WEBVTT - Macy's and American Eagle Drop; JetBlue Dips

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<v Speaker 1>Bloomberg Audio Studios. Podcasts. Radio. News. The Stock Movers Report.

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<v Speaker 1>Your roundup of companies making moves in the stock market.

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<v Speaker 1>Harnessing the power of Bloomberg data. Let's take a look

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<v Speaker 1>at some of the stocks on the move today. We

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<v Speaker 1>can do that with Alexis Christophers. Alexis, what are you

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<v Speaker 1>looking at?

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<v Speaker 2>I think we need a little retail therapy, guys. So

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<v Speaker 2>let's do it with Macy's. This stock is down about 5%

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<v Speaker 2>here in the pre-market. And this is despite the fact

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<v Speaker 2>that it raised guidance for a second time this year

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<v Speaker 2>after recording growth across its brand. So what was Wall

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<v Speaker 2>Street looking for? Some analysts are saying that the profit

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<v Speaker 2>guidance was not strong enough. Wall Street wanted even better.

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<v Speaker 2>But Macy's says that Bloomingdale's was a bright spot for

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<v Speaker 2>the company once again. Sales volume there hitting its highest

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<v Speaker 2>second quarter level level. in the brand's history. And does

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<v Speaker 2>this have something to do with your buying habits, Lisa?

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<v Speaker 2>I'm telling you. I don't know. Well, the Bloomies, I

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<v Speaker 2>was telling you before, Bloomies, yes, but Macy's, I haven't

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<v Speaker 2>sniffed it.

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<v Speaker 3>Is the Macy's store on 34th Street, is that still

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<v Speaker 3>the world's largest? department store?

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<v Speaker 2>I probably, and it's still a big deal come Christmas time.

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<v Speaker 1>It's awesome. True.

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<v Speaker 3>They got the parade.

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<v Speaker 1>Of course.

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<v Speaker 3>And still a big part in New York City.

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<v Speaker 2>And you know, don't forget Macy's owns Blue Mercury. I

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<v Speaker 2>feel like there's about one of those every four blocks

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<v Speaker 2>in the city. I don't know what it is. That's

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<v Speaker 2>like the perfume, the makeup, all the different things, right?

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<v Speaker 3>Right. Okay.

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<v Speaker 2>And so they did very well for them too last quarter.

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<v Speaker 2>But Macy's is down more than 2% year to date,

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<v Speaker 2>up 26% in the past year. So Kind of some

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<v Speaker 2>weird reaction from Wall Street there. The stock is down

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<v Speaker 2>that much given that report. But let's stick with retail

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<v Speaker 2>and move over to American Eagle. So that stock taken

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<v Speaker 2>a hit this morning. It is down more than 12%

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<v Speaker 2>and has been down 36% year to date. So it's

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<v Speaker 2>still trying to reignite its core brand. Merchandise margins shrank

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<v Speaker 2>in the second quarter, 3.3 percentage points. They said that

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<v Speaker 2>was due to promotional markdowns at American Eagle's namesake brand.

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<v Speaker 2>That offset improvement at Aerie. which is actually right across

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<v Speaker 2>the street here from our headquarters. Oh, I know because

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<v Speaker 2>of my daughter. She's like, oh mom, I need to

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<v Speaker 2>go to Aerie. So executives said the brand is still

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<v Speaker 2>trying to offload some of its older inventory at a discount.

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<v Speaker 3>Why?

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<v Speaker 2>Because fashion trends are changing. They need to keep up

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<v Speaker 2>with it. Apparently high-waisted jeans, the mom jeans, they're not in.

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<v Speaker 2>They need the low-waisted.

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<v Speaker 1>What are we at?

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<v Speaker 2>You need the baggy jeans, which don't really work for me.

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<v Speaker 3>All right.

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<v Speaker 2>Well, that's why you have to hold on to all

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<v Speaker 2>the jeans because they keep circling back. Yeah, yeah, yeah.

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<v Speaker 3>They really do. Pretty soon the skinny jeans.

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<v Speaker 2>Will be back. So if you have room in the closet,

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<v Speaker 2>hang on, because at some point they're going to come back.

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<v Speaker 2>But Aerie specializes in underwear and bras. They have become

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<v Speaker 2>especially important for American Eagle because the company's core business

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<v Speaker 2>has really been underperforming as of late.

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<v Speaker 1>Okay.

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<v Speaker 2>And now let's move over to JetBlue. That stock is

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<v Speaker 2>down more than 1% right now, down 3.7% year to date.

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<v Speaker 2>and down nearly 14% in the past year. So it

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<v Speaker 2>hasn't been an easy go for JetBlue. They cut their

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<v Speaker 2>third quarter capacity growth outlook today nearly in half. They

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<v Speaker 2>said this is because there were operational disruptions over the

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<v Speaker 2>summer due to weather conditions, air traffic control constraints, severe

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<v Speaker 2>airport weather delays across the national airspace system, they said,

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<v Speaker 2>rose more than 40 percent, geez, compared with the prior summer.

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<v Speaker 2>The company said its cancellations related to air traffic control

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<v Speaker 2>issues nearly doubled. Despite all these challenges, JetBlue says it

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<v Speaker 2>was still able to raise its guidance for revenue per

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<v Speaker 2>available seat mile. And that's an important metric for the airlines.

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<v Speaker 2>Because demand, they say, has remained strong. They say pricing

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<v Speaker 2>is constructive and management has executed certain commercial actions. I

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<v Speaker 2>don't know what that means to help with revenue. Well,

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<v Speaker 2>weren't they trying the lounges? They were trying to get

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<v Speaker 2>the lounge, didn't they?

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<v Speaker 3>Like JFK or one of them, they were trying to

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<v Speaker 3>get the JetBlue lounge and trying to attract a different customer.

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<v Speaker 1>I don't know.

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<v Speaker 3>This is a small company. I didn't know it was

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<v Speaker 3>so small. It's only $ 1. 6 billion market cap. I mean,

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<v Speaker 3>I'm shocked when the government didn't allow some of these

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<v Speaker 3>smaller carriers to merge.

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<v Speaker 2>To merge, yeah.

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<v Speaker 3>I mean, if you're not the big three, I don't

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<v Speaker 3>know how you make it trying to appeal to the

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<v Speaker 3>lower cost flyer because we've seen that across multiple industries,

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<v Speaker 3>whether it's retail, restaurants. A lot of these companies are

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<v Speaker 3>just saying, hey, if we're going to make it in

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<v Speaker 3>this economy, we have to appeal to the higher part

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<v Speaker 3>of the K-shaped economy.

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<v Speaker 2>It's funny, American Airlines just came out recently and said

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<v Speaker 2>business class is dead. But JetBlue is saying the opposite.

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<v Speaker 2>So I don't know if it's very airline specific, but

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<v Speaker 2>we know their bread and butter is the business traveler.

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