaker 6: in terms of having that perception of being more you know, 222 00:10:58,120 --> 00:11:01,600 Speaker 6: aligned with peers. You know, Amazon listed on Nasdaq, things 223 00:11:01,640 --> 00:11:03,200 Speaker 6: like that. So I think that there's a lot of 224 00:11:03,200 --> 00:11:07,480 Speaker 6: those components together combined, are really behind the move. 225 00:11:08,000 --> 00:11:11,040 Speaker 2: Jen nobody arguably has a better finger on the pulse 226 00:11:11,040 --> 00:11:13,600 Speaker 2: of the consumer than Walmart. What are they saying these days? 227 00:11:14,120 --> 00:11:18,280 Speaker 6: Actually, they seem relatively optimistic. You know, they talk about 228 00:11:18,320 --> 00:11:20,840 Speaker 6: you know, spending, holding study for kind of that middle 229 00:11:20,880 --> 00:11:24,440 Speaker 6: income consumer, high end consumer seemed to be spending pretty freely, 230 00:11:25,160 --> 00:11:27,000 Speaker 6: a little bit of concern about some of the lower 231 00:11:27,080 --> 00:11:29,200 Speaker 6: end consumer, but it does seem to be sort of 232 00:11:30,000 --> 00:11:32,600 Speaker 6: evening out. And so when they were looking forward to 233 00:11:32,600 --> 00:11:35,200 Speaker 6: the holiday season, which is you know, the most important 234 00:11:35,200 --> 00:11:38,800 Speaker 6: thing with regards to the retailers that I cover, they 235 00:11:38,840 --> 00:11:41,680 Speaker 6: seem cautiously optimistic that there will be a pretty good 236 00:11:41,679 --> 00:11:44,720 Speaker 6: holiday season this year. We do think that they're going 237 00:11:44,800 --> 00:11:47,480 Speaker 6: to people will prioritize spending on kids. That's usually what 238 00:11:47,559 --> 00:11:49,880 Speaker 6: happens first if they're holding back in other parts of 239 00:11:49,920 --> 00:11:53,760 Speaker 6: their budget. But all indicators right now seem that we're 240 00:11:53,880 --> 00:11:56,559 Speaker 6: headed towards a reasonably solid holiday season. 241 00:11:56,840 --> 00:12:00,240 Speaker 3: Are thanks to Jennifer Bartash's Bloomberg Intelligence senior analysts covering retail, 242 00:12:00,280 --> 00:12:02,839 Speaker 3: staples and packaged food. Coming up, we'll take a look 243 00:12:02,840 --> 00:12:06,160 Speaker 3: at why the global payments services provider Klarna reported record 244 00:12:06,160 --> 00:12:08,120 Speaker 3: revenue in its first quarter since going public. 245 00:12:08,200 --> 00:12:11,080 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 246 00:12:11,080 --> 00:12:13,240 Speaker 2: depth research and data on two thousand companies and one 247 00:12:13,320 --> 00:12:14,400 Speaker 2: hundred and thirty industries. 248 00:12:14,520 --> 00:12:17,559 Speaker 3: You can access Bloomberg Intelligence via Bigo on the terminal. 249 00:12:17,640 --> 00:12:18,800 Speaker 3: I'm Scarlet Foo and. 250 00:12:18,720 --> 00:12:20,760 Speaker 2: I'm Paul Sweeney, and this is Bloomberg. 251 00:12:24,840 --> 00:12:29,320 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 252 00:12:29,679 --> 00:12:31,000 Speaker 1: on Bloomberg Radio. 253 00:12:31,760 --> 00:12:33,640 Speaker 2: We move next to earnings from some of the world's 254 00:12:33,760 --> 00:12:35,319 Speaker 2: largest home improvement retailers. 255 00:12:35,360 --> 00:12:38,600 Speaker 3: This week, Low's reported third quarter profit that topped analyst estimates. 256 00:12:38,800 --> 00:12:41,000 Speaker 3: This was a result of online sales and demand from 257 00:12:41,000 --> 00:12:42,240 Speaker 3: professional contractors. 258 00:12:42,400 --> 00:12:44,800 Speaker 2: Separately, we heard from Home Depot, who cut its full 259 00:12:44,840 --> 00:12:46,880 Speaker 2: of your guidance. This come as a company warned that 260 00:12:46,960 --> 00:12:49,840 Speaker 2: some unsteady consumers are hitting the pause button on big 261 00:12:49,880 --> 00:12:50,840 Speaker 2: ticket home purchases. 262 00:12:50,920 --> 00:12:53,319 Speaker 3: So we spoke with Drew Redding Bloomberg Intelligence US home 263 00:12:53,320 --> 00:12:54,559 Speaker 3: building analyst. 264 00:12:54,320 --> 00:12:56,559 Speaker 2: We first Saske Drew to break down this week's results 265 00:12:56,559 --> 00:12:58,720 Speaker 2: from Low's and how they compare it to Home Depots. 266 00:12:58,960 --> 00:13:02,080 Speaker 7: So, I think Loew's result could be best characterized as 267 00:13:02,320 --> 00:13:05,880 Speaker 7: better than feared, particularly in light of what we heard 268 00:13:05,920 --> 00:13:08,959 Speaker 7: from Home Depot. They did fall short of consensus estimates 269 00:13:09,000 --> 00:13:11,920 Speaker 7: on same store sales, but I think the buy side 270 00:13:11,960 --> 00:13:14,920 Speaker 7: was probably looking for something flat to lower, so a 271 00:13:14,920 --> 00:13:18,200 Speaker 7: little bit better than they were looking for. Now that 272 00:13:18,280 --> 00:13:21,760 Speaker 7: being said, they did trim their four year outlook. Now 273 00:13:21,760 --> 00:13:23,760 Speaker 7: they're looking for four year comp sales to be flat 274 00:13:23,800 --> 00:13:26,040 Speaker 7: from flat to up one percent, So that would imply 275 00:13:26,160 --> 00:13:29,520 Speaker 7: that four Q is relatively flat. But you know, similar 276 00:13:29,520 --> 00:13:31,400 Speaker 7: to what we heard from Home Depot, they had about 277 00:13:31,400 --> 00:13:35,480 Speaker 7: one hundred basis point impact from hurricane activity that was 278 00:13:35,520 --> 00:13:38,040 Speaker 7: not replicated this year. So again, if you were to 279 00:13:38,080 --> 00:13:40,360 Speaker 7: back that out, it looks like the underlying trends in 280 00:13:40,400 --> 00:13:42,680 Speaker 7: the business are pretty stable. 281 00:13:43,240 --> 00:13:43,400 Speaker 5: You know. 282 00:13:43,480 --> 00:13:46,440 Speaker 7: That being said, they're still grappling with the same consumer 283 00:13:46,559 --> 00:13:49,480 Speaker 7: uncertainty and you know, the same weak housing market that 284 00:13:49,520 --> 00:13:52,520 Speaker 7: their competitors, so you know, still challenges out there in 285 00:13:52,559 --> 00:13:52,960 Speaker 7: the market. 286 00:13:53,520 --> 00:13:56,920 Speaker 2: Drew, I think I understand it. Correctly that Lows has 287 00:13:57,240 --> 00:14:00,280 Speaker 2: a lower percentage of sales to professional contractors than does 288 00:14:00,440 --> 00:14:03,440 Speaker 2: Home Depot If so, are they trying to narrow the gap? 289 00:14:03,440 --> 00:14:05,320 Speaker 2: Are they targeting that segment a little more? 290 00:14:05,559 --> 00:14:08,920 Speaker 7: Yeah, great question. So Low's is about thirty percent professional 291 00:14:08,960 --> 00:14:13,080 Speaker 7: contractors seventy percent DIY. Home Depot is about fifty to 292 00:14:13,080 --> 00:14:16,320 Speaker 7: fifty maybe even a little bit higher on the pro front. 293 00:14:16,360 --> 00:14:19,400 Speaker 7: What's interesting, and to your point on investment, is the 294 00:14:19,440 --> 00:14:23,640 Speaker 7: pro space, especially in building products distribution, has really become 295 00:14:24,360 --> 00:14:28,360 Speaker 7: a battleground among home improvement retailers. You had Home Depot 296 00:14:28,400 --> 00:14:33,000 Speaker 7: recently do acquisitions for srs and gms, and then you 297 00:14:33,080 --> 00:14:37,680 Speaker 7: have Lows who recently acquired foundation building materials, So it's 298 00:14:37,720 --> 00:14:40,880 Speaker 7: certainly an area where they're making a concerted effort to grow. Now. 299 00:14:41,080 --> 00:14:45,200 Speaker 7: Lows has historically focused on the small and medium sized 300 00:14:45,280 --> 00:14:48,400 Speaker 7: pro and what this acquisition does is it gives them 301 00:14:48,480 --> 00:14:52,960 Speaker 7: exposure to larger pros who do more complex projects, so 302 00:14:52,960 --> 00:14:57,160 Speaker 7: they're able to be the supplier of choice across more 303 00:14:57,200 --> 00:15:00,120 Speaker 7: building product categories and at a larger scale. 304 00:15:00,000 --> 00:15:02,720 Speaker 3: So basically directly competing with Home DEEPO in many ways. 305 00:15:03,560 --> 00:15:05,320 Speaker 3: Is this going to become a duopoly or are there's 306 00:15:05,320 --> 00:15:09,400 Speaker 3: still a lot of other places that professional contractors can 307 00:15:09,440 --> 00:15:09,720 Speaker 3: go to. 308 00:15:10,320 --> 00:15:14,240 Speaker 7: Yeah, so the building products distribution space is still very 309 00:15:14,440 --> 00:15:17,920 Speaker 7: highly fragmented, you know, I wouldn't be surprised to see 310 00:15:17,920 --> 00:15:21,760 Speaker 7: further consolidation within the industry, you know, across different categories. 311 00:15:22,320 --> 00:15:25,000 Speaker 7: Home Depot and Lows are certainly, you know, two of 312 00:15:25,040 --> 00:15:27,640 Speaker 7: the behemoths in the industry who have, you know, the 313 00:15:27,680 --> 00:15:31,920 Speaker 7: scale and financial flexibility to further consolidate the industry. But 314 00:15:31,920 --> 00:15:35,280 Speaker 7: there's some other players as well, like QXO. So it 315 00:15:35,360 --> 00:15:38,080 Speaker 7: is a mented industry, but I would expect, you know, 316 00:15:38,080 --> 00:15:41,240 Speaker 7: in the coming years, it's something that continues to get consolidated. 317 00:15:41,600 --> 00:15:43,320 Speaker 2: I can't keep track of where all the tariffs are 318 00:15:43,360 --> 00:15:45,200 Speaker 2: these days on all the different products, but I'm just 319 00:15:45,240 --> 00:15:48,160 Speaker 2: guessing if I'm a Low's or Home Depot, my plywood 320 00:15:48,320 --> 00:15:51,840 Speaker 2: from Canada that's probably being tariff A power tool from 321 00:15:51,880 --> 00:15:54,480 Speaker 2: somewhere in Asia that's probably subject to tariff's. How are 322 00:15:54,520 --> 00:15:57,360 Speaker 2: these companies dealing with it? What have they been telling 323 00:15:57,360 --> 00:15:57,720 Speaker 2: you guys? 324 00:15:58,160 --> 00:16:01,880 Speaker 7: So, Lows gets about sixty percent of its products from 325 00:16:01,920 --> 00:16:05,400 Speaker 7: the US, so their exposure internationally is maybe not as 326 00:16:05,440 --> 00:16:07,760 Speaker 7: high as you would expect. China's probably around fifteen to 327 00:16:07,800 --> 00:16:10,480 Speaker 7: twenty percent. You know, there hasn't been a whole lot 328 00:16:10,480 --> 00:16:13,160 Speaker 7: of talk. I think we have seen their average ticket 329 00:16:13,200 --> 00:16:15,560 Speaker 7: increase this quarter was up about three percent, and part 330 00:16:15,560 --> 00:16:19,440 Speaker 7: of that is in response to tariff related price increases. 331 00:16:19,600 --> 00:16:22,000 Speaker 7: Loose told us that they were only modest increases, and 332 00:16:22,240 --> 00:16:24,400 Speaker 7: you know, they'll take a portfolio approach to how they 333 00:16:24,480 --> 00:16:27,360 Speaker 7: increase prices. They'll look at their product line up and 334 00:16:27,400 --> 00:16:30,040 Speaker 7: see where they have more elasticity. But I think the 335 00:16:30,080 --> 00:16:32,640 Speaker 7: impact of costs will start to come in a little 336 00:16:32,680 --> 00:16:35,840 Speaker 7: greater as we look into Q four in early twenty 337 00:16:35,880 --> 00:16:37,360 Speaker 7: twenty six. And you know some of the areas that 338 00:16:37,400 --> 00:16:41,360 Speaker 7: we're looking at. You mentioned plywood so lumber tariffs from Canada. 339 00:16:41,800 --> 00:16:45,520 Speaker 7: We also had the implementation of tariffs on cabinetry both 340 00:16:45,520 --> 00:16:47,280 Speaker 7: the kitchen and bath, which to go up to fifty 341 00:16:47,320 --> 00:16:50,280 Speaker 7: percent in January. So I do think that the impact 342 00:16:50,320 --> 00:16:52,080 Speaker 7: gets a little greater as we look at the next year. 343 00:16:52,080 --> 00:16:55,960 Speaker 7: So I would expect further price increases from both retailers. 344 00:16:56,320 --> 00:16:59,720 Speaker 3: Are Thanks to Drew Reading Bloomberg Intelligence, US home building analyst. 345 00:16:59,440 --> 00:17:02,280 Speaker 2: We've moved to third quarter earnings from the global payment 346 00:17:02,320 --> 00:17:04,280 Speaker 2: services provider Klina this week. 347 00:17:04,240 --> 00:17:07,720 Speaker 3: Kliner reported record revenue that beat analysts estimates on Wall Street. 348 00:17:07,760 --> 00:17:10,560 Speaker 3: The firm also set aside more provisions for credit losses 349 00:17:10,680 --> 00:17:12,760 Speaker 3: in its first set of earnings since going public. 350 00:17:12,960 --> 00:17:15,520 Speaker 2: For more, I was joined by Anthony Hughes, Bloomberg Equity 351 00:17:15,520 --> 00:17:18,080 Speaker 2: Capital Markets reporter. I first asked Anthony to talk to 352 00:17:18,160 --> 00:17:20,320 Speaker 2: us about Cliner's most recent results. 353 00:17:20,560 --> 00:17:22,400 Speaker 8: Yeah, Well, klan is a company that's actually been around 354 00:17:22,440 --> 00:17:26,360 Speaker 8: for about two decades. It's just that since about twenty 355 00:17:26,440 --> 00:17:28,640 Speaker 8: and nineteen they've really expanded quickly in. 356 00:17:28,560 --> 00:17:29,880 Speaker 2: The US and by now. 357 00:17:29,920 --> 00:17:32,879 Speaker 8: Pay Later is a lending slash payments product which basically 358 00:17:32,920 --> 00:17:38,760 Speaker 8: allows people to buy products and obviously pay for them 359 00:17:38,760 --> 00:17:41,960 Speaker 8: over time. And this is an alternative to the credit 360 00:17:41,960 --> 00:17:45,440 Speaker 8: card in a credit card option. So really a lot 361 00:17:45,480 --> 00:17:48,200 Speaker 8: of Klana's growth really reflects the fact that this product's 362 00:17:48,200 --> 00:17:50,240 Speaker 8: becoming more popular relative to credit cards and for a 363 00:17:50,240 --> 00:17:52,080 Speaker 8: lot of consumers, it's a good way to manage your 364 00:17:52,080 --> 00:17:55,080 Speaker 8: cash flow and you know, obviously buy a product and 365 00:17:55,160 --> 00:17:56,879 Speaker 8: not have to pay for over time, and that suits 366 00:17:56,880 --> 00:17:58,399 Speaker 8: a lot of people, and it is a fast growing 367 00:17:58,880 --> 00:18:02,199 Speaker 8: part of the fintech or say consumer lending space. 368 00:18:02,800 --> 00:18:06,760 Speaker 2: And as a consumer, how does Clorina make money on 369 00:18:07,080 --> 00:18:10,520 Speaker 2: my one hundred dollars purchase that they put on their system. Yeah, 370 00:18:10,560 --> 00:18:12,640 Speaker 2: well they trudge me interest. 371 00:18:12,680 --> 00:18:15,280 Speaker 8: No, well, this number of different products that some of 372 00:18:15,359 --> 00:18:17,840 Speaker 8: the longer term lending products do have interests associated with them. 373 00:18:17,840 --> 00:18:21,199 Speaker 8: But that paying for product they talk about, which is 374 00:18:21,200 --> 00:18:23,800 Speaker 8: paying in four installments over a few months, that is 375 00:18:24,000 --> 00:18:26,800 Speaker 8: an interest free product. And really the source of revenue 376 00:18:26,800 --> 00:18:29,159 Speaker 8: in this in that instance is from the merchant, and 377 00:18:29,800 --> 00:18:32,560 Speaker 8: merchants pay merchant service fee. It's high for them, it's 378 00:18:32,920 --> 00:18:35,560 Speaker 8: higher than they pay on a credit card transaction. But 379 00:18:35,640 --> 00:18:39,440 Speaker 8: basically they see the benefit of Klana bringing in extra 380 00:18:39,480 --> 00:18:42,040 Speaker 8: customers so they can sell more product. And you know, 381 00:18:42,320 --> 00:18:44,600 Speaker 8: people will ask themselves, well, who actually pays the merchant 382 00:18:44,600 --> 00:18:47,200 Speaker 8: service fee? While the merchant does pay that to Klana, 383 00:18:47,280 --> 00:18:50,119 Speaker 8: but the merchant does incorporate that as a cost of 384 00:18:50,160 --> 00:18:52,320 Speaker 8: doing business into the products that these sells to you 385 00:18:52,400 --> 00:18:55,480 Speaker 8: and I. So we in the sense we all pay 386 00:18:55,560 --> 00:18:59,639 Speaker 8: for the fees that are hidden within the payment system 387 00:19:00,080 --> 00:19:03,399 Speaker 8: and really merchants passed on to the consumer depending on 388 00:19:03,440 --> 00:19:05,600 Speaker 8: how you pay the interesting you pay for. 389 00:19:05,560 --> 00:19:09,679 Speaker 2: Your who's a typical Klarner consumer out there? Like what 390 00:19:09,680 --> 00:19:12,359 Speaker 2: what's and what's kind of a typical transaction for a 391 00:19:12,400 --> 00:19:12,800 Speaker 2: buy nine. 392 00:19:12,840 --> 00:19:15,560 Speaker 8: Yeah, well, these are mainly small transactions of you know, 393 00:19:15,600 --> 00:19:17,880 Speaker 8: can be a few hundred dollars or you know, not 394 00:19:17,880 --> 00:19:21,240 Speaker 8: not not large transactions. And and you know, this obviously 395 00:19:21,800 --> 00:19:24,240 Speaker 8: suits a younger audience, and that's where a lot of 396 00:19:24,280 --> 00:19:26,600 Speaker 8: the you know, a lot of their customer bases come from. 397 00:19:26,680 --> 00:19:29,840 Speaker 8: But they've built a large business which globally has something 398 00:19:30,000 --> 00:19:33,199 Speaker 8: like one hundred and ten billion of what they call 399 00:19:33,240 --> 00:19:36,720 Speaker 8: gross merchandise volume, and that's you know, it's a fast 400 00:19:36,720 --> 00:19:39,040 Speaker 8: growing business in the US. It's been growing pretty fast 401 00:19:39,440 --> 00:19:43,120 Speaker 8: for them, forty fifty percent in this recent quarter. And 402 00:19:43,600 --> 00:19:45,159 Speaker 8: obviously there's a couple of other companies that are in 403 00:19:45,240 --> 00:19:47,080 Speaker 8: this area as well, so it's a competitive area as well, 404 00:19:47,080 --> 00:19:49,679 Speaker 8: with a firm which is another company went public perhaps 405 00:19:49,760 --> 00:19:51,000 Speaker 8: about five years ago. 406 00:19:51,280 --> 00:19:54,040 Speaker 3: That was Anthony Hughes, Bloomberg Equity Capital Markets Reporter. 407 00:19:54,400 --> 00:19:57,160 Speaker 2: We moved to some news in the biotech space this week. 408 00:19:57,200 --> 00:19:59,440 Speaker 3: We heard that the Danish drug maker Novo Nordesk will 409 00:19:59,440 --> 00:20:02,000 Speaker 3: be further lowering the prices of its obesity drugs for 410 00:20:02,080 --> 00:20:03,120 Speaker 3: cash paying patients. 411 00:20:03,440 --> 00:20:05,520 Speaker 2: It's in an effort to call back a larger share 412 00:20:05,520 --> 00:20:08,639 Speaker 2: of the US market from arch rival Eli Lilly. Nova 413 00:20:08,640 --> 00:20:11,760 Speaker 2: said introductory doses of its blockbuster drugs we Govi and 414 00:20:11,840 --> 00:20:14,560 Speaker 2: ozembic will be available for one hundred and ninety nine 415 00:20:14,600 --> 00:20:15,280 Speaker 2: dollars a month. 416 00:20:15,400 --> 00:20:17,560 Speaker 3: That price applies to the first two months of treatment. 417 00:20:17,680 --> 00:20:20,160 Speaker 3: After that, Nova will offer the drugs through its Novocare 418 00:20:20,240 --> 00:20:22,840 Speaker 3: direct to consumer portal for three hundred and forty nine 419 00:20:22,880 --> 00:20:25,199 Speaker 3: dollars a month, that is thirty percent less than the 420 00:20:25,240 --> 00:20:26,399 Speaker 3: current self pay price. 421 00:20:26,600 --> 00:20:29,120 Speaker 2: For more, we were joined by Michael Shaw, Bloomberg Intelligence 422 00:20:29,119 --> 00:20:32,320 Speaker 2: Senior pharma biotech analyst. Well first asked Michael to break 423 00:20:32,359 --> 00:20:35,000 Speaker 2: down what exactly Nova nord Disk is doing. 424 00:20:35,000 --> 00:20:36,840 Speaker 9: And this is obviously ahead of the White House tales. 425 00:20:36,880 --> 00:20:39,800 Speaker 9: So you're seeing starting dice is being reduced two hundred 426 00:20:39,800 --> 00:20:43,280 Speaker 9: dollars per month and then doses thereafter being charged at 427 00:20:43,280 --> 00:20:45,440 Speaker 9: an average of three hundred and fifty dollars per month 428 00:20:45,880 --> 00:20:49,520 Speaker 9: compared to five hundred dollars previously. So, I mean, you know, 429 00:20:49,560 --> 00:20:52,119 Speaker 9: those prices kind of align to, you know, the pricing 430 00:20:52,160 --> 00:20:56,399 Speaker 9: in the White House statement coming from Trump RX, but 431 00:20:56,480 --> 00:20:59,240 Speaker 9: compared to Lily, I mean they're under cutting them by 432 00:20:59,280 --> 00:21:02,639 Speaker 9: about you know, hundred dollars at each dose. And this 433 00:21:02,800 --> 00:21:06,200 Speaker 9: is basically a ployed to basically compete for new patient starts. 434 00:21:06,680 --> 00:21:09,480 Speaker 9: As we know, Lee's got the more effective product in 435 00:21:09,560 --> 00:21:13,040 Speaker 9: terms of weight loss profile, and they're also you know, 436 00:21:13,200 --> 00:21:15,760 Speaker 9: executing better on the launchers. And I think that's clear 437 00:21:15,760 --> 00:21:19,160 Speaker 9: from three Q results where we saw contrasting fortunes between 438 00:21:19,160 --> 00:21:20,640 Speaker 9: those two particular drug makers. 439 00:21:20,880 --> 00:21:23,080 Speaker 2: Mikey, give us a sense of this marketplace here, what 440 00:21:23,200 --> 00:21:27,520 Speaker 2: percentage of the addressable market is actually taking these obesity 441 00:21:28,400 --> 00:21:31,240 Speaker 2: drugs versus because it seems like as the price comes down, 442 00:21:31,320 --> 00:21:33,560 Speaker 2: more and more people will be able to get access 443 00:21:33,560 --> 00:21:34,040 Speaker 2: to them. 444 00:21:34,280 --> 00:21:37,119 Speaker 9: Yeah. Absolutely, I mean it's a highly priced sensitive market. 445 00:21:37,480 --> 00:21:39,840 Speaker 9: When we look at penetration rates in the US, you know, 446 00:21:39,920 --> 00:21:43,720 Speaker 9: low single digits, that's obviously going to accelerate as these 447 00:21:43,840 --> 00:21:48,840 Speaker 9: drugs become cheaper. Looking outside the US, penetration rates are 448 00:21:48,880 --> 00:21:51,879 Speaker 9: even lower, So there's you know, still significant kind of 449 00:21:52,080 --> 00:21:56,000 Speaker 9: you know patient runway out there in terms of US penetration. 450 00:21:56,160 --> 00:21:59,320 Speaker 9: I mean, the White House pricing deal on GLP one drugs, 451 00:21:59,760 --> 00:22:03,280 Speaker 9: you know, supports kind of use of these these GLP 452 00:22:03,400 --> 00:22:06,399 Speaker 9: one drugs in medicare you know there we think that 453 00:22:06,440 --> 00:22:09,760 Speaker 9: it can unlock you know, seven to eight million patients 454 00:22:10,040 --> 00:22:12,040 Speaker 9: according to a White House statement. I think they said 455 00:22:12,040 --> 00:22:16,040 Speaker 9: ten percent of Medicare beneficiaries would become eligible for GP 456 00:22:16,160 --> 00:22:19,480 Speaker 9: one drugs based on the pilot program, and that's going 457 00:22:19,520 --> 00:22:21,760 Speaker 9: to be introduced in twenty six, and I think it's 458 00:22:21,760 --> 00:22:24,480 Speaker 9: going to become mandatory in twenty seven. And then they've 459 00:22:24,480 --> 00:22:28,240 Speaker 9: also you know, loaded the price in Medicaid too. I 460 00:22:28,240 --> 00:22:30,760 Speaker 9: think the uplift in terms of patients there is a 461 00:22:30,760 --> 00:22:34,080 Speaker 9: bit harder to deduce or to kind of model, given 462 00:22:34,160 --> 00:22:36,000 Speaker 9: that you know, coverage is going to be on a 463 00:22:36,000 --> 00:22:38,399 Speaker 9: state by state basis, and there's also kind of different 464 00:22:38,480 --> 00:22:41,880 Speaker 9: qualifying criteria, which again is state dependent. 465 00:22:42,480 --> 00:22:45,440 Speaker 3: What does this mean, Michael? For the companies like Hymns 466 00:22:45,480 --> 00:22:49,040 Speaker 3: and Hers, the companies that make compounded copycat versions of 467 00:22:49,119 --> 00:22:52,320 Speaker 3: these anti obesity drugs, they've done very well. And I 468 00:22:52,359 --> 00:22:54,400 Speaker 3: know those stock for Hymns and Hers has been kind 469 00:22:54,400 --> 00:22:56,880 Speaker 3: of all over the place, but it is modestly higher 470 00:22:56,880 --> 00:22:58,160 Speaker 3: from where it was at the start of the year. 471 00:22:58,560 --> 00:23:00,480 Speaker 9: Yeah, I mean I think that whole well, you know, 472 00:23:00,560 --> 00:23:03,160 Speaker 9: the compounding situation. I believe that you know, one point 473 00:23:03,160 --> 00:23:06,359 Speaker 9: two million patients from compounding GLP one at the moment. 474 00:23:07,160 --> 00:23:09,480 Speaker 9: That's based on kind of comments and Novo made during 475 00:23:09,520 --> 00:23:13,120 Speaker 9: their three key results obviously loaning down the price. Would 476 00:23:13,200 --> 00:23:18,439 Speaker 9: kind of of the branded treatments would basically well, I 477 00:23:18,440 --> 00:23:20,840 Speaker 9: mean it would it would you know, lessen the delta 478 00:23:20,880 --> 00:23:24,800 Speaker 9: between you know, coffycats and branded treatment. So I guess 479 00:23:24,800 --> 00:23:28,080 Speaker 9: it's a negative for for for these you know, compounded 480 00:23:28,160 --> 00:23:29,280 Speaker 9: GLP one drug makers. 481 00:23:29,800 --> 00:23:30,080 Speaker 4: Mikey. 482 00:23:30,200 --> 00:23:31,960 Speaker 2: When I look at the big cap farm of names, 483 00:23:32,040 --> 00:23:35,000 Speaker 2: is it as simple as I want to own the 484 00:23:35,080 --> 00:23:38,440 Speaker 2: ones with exposure to obesity market and not own the 485 00:23:38,480 --> 00:23:40,920 Speaker 2: ones that don't. Because I'm looking at your your slate 486 00:23:40,920 --> 00:23:44,000 Speaker 2: of stocks and you either up thirty percent or you're down. 487 00:23:44,760 --> 00:23:46,760 Speaker 9: Yeah, I mean I think you know, there's a there's 488 00:23:46,800 --> 00:23:49,840 Speaker 9: a few large farmer names which which has entered the space. 489 00:23:50,520 --> 00:23:53,160 Speaker 9: You know, in the in the recent years you've seen 490 00:23:53,240 --> 00:23:56,840 Speaker 9: kind of deals with Ross and Zealand for an Amlin drug. 491 00:23:56,920 --> 00:23:59,560 Speaker 9: Most recently you've obviously got the fires and met Sarah 492 00:24:00,080 --> 00:24:03,000 Speaker 9: an a deal. I mean, I think obesity is obviously 493 00:24:03,000 --> 00:24:05,680 Speaker 9: appealing given you know the size of the target population, 494 00:24:06,280 --> 00:24:09,360 Speaker 9: how underpenetrated it currently is, and you know, if you're 495 00:24:09,400 --> 00:24:13,520 Speaker 9: looking to you know, offset patent expirations later in the decade, 496 00:24:14,480 --> 00:24:17,080 Speaker 9: you know there's an abundance of of kind of Jill 497 00:24:17,119 --> 00:24:20,200 Speaker 9: point on products out there as well as other assets too. 498 00:24:20,600 --> 00:24:22,400 Speaker 9: So I think that's the appeal of the space. It's 499 00:24:22,400 --> 00:24:25,920 Speaker 9: a large market, it's underpenetrated, and there's high demand for 500 00:24:25,960 --> 00:24:26,760 Speaker 9: these treatments too. 501 00:24:27,200 --> 00:24:28,720 Speaker 3: I mentioned M and A, And of course we know 502 00:24:28,800 --> 00:24:33,080 Speaker 3: that JANJ is making a purchase to increase its pipeline 503 00:24:33,080 --> 00:24:35,920 Speaker 3: to get away from relying on these older drugs that 504 00:24:35,920 --> 00:24:39,760 Speaker 3: have lost patent protection. Is every farmer company doing the 505 00:24:39,800 --> 00:24:42,760 Speaker 3: same thing. Is that you know they're not only strategy, 506 00:24:42,800 --> 00:24:44,959 Speaker 3: but is that the way they move forward? Is there 507 00:24:45,000 --> 00:24:47,080 Speaker 3: anyone who's kind of like in a good position and 508 00:24:47,240 --> 00:24:48,600 Speaker 3: doesn't need to make a deal. 509 00:24:49,119 --> 00:24:50,840 Speaker 9: I mean, I think that's always been part of the 510 00:24:50,920 --> 00:24:54,440 Speaker 9: large farmer model. They supplement kind of in house innovation 511 00:24:54,600 --> 00:24:57,080 Speaker 9: with extern of innovation, particularly if they want to get 512 00:24:57,080 --> 00:25:02,840 Speaker 9: into areas perhaps outside of their cool competency. But I mean, 513 00:25:02,880 --> 00:25:05,159 Speaker 9: I think that's just that the model in general. Biotechs 514 00:25:05,160 --> 00:25:08,480 Speaker 9: always been the pipeline for large farmer companies, or at 515 00:25:08,560 --> 00:25:11,160 Speaker 9: least help Bell cault that pipeline. 516 00:25:11,440 --> 00:25:14,600 Speaker 3: Our thanks to Michael shop Bloomberg Intelligence senior pharma biotech 517 00:25:14,640 --> 00:25:17,040 Speaker 3: analyst coming up a look at why the global sports 518 00:25:17,040 --> 00:25:19,400 Speaker 3: company a Maorsports raised it's full your guidance. 519 00:25:19,520 --> 00:25:22,359 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 520 00:25:22,400 --> 00:25:24,560 Speaker 2: depth research and data on two thousand companies and one 521 00:25:24,640 --> 00:25:25,640 Speaker 2: hundred and thirty industries. 522 00:25:25,680 --> 00:25:28,600 Speaker 3: You can access Bloomberg Intelligence through Bigo on the terminal. 523 00:25:28,640 --> 00:25:29,800 Speaker 3: I'm Scarlett Foe. 524 00:25:29,600 --> 00:25:31,600 Speaker 2: And I'm Paul Sweeney, and this is Bloomberg. 525 00:25:39,440 --> 00:25:43,960 Speaker 1: This is Bloomberg Intelligence with Scarlett Foo and Paul Sweeney 526 00:25:44,280 --> 00:25:45,600 Speaker 1: on Bloomberg Radio. 527 00:25:46,320 --> 00:25:49,400 Speaker 2: We move next to earnings from the department store TJX. 528 00:25:49,480 --> 00:25:51,920 Speaker 3: The off price retailer reported third quarter sales that beat 529 00:25:51,920 --> 00:25:55,080 Speaker 3: analyst estimates. It also raised its guidance for comparable sales 530 00:25:55,160 --> 00:25:55,640 Speaker 3: this year. 531 00:25:55,800 --> 00:25:58,000 Speaker 2: It's a sign that your shoppers are turning to cheaper 532 00:25:58,000 --> 00:26:01,040 Speaker 2: options as economy shows signs of d for more. We 533 00:26:01,040 --> 00:26:04,560 Speaker 2: were joined by Mary Ross, Gilbert, Bloomberg Intelligence Senior Equity Analyst. 534 00:26:04,640 --> 00:26:06,639 Speaker 3: We began by asking Mary for her take on this 535 00:26:06,640 --> 00:26:09,280 Speaker 3: week's results and whether she is a fan of TJX. 536 00:26:09,680 --> 00:26:12,119 Speaker 10: I'm a fan too, and they it's because they carry 537 00:26:12,200 --> 00:26:15,360 Speaker 10: such a variety of brands and it appeals to all 538 00:26:15,440 --> 00:26:19,520 Speaker 10: income groups. So if you have a luxury consumer, you 539 00:26:19,640 --> 00:26:24,040 Speaker 10: can get Balanciaga you can get Chloe low. So they 540 00:26:24,160 --> 00:26:26,960 Speaker 10: carry all of the brands. And then if you're more 541 00:26:27,000 --> 00:26:30,639 Speaker 10: oppressed and you're really a valued consumer, they have Steve Madden, 542 00:26:31,160 --> 00:26:35,400 Speaker 10: they have Theory, so they really they have Puma, they 543 00:26:35,400 --> 00:26:39,879 Speaker 10: have Nike, Adidas, so they have all the brands that 544 00:26:40,000 --> 00:26:44,359 Speaker 10: consumer want and that's why they're Marmax, which is tj 545 00:26:44,520 --> 00:26:48,040 Speaker 10: max and Marshall's division, reported a comp sales increase of 546 00:26:48,080 --> 00:26:51,160 Speaker 10: six percent, and that's why. You know, if you look 547 00:26:51,160 --> 00:26:53,399 Speaker 10: at the overall results, they were up five percent, so 548 00:26:53,440 --> 00:26:56,840 Speaker 10: a lot of strength there within the Marmas home goods 549 00:26:56,880 --> 00:27:01,640 Speaker 10: and of course Canada. Canada was up eight So we're 550 00:27:01,640 --> 00:27:06,120 Speaker 10: seeing consumers flock to get the brands that they want 551 00:27:06,440 --> 00:27:10,520 Speaker 10: and they've had some amazing buying opportunities, so their margins 552 00:27:10,520 --> 00:27:11,040 Speaker 10: were higher. 553 00:27:11,640 --> 00:27:15,760 Speaker 3: So the way that TJX stocks at stores is that 554 00:27:16,520 --> 00:27:19,880 Speaker 3: they get inventory that hasn't sold at full price stores. 555 00:27:19,920 --> 00:27:23,360 Speaker 3: But if all these merchants, all these retailers are managing 556 00:27:23,359 --> 00:27:26,200 Speaker 3: their inventories better and don't have a lot of excess inventory, 557 00:27:26,440 --> 00:27:29,320 Speaker 3: where does tj X get its inventory. I mean it 558 00:27:29,359 --> 00:27:31,439 Speaker 3: has to have another option, right. 559 00:27:32,359 --> 00:27:35,040 Speaker 10: Yeah, Scarlett, you raise a good question, But the fact 560 00:27:35,119 --> 00:27:38,159 Speaker 10: is is that some of the retailers, but also the 561 00:27:38,200 --> 00:27:42,240 Speaker 10: brands themselves. So if you think of for example, PVH, 562 00:27:42,280 --> 00:27:46,200 Speaker 10: which has the Tommy Hill Figure and Calvin Klein brands, 563 00:27:46,600 --> 00:27:49,560 Speaker 10: we see those brands pretty prevalent throughout off price. So 564 00:27:49,600 --> 00:27:53,040 Speaker 10: that's been a good channel for them to sort of 565 00:27:53,040 --> 00:27:55,560 Speaker 10: release some of that excess inventory, and when they work 566 00:27:55,640 --> 00:27:58,920 Speaker 10: with some of their wholesale partners, including the department stores, 567 00:27:59,400 --> 00:28:02,840 Speaker 10: So were you have product that's not selling off price 568 00:28:03,040 --> 00:28:07,040 Speaker 10: is just a natural fit to be able to release 569 00:28:07,119 --> 00:28:10,080 Speaker 10: that inventory. So you want to keep your inventory fresh 570 00:28:10,240 --> 00:28:12,960 Speaker 10: in the stores, especially when you're a full price operator, 571 00:28:13,520 --> 00:28:16,719 Speaker 10: and there hasn't been any slow down in terms of 572 00:28:16,760 --> 00:28:20,720 Speaker 10: that excess inventory. And that's why even on the luxury side, 573 00:28:20,760 --> 00:28:24,960 Speaker 10: where typically you wouldn't think you'd find markdowns, it's been 574 00:28:25,000 --> 00:28:29,280 Speaker 10: pretty prevalent, especially with overall weakness and luxury. 575 00:28:30,240 --> 00:28:32,919 Speaker 2: So what does the folks at Cheak, TJ Max, what 576 00:28:32,920 --> 00:28:34,840 Speaker 2: are they saying about the consumer these days? 577 00:28:36,320 --> 00:28:39,080 Speaker 10: Well, the consumer, I mean they're really seeing strength. So 578 00:28:39,240 --> 00:28:42,160 Speaker 10: it's interesting because when you sort of read the take 579 00:28:42,240 --> 00:28:44,760 Speaker 10: on Target with their results and they sort of cited 580 00:28:45,080 --> 00:28:48,520 Speaker 10: you know, the consumer is very cautious, but that caution 581 00:28:48,800 --> 00:28:51,560 Speaker 10: I think what's really going on is that they've got 582 00:28:51,560 --> 00:28:54,640 Speaker 10: the brands that consumers want. So those that are executing 583 00:28:55,240 --> 00:28:57,680 Speaker 10: are the ones that are getting the sales, because even 584 00:28:57,840 --> 00:29:02,040 Speaker 10: some retailers that are more full price oriented are generating 585 00:29:02,120 --> 00:29:05,600 Speaker 10: sales or they may be promotional, so the consumer is 586 00:29:05,680 --> 00:29:08,320 Speaker 10: flocking to value, There's no doubt about it. But we 587 00:29:08,400 --> 00:29:11,360 Speaker 10: do see some you know operators. You've got Ralph Lauren 588 00:29:11,400 --> 00:29:14,600 Speaker 10: on the luxury side. They continue to outperform and their 589 00:29:14,640 --> 00:29:19,640 Speaker 10: sales are always topping expectations too. And consumers there are 590 00:29:19,680 --> 00:29:22,440 Speaker 10: willing to pay full price, so there are a lot 591 00:29:22,520 --> 00:29:26,680 Speaker 10: less promotional every year. They seem to be less promotional 592 00:29:27,080 --> 00:29:29,600 Speaker 10: for that reason, they're able to sell at full price. 593 00:29:29,960 --> 00:29:33,440 Speaker 3: So clearly TJX has a strategy that works well given 594 00:29:33,480 --> 00:29:35,920 Speaker 3: the current environment, and even when the economy is doing well, 595 00:29:36,160 --> 00:29:38,080 Speaker 3: I would argue it has a strategy that works well. 596 00:29:38,440 --> 00:29:41,920 Speaker 3: At what point do investors want more from the company 597 00:29:41,920 --> 00:29:45,560 Speaker 3: than just executing on the strategy? Well, they want I 598 00:29:45,560 --> 00:29:48,120 Speaker 3: don't know, am an age or do they want consolidation? 599 00:29:48,240 --> 00:29:50,360 Speaker 3: Do they want innovation from TJX? 600 00:29:51,640 --> 00:29:54,880 Speaker 10: Yeah, Well, so that's the reason why TGX is focused, 601 00:29:55,120 --> 00:29:58,360 Speaker 10: you know, internationally, so they're going to be entering Spain 602 00:29:58,560 --> 00:30:01,640 Speaker 10: in twenty twenty six, so coming next year. And of 603 00:30:01,640 --> 00:30:06,160 Speaker 10: course they've had some They have two joint venture investments, 604 00:30:06,240 --> 00:30:09,000 Speaker 10: one in Mexico and then one in the Middle East, 605 00:30:09,000 --> 00:30:11,880 Speaker 10: and they're both off price retailers that they've invested in, 606 00:30:12,200 --> 00:30:16,080 Speaker 10: So they're basically taking their talent and providing them a 607 00:30:16,240 --> 00:30:19,720 Speaker 10: platform to leverage their talent in these joint ventures and 608 00:30:19,760 --> 00:30:22,800 Speaker 10: to grow that way. So they're always looking for ways. 609 00:30:22,840 --> 00:30:26,520 Speaker 10: Because Scarlett, you bring up a good point. TJX trades 610 00:30:26,520 --> 00:30:29,520 Speaker 10: at a pretty high premium in the off price space, 611 00:30:29,560 --> 00:30:32,840 Speaker 10: and generally it's a pretty big premium that is due 612 00:30:32,880 --> 00:30:37,840 Speaker 10: to their very consistent execution. But you're right, consumers keep wondering, well, 613 00:30:37,880 --> 00:30:40,960 Speaker 10: how can they keep growing on top of all this growth, 614 00:30:41,360 --> 00:30:44,640 Speaker 10: and yet they keep doing it. But as they talk about, look, 615 00:30:45,160 --> 00:30:48,000 Speaker 10: they have drops several times a week. There's not a 616 00:30:48,000 --> 00:30:51,320 Speaker 10: lot of retailers that offer fresh merchandise several times a week, 617 00:30:51,800 --> 00:30:55,440 Speaker 10: and they curate the merchandise by location, so they're very 618 00:30:55,480 --> 00:30:58,320 Speaker 10: cognizant of the demographics for each location. 619 00:30:59,000 --> 00:31:02,600 Speaker 2: Thanks to Mary Ross Gilt at Bloomberg Intelligence, senior ecody analysts. 620 00:31:02,400 --> 00:31:04,480 Speaker 3: We moved next to news from the Global sports company 621 00:31:04,480 --> 00:31:05,240 Speaker 3: a mere Sports. 622 00:31:05,480 --> 00:31:07,520 Speaker 2: This week, the company raised it's for your guidance for 623 00:31:07,600 --> 00:31:10,440 Speaker 2: the third time this year. That's after a strong demand 624 00:31:10,440 --> 00:31:13,640 Speaker 2: for its Solomon footwear drove quarterly sales to a record. 625 00:31:13,800 --> 00:31:16,280 Speaker 3: Sales growth at the group's other two units, including the 626 00:31:16,360 --> 00:31:19,120 Speaker 3: technical apparel segment and the ball and Racket sports unit, 627 00:31:19,200 --> 00:31:22,240 Speaker 3: also surpassed estimates, and overall group sales they hit a 628 00:31:22,280 --> 00:31:22,720 Speaker 3: new high. 629 00:31:22,840 --> 00:31:25,080 Speaker 2: For more, we were joined by Abigail gil Martin Bloomberg 630 00:31:25,120 --> 00:31:29,200 Speaker 2: Intelligence at leisure and footwear analysts on amer sports earnings, 631 00:31:29,320 --> 00:31:31,880 Speaker 2: the first to as Abigail to break down amer sports 632 00:31:32,080 --> 00:31:33,480 Speaker 2: most recent earnings report. 633 00:31:33,800 --> 00:31:36,840 Speaker 11: They did really well, you know, sales up thirty percent, 634 00:31:36,920 --> 00:31:41,120 Speaker 11: broad based strength across regions, across channels, and across brands. 635 00:31:41,200 --> 00:31:43,920 Speaker 11: I think the key thing people are looking for was China. 636 00:31:44,920 --> 00:31:49,760 Speaker 11: Arctics recently had some controversy in China with fireworks display 637 00:31:49,760 --> 00:31:53,680 Speaker 11: in the Himalayas that what fireworks display. 638 00:31:53,640 --> 00:31:55,120 Speaker 2: Displayed fireworks in the Himalayans. 639 00:31:55,720 --> 00:32:02,200 Speaker 11: Arctics for set off fireworks exactly. It was definitely a 640 00:32:02,240 --> 00:32:05,360 Speaker 11: misstep for an outdoor brand that's really focused on sustainability, 641 00:32:05,800 --> 00:32:07,800 Speaker 11: and there was definitely some concern that there would be 642 00:32:07,800 --> 00:32:10,560 Speaker 11: a little backlash in China. There's definitely a lot of 643 00:32:10,600 --> 00:32:13,480 Speaker 11: people upset about it, and they were fined by the 644 00:32:13,560 --> 00:32:17,200 Speaker 11: Chinese government and working to restore the ecology there. But 645 00:32:17,680 --> 00:32:20,960 Speaker 11: Greater China was up forty seven percent, momentum is continuing 646 00:32:20,960 --> 00:32:23,080 Speaker 11: into four Q so I think that was really a 647 00:32:23,080 --> 00:32:28,360 Speaker 11: big takeaway, just quelling investors' concerns about potential backlash in China, 648 00:32:28,520 --> 00:32:32,040 Speaker 11: especially because they're the number one outdoor sports brand in China. 649 00:32:32,200 --> 00:32:35,720 Speaker 3: Arctereric So, I had no idea that they have such 650 00:32:35,760 --> 00:32:37,960 Speaker 3: strong brands. I mean, a Mare Sports on its own 651 00:32:38,440 --> 00:32:40,960 Speaker 3: is kind of it doesn't it's not memorable the name, 652 00:32:41,080 --> 00:32:43,040 Speaker 3: the parent company name, right, but the brands of course 653 00:32:43,080 --> 00:32:46,520 Speaker 3: are Solomon, Arctic, so Wilson. As you mentioned, what does 654 00:32:46,640 --> 00:32:49,120 Speaker 3: the tariff picture look like for this company. 655 00:32:49,160 --> 00:32:51,360 Speaker 11: Yeah, I think it's very similar to most of the 656 00:32:51,360 --> 00:32:55,640 Speaker 11: other companies. I think for them, what benefits them as 657 00:32:55,680 --> 00:32:59,120 Speaker 11: their premium positioning. They're able to raise prices and they're 658 00:32:59,160 --> 00:33:02,960 Speaker 11: not seeing any from consumers or pullback. They're still seeing 659 00:33:03,080 --> 00:33:06,440 Speaker 11: very strong full price sell through, so they're able to 660 00:33:06,480 --> 00:33:09,240 Speaker 11: offset some of those tariff costs with that, which I 661 00:33:09,240 --> 00:33:11,000 Speaker 11: think is really helping. And we're seeing that with a 662 00:33:11,040 --> 00:33:13,400 Speaker 11: lot of more of the premium brands are able to 663 00:33:13,480 --> 00:33:16,320 Speaker 11: kind of navigate through the tariffs since their consumers are 664 00:33:16,320 --> 00:33:18,800 Speaker 11: willing to pay upper KU, upper. 665 00:33:18,640 --> 00:33:19,880 Speaker 3: K of the K shaped economy. 666 00:33:20,000 --> 00:33:22,280 Speaker 2: I guess I know that's I guess where you want 667 00:33:22,320 --> 00:33:25,200 Speaker 2: to be there. Talk to us about the footwear market here. 668 00:33:26,960 --> 00:33:29,280 Speaker 2: I think you know, Nike, Adidas, all that kind of stuff. 669 00:33:29,320 --> 00:33:30,120 Speaker 2: What's going on there? 670 00:33:30,320 --> 00:33:33,080 Speaker 11: Yeah, I think you know, we're in store for a 671 00:33:33,160 --> 00:33:36,560 Speaker 11: very interesting holiday season. I think that we're going to 672 00:33:36,600 --> 00:33:39,080 Speaker 11: continue to see the premium brands continue to do well 673 00:33:39,360 --> 00:33:42,840 Speaker 11: on holdings. Recently just reported and did phenomenal, and they 674 00:33:42,880 --> 00:33:46,280 Speaker 11: also said they're not seeing any backlash on raised prices 675 00:33:46,320 --> 00:33:49,160 Speaker 11: and they'll continue to do you know, limited discounting through 676 00:33:49,160 --> 00:33:52,520 Speaker 11: the holidays. So we may see some differences between the 677 00:33:52,600 --> 00:33:56,400 Speaker 11: two companies, but we just had our recent BI survey 678 00:33:56,560 --> 00:34:00,000 Speaker 11: and Nike continues to let I think there's been concerns overnight, 679 00:34:00,320 --> 00:34:03,400 Speaker 11: but they still are the major shareholder and still a 680 00:34:03,440 --> 00:34:06,480 Speaker 11: favorite brand of millennials. Gen Z's everyone for the holidays, 681 00:34:06,520 --> 00:34:08,000 Speaker 11: so they should continue to do well too. 682 00:34:08,400 --> 00:34:11,200 Speaker 3: What is the maorsports distribution strategy? Do they have a 683 00:34:11,280 --> 00:34:15,200 Speaker 3: DTC offering or are they going through third party retailers. 684 00:34:15,320 --> 00:34:17,280 Speaker 11: Yeah, that's a great question. So it's a little different 685 00:34:17,280 --> 00:34:21,200 Speaker 11: for each brand. For Arctics, they're leaning a lot more 686 00:34:21,200 --> 00:34:25,040 Speaker 11: into DTC. They've changed their distribution strategy from basically nine 687 00:34:25,160 --> 00:34:28,640 Speaker 11: eighty percent wholesale to eighty percent DTC over the last 688 00:34:28,680 --> 00:34:32,600 Speaker 11: three years, and they're really focusing on growing their store 689 00:34:32,640 --> 00:34:34,520 Speaker 11: base because I think not a lot of people know 690 00:34:34,520 --> 00:34:37,160 Speaker 11: about Arctics. It's really going to help the brand awareness. 691 00:34:37,200 --> 00:34:39,799 Speaker 11: So even in the US, they're looking to double their 692 00:34:39,800 --> 00:34:44,680 Speaker 11: store account by twenty thirty so that through Solomon continues 693 00:34:44,719 --> 00:34:48,400 Speaker 11: to be wholesale, especially for footwear, we're seeing this holiday 694 00:34:48,440 --> 00:34:51,200 Speaker 11: season consumers strap for cash. 695 00:34:51,280 --> 00:34:52,120 Speaker 5: They're wanting to. 696 00:34:52,080 --> 00:34:54,759 Speaker 11: Go into the stores and try on their shoes and 697 00:34:54,800 --> 00:34:56,839 Speaker 11: make sure it's the right fit and buy them versus 698 00:34:56,920 --> 00:34:59,719 Speaker 11: you know, buy five pairs and return them. Yeah, so 699 00:35:00,320 --> 00:35:02,759 Speaker 11: the wholesale distribution for Solomon and is really key, and 700 00:35:02,800 --> 00:35:06,200 Speaker 11: they're in a lot of key premium partners, I would say, 701 00:35:06,239 --> 00:35:09,040 Speaker 11: and you know the running specialty stores as well. 702 00:35:09,120 --> 00:35:11,520 Speaker 2: I mean, I'm looking at your report here research your 703 00:35:11,520 --> 00:35:14,239 Speaker 2: reportal on the sneaker business. I didn't know there were 704 00:35:14,280 --> 00:35:17,520 Speaker 2: so many shoe manufacturers. I mean, Nike's the dominant one, 705 00:35:17,520 --> 00:35:21,120 Speaker 2: as you said, but there's like fourteen in your survey here. Yeah, yeah, No, 706 00:35:21,239 --> 00:35:23,440 Speaker 2: that's a competitive marketplace. 707 00:35:23,680 --> 00:35:28,680 Speaker 11: Definitely, it's getting even more competitive as consumers with AI technology, 708 00:35:28,719 --> 00:35:32,000 Speaker 11: you know, there's just such more of a breath of discovery. 709 00:35:32,960 --> 00:35:35,560 Speaker 11: So that's where product is really coming into play this 710 00:35:35,640 --> 00:35:39,280 Speaker 11: holiday season. I think, you know, the innovation, product and style. 711 00:35:40,560 --> 00:35:42,719 Speaker 3: If there's one thing to be worried about when it 712 00:35:42,760 --> 00:35:44,640 Speaker 3: comes to amre sports, what would it be? I mean, 713 00:35:44,680 --> 00:35:47,440 Speaker 3: what's an area that they're not executing on? 714 00:35:48,640 --> 00:35:51,960 Speaker 11: So I think the China thing was the one uncertainty 715 00:35:52,080 --> 00:35:54,480 Speaker 11: for this quarter that we were Definitely it could have 716 00:35:54,520 --> 00:35:57,080 Speaker 11: gone either way, so that would be the biggest thing. 717 00:35:57,120 --> 00:36:00,160 Speaker 11: But honestly, they're executing on most of their things as 718 00:36:00,280 --> 00:36:04,279 Speaker 11: drivers are, DTC, Women's and China and all of those 719 00:36:04,320 --> 00:36:07,600 Speaker 11: were up double digits and more. And they're really gaining 720 00:36:07,680 --> 00:36:09,680 Speaker 11: share in women's which I think is a big new 721 00:36:09,719 --> 00:36:12,680 Speaker 11: opportunity for them as more women joined the outdoor market. 722 00:36:12,920 --> 00:36:16,000 Speaker 2: All right, which have you purchased in the last twelve months? 723 00:36:16,040 --> 00:36:20,400 Speaker 2: Sneaker brands for baby boomers? Sketchers? 724 00:36:20,480 --> 00:36:20,719 Speaker 7: Yeah? 725 00:36:20,800 --> 00:36:24,239 Speaker 2: What what Sketches continues to win? 726 00:36:24,320 --> 00:36:26,600 Speaker 5: It is Honestly, they're. 727 00:36:26,440 --> 00:36:30,400 Speaker 11: So comfortable, they're like the price point, the quality. I know, 728 00:36:30,640 --> 00:36:32,399 Speaker 11: I know, I know, I know, but. 729 00:36:33,040 --> 00:36:35,200 Speaker 3: This is not something that they market out there, that 730 00:36:35,239 --> 00:36:36,080 Speaker 3: they put out there. 731 00:36:36,239 --> 00:36:40,759 Speaker 11: No, and they're the third largest footwear brand globally. Really, yeah, 732 00:36:40,800 --> 00:36:42,040 Speaker 11: I think right behind Adidas. 733 00:36:42,200 --> 00:36:43,719 Speaker 3: Next, you're going to tell me that, you know, the 734 00:36:43,840 --> 00:36:46,279 Speaker 3: boomers are using the shoes with the little wheel in 735 00:36:46,320 --> 00:36:46,799 Speaker 3: the back of. 736 00:36:46,760 --> 00:36:48,680 Speaker 2: The No, the wheelers, the wheels. 737 00:36:48,719 --> 00:36:50,160 Speaker 5: Yeah, No, they're doing the step ins. 738 00:36:50,200 --> 00:36:52,759 Speaker 11: You don't even have to bend down exact it. 739 00:36:53,080 --> 00:36:54,960 Speaker 2: That's what I think it is. I think you're right, 740 00:36:55,000 --> 00:36:57,320 Speaker 2: all right, Yeah, there you go. I mean the kids, 741 00:36:57,400 --> 00:36:59,839 Speaker 2: the gen z, the millennials, they're still in that Nike. 742 00:36:59,840 --> 00:37:03,000 Speaker 2: You yet, brands still audience. 743 00:37:02,640 --> 00:37:06,400 Speaker 11: Or Hokahs, yeah, ka Hoka and on are gaining, but 744 00:37:06,600 --> 00:37:08,960 Speaker 11: they're you know, they're still small, and I think people 745 00:37:08,960 --> 00:37:11,080 Speaker 11: don't realize that just because there's been such a big boom, 746 00:37:11,280 --> 00:37:15,200 Speaker 11: they're still very like West Coast East Coast oriented, you know, 747 00:37:15,239 --> 00:37:16,919 Speaker 11: they still have a lot more room to grow brand 748 00:37:16,960 --> 00:37:19,799 Speaker 11: awareness in the US, especially in the middle of America. 749 00:37:20,200 --> 00:37:22,840 Speaker 3: That was Abigail Gilbart and Bloomberg Intelligence at Leisure and 750 00:37:22,880 --> 00:37:23,760 Speaker 3: Footwear Analysts. 751 00:37:24,040 --> 00:37:26,719 Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 752 00:37:26,800 --> 00:37:29,280 Speaker 2: providing in depth research and data on two thousand companies 753 00:37:29,280 --> 00:37:30,640 Speaker 2: and one hundred and thirty industries. 754 00:37:30,719 --> 00:37:33,319 Speaker 3: And remember you can access Bloomberg Intelligence via b I 755 00:37:33,440 --> 00:37:36,360 Speaker 3: go on the terminal. I'm Scarlett Foe and I'm Paul Sweeney. 756 00:37:36,440 --> 00:37:38,920 Speaker 2: Stay with us. Today's top stories and global business headlines 757 00:37:38,960 --> 00:37:41,400 Speaker 2: are coming up right now