WEBVTT - Renault's Rating, Puma Socks, WH Smith Probe

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

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<v Speaker 2>Stock Movers Report, 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 have a think about what individual stocks are moving.

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<v Speaker 3>So let us look at the individual names on the

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<v Speaker 3>move today here in Europe. I'm Caroline Hepga and I'm

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<v Speaker 3>joined by Bloomberg reporter Climberla. Good morning. The start of

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<v Speaker 3>our conversation will be Reno some good ratings guy and

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<v Speaker 3>who from.

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<v Speaker 1>Yeah SO has one beck its investment grade of status

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<v Speaker 1>from SMP SO. SMP has said that Reno had managed

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<v Speaker 1>to really refresh its product lineup and broaden its presence

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<v Speaker 1>outside of Europe, and so those two things should really

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<v Speaker 1>help with revenue growth and with volumes over the next

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<v Speaker 1>couple of years. And this is really your vote of

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<v Speaker 1>confidence for the new CEO started just over the summer.

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<v Speaker 1>He's been very careful with costs, so that's been a

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<v Speaker 1>big part of his strategy. And he also said that

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<v Speaker 1>he really wanted to expand in markets like Latin America

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<v Speaker 1>and India rather than a China in the US because

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<v Speaker 1>of that quite weak demand in Europe. And so this

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<v Speaker 1>strategy seems to be paying off, and this rating upgrade

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<v Speaker 1>this morning really boosted the shares for Reno, and this

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<v Speaker 1>is much needed relief for a company that's not been

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<v Speaker 1>having the best year. Of course, alongside the rest of that,

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<v Speaker 1>carmaking a sector in Europe that's obviously been struggling quite

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<v Speaker 1>a bit, but this seems to be a company that's

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<v Speaker 1>on the road to recovery.

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<v Speaker 2>Perhaps.

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<v Speaker 3>Okay, let's think about European sportswear and Puma in particular.

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<v Speaker 1>Yeah, so what's happening with Nike over in the US

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<v Speaker 1>is not good news for Puma essentially. So Nike has

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<v Speaker 1>worn that sales would be much weaker for this quarter,

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<v Speaker 1>the war quarter that is starting that started on December

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<v Speaker 1>the first, and that is because of lower demand for

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<v Speaker 1>its Converse brand and also weak sales in China. So

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<v Speaker 1>this doesn't bode very well for Puma because they also

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<v Speaker 1>have a huge market in China, and this seems like

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<v Speaker 1>there's no recovery yet in consumer sentiment in that country,

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<v Speaker 1>with a customers continuing to kind of cut back on

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<v Speaker 1>that discretionary spending, and Nike is more exposed to that

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<v Speaker 1>than brands like Adidas and a Sports for example, a

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<v Speaker 1>local Chinese brand, because Nike has failed to really deliver

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<v Speaker 1>a big, kind of standout model, and Chinese consumers also

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<v Speaker 1>increasingly want kind of very niche performance features that Nike

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<v Speaker 1>has not been able to deliver. And this is also

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<v Speaker 1>a problem for Puma because it's also a company that's

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<v Speaker 1>struggled to launch a product that really captures consumers attention,

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<v Speaker 1>and so that's probably going to be a big problem

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<v Speaker 1>moving forward for Puma as well, and we have seen

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<v Speaker 1>those shares are struggling this morning on the back of.

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<v Speaker 3>That interesting I was just reading GQ's article and look

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<v Speaker 3>at trainers for twenty twenty six. I need a pair

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<v Speaker 3>of trainers. So it happened to look at what the

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<v Speaker 3>trends are going to be and apparently I'm told weirder, chunky,

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<v Speaker 3>ballet trainers, all sorts of things. Yeah, anyway, it's happening, yeah,

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<v Speaker 3>under training department.

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<v Speaker 1>Right.

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<v Speaker 3>Let's also think about this FCA probe of a well

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<v Speaker 3>known company in the UK.

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<v Speaker 1>Yeah, so wh Smith is facing a probe. W Smith

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<v Speaker 1>is having a real tough time at the moment. So

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<v Speaker 1>we remember, of course, the accounting era from a few

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<v Speaker 1>months back, where it revealed that it had overstated its

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<v Speaker 1>result in the North American and North American business, so

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<v Speaker 1>it had overstated it by thirty million pounds. And since

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<v Speaker 1>then that has triggered a bunch of setbacks for the company.

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<v Speaker 1>We've seen shares plunging, We've they've had to delay their

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<v Speaker 1>results twice, they've had to cut their outlook twice as well.

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<v Speaker 1>The CEO resigned and today there's obviously yet another setback

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<v Speaker 1>with the financial regulator in the UK, the FCA, opening

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<v Speaker 1>an investigation into the company, and the FCA can take

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<v Speaker 1>enforcement actions when the companies have misleading public announcements, and

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<v Speaker 1>so it had fined Tesco, for example, about one hundred

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<v Speaker 1>and thirty million pounds back in twenty seventeen for overstating results.

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<v Speaker 1>So we'll see what the investigation actually actually triggers for

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<v Speaker 1>wh Smith. So it has this probe, and then it

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<v Speaker 1>also has cut its annual dividend for the first time

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<v Speaker 1>since the pandemics. We've got two big setbacks for the

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<v Speaker 1>company this morning. That's not going to help the shares

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<v Speaker 1>which are down about more than forty percent a year today,

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<v Speaker 1>and that of course doesn't really help with credibility and

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<v Speaker 1>makes it difficult for wh Smith to move forward, at

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<v Speaker 1>least for now.

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<v Speaker 2>The Stock Movers Report from Bloomberg Radio. Check back with

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