WEBVTT - Performance Foods Higher; Levi and Tariffs; Drone Stocks Higher

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, The.

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<v Speaker 2>Stock Movers podcast, your roundup of companies making moves in

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<v Speaker 2>the stock market. Harnessing the power of Bloomberg data.

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<v Speaker 3>Let's take a look at some stocks on the move today.

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<v Speaker 3>I'm Nathan Hager, joined by Bloomberg's Valery Titel on this

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<v Speaker 3>Friday morning. But apparently someone out there thinks it's Monday,

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<v Speaker 3>because we've got some deal news in the food distribution space,

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<v Speaker 3>potentially this morning.

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<v Speaker 2>Valcolm, morning, Good morning, Nathan.

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<v Speaker 1>You have some speculation of m and a activity in

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<v Speaker 1>the food distribution industry. Performance food has attracted takeover interests

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<v Speaker 1>from US Foods, and we're seeing a reaction in pre

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<v Speaker 1>market already Performance Foods up nearly nine percent, and US

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<v Speaker 1>Foods to the downside, down one point three percent. This

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<v Speaker 1>is a potential deal that would create a food distribution

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<v Speaker 1>company with combined sales of roughly one hundred billion dollars.

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<v Speaker 1>US food supplies restaurants, hospitals, school and hotels. Performance Foods

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<v Speaker 1>offers a similar service across the US and Canada. But

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<v Speaker 1>be wary that this deal could face some regulatory scrutiny, Nathan.

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<v Speaker 1>In fact, a similar takeover of US Food by Cisco

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<v Speaker 1>was blocked by a judge in twenty fifteen. There's no

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<v Speaker 1>certainty that deliberations will lead to a transaction. Sources Tel

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<v Speaker 1>Bloomberg and representatives for US Foods and Performance Food decline

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<v Speaker 1>to comment.

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<v Speaker 3>Okay, So along with the possible deal news, we've got

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<v Speaker 3>a smattering of earnings news as well before the official

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<v Speaker 3>kickoff of earning season next week. And Levi Strauss Wow.

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<v Speaker 1>Yeah, those shares rising sharply so far this morning, up

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<v Speaker 1>seven percent. They see revenue growth offsetting most of its

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<v Speaker 1>tariff impact. Nathan, It's very interesting that this tariff impact

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<v Speaker 1>many people are worried about. Levi is not worried at all.

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<v Speaker 1>It's revenue growth, it's sales growth. It's going to be

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<v Speaker 1>rising around one to two percent this year. It was

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<v Speaker 1>above estimates that actually sales would decline one to two percent.

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<v Speaker 1>They did lower their guide titance when it came to

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<v Speaker 1>gross margin, and the company factored in a thirty percent

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<v Speaker 1>tariff for products imported from China and a ten percent

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<v Speaker 1>tariff on goods from the rest of the world. So

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<v Speaker 1>those are the kind of numbers that they were using

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<v Speaker 1>in this analysis. The CEO, though, said that he is

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<v Speaker 1>happy with their supply chain and that their exposure to

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<v Speaker 1>China is minimal now. Levi also have had some success

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<v Speaker 1>with new products. They're dubbing this push head to toe

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<v Speaker 1>denim lifestyle. I don't know if you're a fan of that,

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<v Speaker 1>Nathan Kay, but it seemed to paying off for them.

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<v Speaker 1>They had a recent collab with Nike for denim Nike

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<v Speaker 1>Airmac sneakers.

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<v Speaker 3>They call that the Canadian Tuxedo I Digress. We got

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<v Speaker 3>to take a look at drone stocks as well, because

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<v Speaker 3>it looks like they're on the move. Off the back

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<v Speaker 3>of a Pentagon memo.

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<v Speaker 1>Yeah, jumping. We have a redcat up seventeen percent, arrow

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<v Speaker 1>environment of three percent, Kratos defense of three and a

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<v Speaker 1>half percent. This is all on the back of Defense

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<v Speaker 1>Secretary Pete Hegseth issuing orders to surge the production of drones.

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<v Speaker 1>This comes from a Fox News report who cited a

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<v Speaker 1>Pentagon memo that it aped it obtained. The orders allow

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<v Speaker 1>for commanders to test drones independently and also requires every

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<v Speaker 1>branch of the military to conduct combat simulations using drones.

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<v Speaker 1>This is all part of an aggressive push to outpace

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<v Speaker 1>Russia and China on unmanned warfare, and Hegseth is tearing

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<v Speaker 1>up red tape in this push. The memo also reclassifies

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<v Speaker 1>drones from aircraft to more resemble the classification of munitions

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<v Speaker 1>that will remove drones from legacy tracking systems and simplifies

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<v Speaker 1>their acquisition, So drone stocks up yet again. It seems

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<v Speaker 1>like this Pentagon push into unmanned aircraft is benefiting these stocks.

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<v Speaker 2>This morning the Stock Movers podcast from Bloomberg Radio. Check

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