Speaker 1: This is Bloomberg Business Week. I'm Carrol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
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Speaker 1: Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on the Bloomberg Radio or watch us
Speaker 1: on YouTube. Searched Bloomberg Global News A couple of things
Speaker 1: going on. Wearing a face mask more than have the
Speaker 1: risk of getting COVID. That's according to a review of
Speaker 1: eight studies published in the British Medical Journey. And then, Tim,
Speaker 1: you've got a more infectious new version of COVID nineteens
Speaker 1: Delta variant spreading fast in the UK. It does seem
Speaker 1: less likely though, to cause symptomatic illness. But there you
Speaker 1: have it. Yeah, we've heard this story before, right right,
Speaker 1: new variant. The most recent one that caused issues here
Speaker 1: and around the world was the Delta variant. It has
Speaker 1: been the delta variant, but epidemiologist and experts have been
Speaker 1: saying that this thing continues to mutate exactly. All right,
Speaker 1: let's get our daily check on the pandemic and the vaccine.
Speaker 1: Joining us right now is Tara Kirksel, Senior Scholar for
Speaker 1: the Center for Health Security and Assistant professor in the
Speaker 1: Department of Environmental Health and Engineering over at Johns Hopkins
Speaker 1: University Bloomberg School of Public Health, supported by Michael R. Bloomberg, founder,
Speaker 1: Bloomberg GILP, and Bloomberg Philanthropist. She, by the way, an
Speaker 1: Olympic medal winning athlete, which I just think is really cool.
Speaker 1: She's on the phone from Bremerton, Washington. Tara, so great
Speaker 1: to have you here. Uh, lots of information on a
Speaker 1: daily basis, We rely on folks like you and other
Speaker 1: members of the medical community to really pull fact from fiction,
Speaker 1: if you will. Misinformation about all of it is so key. Yeah. Well,
Speaker 1: you know, the real problem here is that miss misinformation
Speaker 1: really reduces trust, and so you know, when we're communicating
Speaker 1: about what you need to do to protect you and
Speaker 1: your family, it's really hard because we have this in
Speaker 1: pandemic where we just have so much information, and some
Speaker 1: of it's true and some of it's not, and it's
Speaker 1: just blasting people, and people just don't know what to believe.
Speaker 1: So it's really tricky. And the problem here is now
Speaker 1: people have sort of lost trust and there's an uptil
Speaker 1: babble here on you know, getting people to do the
Speaker 1: things you need to do to end the pandemic. Well,
Speaker 1: somebody who studies this stuff closely, misinformation in particular, I'm
Speaker 1: wondering what your research has told us and told you
Speaker 1: about where this comes from. What is the number one
Speaker 1: source of this misinformation? Well, I mean there are different sources, right,
Speaker 1: that can be different, you know, different political, different social,
Speaker 1: different monetary motivation, and it's coming from all over the place.
Speaker 1: But you know, I think that the important thing here
Speaker 1: is to know that it's not just words, right, it
Speaker 1: causes real harm. Um. And so like if we did it,
Speaker 1: actually we did an economic analysis, um that you know,
Speaker 1: show that Look, can we just look at non vaccination
Speaker 1: and we make a really conservative estimate. You know, it's
Speaker 1: just fivet of non vaccination is attributable to misinformation, the
Speaker 1: cut between fifty and million dollars of harm every day,
Speaker 1: which is just an incredible amount of harm and it's
Speaker 1: hard to sort of imagine, oh, these words are really
Speaker 1: actually translating into you know, these problems in real life.
Speaker 1: So what is the best way to combat this? Because
Speaker 1: you know, I hear you talking about this, and this
Speaker 1: is something we've been talking about for more than a
Speaker 1: year at this point, and I think to myself, well,
Speaker 1: you know what that ship is sailed? Yeah, well, you know,
Speaker 1: this is not an easy solution, and I think that
Speaker 1: that's something that we're still trying to figure out the
Speaker 1: best ways to go about solving this. I think, you know,
Speaker 1: we can have these big, big communication campaigns, but that
Speaker 1: doesn't really solve the problem. Right. The problem is is
Speaker 1: in um, you know, how we deal with each other
Speaker 1: on an in a personal basis, how we use social
Speaker 1: media UM, and how we you know, value what's true
Speaker 1: and what's not true UM. And so I think it's
Speaker 1: going to come down to when we're talking about, you know,
Speaker 1: dealing with misinformation about the vaccine, that's coming down to
Speaker 1: trusted sources. We can't you know, depend on PDC to
Speaker 1: blast out any more information because those people aren't listening anymore.
Speaker 1: So it needs to be more on these community level
Speaker 1: interventions that are that need to go on, um Tara,
Speaker 1: we have so many conversations about the inequities that are
Speaker 1: out there when it comes to healthcare, how it's affected
Speaker 1: different people during the pandemic, What signs, what hope do
Speaker 1: you have that as we get on the other side
Speaker 1: of this that some of those inequities are truly dealt with,
Speaker 1: that we stopped talking about it and actually do something
Speaker 1: and fix it and make it better for more, uh,
Speaker 1: not only Americans, but global citizens. Well, I think the
Speaker 1: pandemic has really highlighted that this is you know, these
Speaker 1: global inequities of affect everyone UM, and that you know,
Speaker 1: when we are dealing with big problems like the pandemic
Speaker 1: or other health issues that sort of you know, continue
Speaker 1: continue every day that you know, these these equities, UM,
Speaker 1: you know are really really part of the biggest part
Speaker 1: of the problem. UM. Now, are they solved? Definitely not.
Speaker 1: You know, weason to come out of the pandemic and
Speaker 1: say we've solved, you know, the problem with health and equities. Know,
Speaker 1: but I think that you know, we have shined a
Speaker 1: light on it, and I think that this is something
Speaker 1: that is gaining more and more attention UM as something
Speaker 1: that needs to be addressed when we deal with for parents,
Speaker 1: for pandemics. You know, you can't just just think about
Speaker 1: how well just one broad solution. You need to think
Speaker 1: about all these subpopulations that really do need this attention.
Speaker 1: What holds it up from us making more significant progress?
Speaker 1: I mean, we think about some of those big global issues,
Speaker 1: whether it's climate change, inequities, certainly healthcare. I know it's
Speaker 1: a big nut to fix. But what is it that
Speaker 1: holds us up the most? Is it policy? Is it
Speaker 1: politicians caring? Is it that the people that are affected
Speaker 1: that most don't have much say in government? What is it?
Speaker 1: I mean, I think it's all of those things. Um,
Speaker 1: But you know, at the end of the day, I
Speaker 1: think you know, I study misinformation play. Do you think
Speaker 1: a lot of stuff which is related to misinformation? People don't.
Speaker 1: People don't see it as an important problem because you know,
Speaker 1: that's some other information they're seeing. It's just not a priority.
Speaker 1: It's not a priority for people that it's not a
Speaker 1: priority for politicians. But I do think, you know, when
Speaker 1: we talk about misinformation, when we talk about these pandemics,
Speaker 1: you know, this is something that needs like a whole
Speaker 1: of society approach. We need to have, you know, a
Speaker 1: national strategy to deal with health related misinformation in and
Speaker 1: for that matter, you know, we do have these strategies
Speaker 1: for pandemics. We need to sort of understand that we
Speaker 1: just can't make a plan that we actually have to
Speaker 1: invest it. All right, we gotta run. Hey, thank you
Speaker 1: so much. I know it's Thursday, but still have a
Speaker 1: good weekend. We call it Friday's Eve here, so uh, Tara,
Speaker 1: take care. Tara Kirksl she's senior scholar for the Center
Speaker 1: are at the Center for Health Security. She's an assistant
Speaker 1: professor in the Department of Environmental Health and Engineering overt
Speaker 1: Johns Hopkins University, Bloomberg School of Public Health. Of course,
Speaker 1: as we say, because it's true, it's a part of
Speaker 1: by Michael R. Bloomberg, founder, Bloomberg LP and Bloomberg Philanthropies.
Speaker 1: We didn't talk about her Olympic silver medal, No we didn't.
Speaker 1: It isn't that cool, Very just in awe of anyone
Speaker 1: who's achieved that. Also just career switch such as this, Yeah, incredible,
Speaker 1: doing some incredible work as well. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick takes Tim Stinovic
Speaker 1: on Bloomberg Radio. Well, we talk about this a lot
Speaker 1: when it comes to trying to understand today's labor market. Really,
Speaker 1: the impact of the COVID pan make writing about it
Speaker 1: in a Bloomberg opinion column about how the Great Resignation
Speaker 1: is great for low paid workers is known other than
Speaker 1: justin Fox. He's calmnest to Bloomberg Opinion. He joins us
Speaker 1: here in our interactive brokers studio, nice to have you here.
Speaker 1: We're chatting a little bit before we got going. We
Speaker 1: talked about this a lot. Tell us what your intel
Speaker 1: has said are shown about what really is going on
Speaker 1: when it comes to the Great Resignation. Well, I mean,
Speaker 1: everybody's been talking about it for months, and at least
Speaker 1: in my inbox, it's mostly all these consulting firms and
Speaker 1: pr people wanting to talk about white collar workers being
Speaker 1: dissatisfied with their jobs or otherwise wanting to reboot their
Speaker 1: lives and work life traitors on while studio can't date
Speaker 1: and they switch for another job exactly, And a lot
Speaker 1: of that's totally real and for love Carol, exactly. But
Speaker 1: there's this monthly report that the Bureau of Labor Statistics
Speaker 1: put out and the one for September came out um
Speaker 1: last week and where and where they measure the quits rate,
Speaker 1: which is just the percentage of jobs that people left
Speaker 1: voluntarily in that month, and it was the quits rate
Speaker 1: was three September. That's the highest it's ever been since
Speaker 1: they started measuring it in two thousands, and it's jumped
Speaker 1: a ton over the past um six months or so.
Speaker 1: And if you look at it by industry, it turns
Speaker 1: out it's not the financial industry. It's not information, which
Speaker 1: is where a lot of the tech companies are and
Speaker 1: where Bloomberg is too. It's leisure and hospitality. It's um
Speaker 1: non durable goods manufacturing, which doesn't pay as well as
Speaker 1: durable goods. It's um healthcare, but you know you've got
Speaker 1: most healthcare jobs are not highly paid doctors or nurses. Uh.
Speaker 1: And so what it seems to be, at least lately
Speaker 1: and again over the course of the pandemic, different things
Speaker 1: have been happening. But the phenomenon of right now is
Speaker 1: low paid people are quitting to take slightly higher paying jobs.
Speaker 1: And that's how because hires are up even more highers
Speaker 1: are higher than quits. Are, and that's just happening all
Speaker 1: across the board, and it's kind of I mean, I'm
Speaker 1: sure it's very frustrating for the employers who are losing
Speaker 1: some of those people, but it's kind of a very
Speaker 1: healthy phenomenon that was not happening for most of the
Speaker 1: two thousand tents. It was starting to happen a bit
Speaker 1: in two thousand and seventeen. Age I'm glad you say
Speaker 1: it was kind of a healthy phenomenon because I think
Speaker 1: about the way that prices have not been raised in
Speaker 1: many parts of our lives over the last decade, and
Speaker 1: I wonder to what extent this type of pattern is
Speaker 1: supposed to happen, where workers are supposed to have this
Speaker 1: type of choice that if they do actually find a
Speaker 1: job that pays more, they can go to that and
Speaker 1: those jobs are available when they haven't been in the past.
Speaker 1: I mean, one the the Atlanta fed um breaks down
Speaker 1: wage gains by income quartile, and basically the bottom quartile
Speaker 1: people who make the least money are seeing the biggest
Speaker 1: gains right now, and the last time that happened in
Speaker 1: an extended and then and they've been seeing the biggest
Speaker 1: gains since about two thousand, fifteen, but they keep going higher.
Speaker 1: And the last time that happened in a significant way
Speaker 1: it was the late nineties, which was a pretty great
Speaker 1: time economically speaking. And so that's a good thing. That's like,
Speaker 1: that's decreasing. Wage inequality has totally been decreasing over the
Speaker 1: past few years. I don't know if overall economic inequality
Speaker 1: has because obviously a lot of people are getting rich
Speaker 1: off things other than wages, but wage inequality has been decreasing.
Speaker 1: Opportunities for people who don't have college educations have been
Speaker 1: improving for the last few years. It's good stuff in
Speaker 1: a lot of ways. So net net to take away
Speaker 1: do be does this work towards reducing the gap that
Speaker 1: we're seeing between the halves and have nots essentially? Um
Speaker 1: and longer term, does it mean wage inflation? Maybe it
Speaker 1: isn't sticky because sometimes those jobs have a lot of
Speaker 1: turnover and just kind about thirty five seconds, I mean,
Speaker 1: who Yeah, it seems like wage wage inflation might be
Speaker 1: a little stickier, though I would imagine COVID is still
Speaker 1: holding some people back from the labor market. Um. And yeah,
Speaker 1: this closes the gap, it doesn't close at all, And
Speaker 1: it's not the only thing that needs to be done,
Speaker 1: but yeah, it decreases inequality well, and it equips us
Speaker 1: with a smart a smarter round of conversation because we
Speaker 1: are talking about just people rethinking right, they're rolling in
Speaker 1: the workforce. Also, after reading a column, makes me wonder
Speaker 1: too about price increases that we'll see at some of
Speaker 1: these places that haven't been raising wages that realized they
Speaker 1: do because they're going to need more money to pay
Speaker 1: their workers. All Right, we gotta run. Justin, thank you
Speaker 1: so much. Justin Fox. He's calumnist of Bloomberg Opinion. Check
Speaker 1: him out at Twitter at Fox just and he's joining
Speaker 1: us in our Interactive Broker Studio. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Well, the news show, Bloomberg business
Speaker 1: Week Magazine. It is out. It's on the Bloomberg at
Speaker 1: business Week dot com, also on newsstand and the cover
Speaker 1: It's all about inflation. Yep, it's back. Several articles covering
Speaker 1: what is one of the most talked about subjects this year,
Speaker 1: including a story by Bloomberg News Cross Asset Reporter on
Speaker 1: Bloomberg Quick Take host Katie Greifeld, which is about getting
Speaker 1: inflation right. Is a make or break trade on Wall Street.
Speaker 1: The folks on Wall Street have had a hard time
Speaker 1: figuring this one out. Joining us now is Joe Webber,
Speaker 1: editor at bloom Burg Business Week. He joins us on
Speaker 1: the access line from Brooklyn. Katie Graandfeld is in the
Speaker 1: studio with us. She's Bloomberg News cross asset reporter. She's
Speaker 1: also the co host of Bloomberg Quick Take stock at
Speaker 1: as each and every day at noon Wall Street time. Joel,
Speaker 1: I want to start with you and just talk a
Speaker 1: little bit about the entire package here because this is
Speaker 1: this is a special issue of Bloomberg Business Week that
Speaker 1: really focuses on inflation. And I think for a lot
Speaker 1: of people, uh, they might think back to the question
Speaker 1: of wait a second, wasn't inflation dead just a few
Speaker 1: years ago? Were we out of the era? In fact,
Speaker 1: we even had a cover story that was is Inflation dead?
Speaker 1: Which was uh, you know, in the before times and
Speaker 1: boys at not now. Um, but you know, this has
Speaker 1: been an obsession on in finance and on Wall Street
Speaker 1: for for years. You know, this idea that inflation which
Speaker 1: basically just disappeared, like what was going to bring it back?
Speaker 1: And then all of a sudden, Um, it's back and
Speaker 1: in back in a big way. UM. So we tried
Speaker 1: to look at that um for as many different angles
Speaker 1: as we could. There's historical elements, there's the political ramifications
Speaker 1: and what it means for for President Biden who really
Speaker 1: doesn't have that many options to even attempt to deal
Speaker 1: with it. Um. And then where where Katie fits in
Speaker 1: with technically the cover story, which is a joke between
Speaker 1: her and me, uh is that careers are going to
Speaker 1: be made or or or or broken over this thing, um,
Speaker 1: especially on Wall Street in terms of of who who
Speaker 1: doing what, what their calls are, what their trades are. UM.
Speaker 1: So Katie, what's that? What's that inkst feel like on
Speaker 1: the street? Well, Joel, technical cover story, I will take it.
Speaker 1: I do remember the Inflation is Dead cover as well.
Speaker 1: I think there was a deflated dinosaur on it had
Speaker 1: an article in that one with a question mark to
Speaker 1: be it was a question mark, not a state. There
Speaker 1: is a dinosaur that was out of inflatable dinosaur that
Speaker 1: was out of air at the bottom of the question
Speaker 1: there it is. I remember that we're showing it to
Speaker 1: everybody who's watching right now on YouTube. Great cover man,
Speaker 1: What a time this article. I think, um, there's sort
Speaker 1: of an optimistic or silver lining here, because I mean,
Speaker 1: we're looking at it from the psychology of money managers,
Speaker 1: this inflation question. I feel like we come at it
Speaker 1: from the economic angle a lot trying to answer the
Speaker 1: question of whether inflation is transitory. But if you're a
Speaker 1: money manager, this is the question you have to answer
Speaker 1: in designing a portfolio. And if you're wrong, I mean,
Speaker 1: for sure that can destroy your returns. But if you're right,
Speaker 1: I mean, you can really be a hero here, you
Speaker 1: can really make a name for yourself. So there there's
Speaker 1: a little bit of an optimistic bent there, Katie. Though
Speaker 1: here we are you and I anchor this show on
Speaker 1: on quick Take that's geared towards retail traders. A lot
Speaker 1: of our audience doesn't hasn't ever lived through an inflationary environment.
Speaker 1: And I wonder what your sources told you about the
Speaker 1: idea of us entering a time when you know, we
Speaker 1: were I think in the words of Matt Miller, this
Speaker 1: was like pre nirvana, is what he said earlier today.
Speaker 1: I think that's what he said that that was a
Speaker 1: fun interview. But yeah, I mean we're talking about numbers
Speaker 1: that we haven't seen since if you think about headline inflation,
Speaker 1: if you think about core PC, which is what the
Speaker 1: FED likes to look at. I mean a lot of
Speaker 1: money managers that I talked to that, I mean, even
Speaker 1: if you've been money managing money for fifteen for twenty years,
Speaker 1: you haven't seen these numbers in a long time. And
Speaker 1: I mean myself, as a millennial, I know a lot
Speaker 1: of people who casually trade in the market. I mean
Speaker 1: that when they came into being started, you know, paying
Speaker 1: attention to trading stocks, all they've really known is super
Speaker 1: low interest rates, tech dominating everything. There's a potential for
Speaker 1: a real reshuffling of leadership here, which is a really
Speaker 1: interesting time to be alive. And so, Katie, when when
Speaker 1: we're talking to people who are attempting to like navigate
Speaker 1: how they construct portfolios around this and this feeling like,
Speaker 1: as one guy said, it's like if I get this,
Speaker 1: if I get this wrong a year out, like I'm
Speaker 1: kind of screwed. I have to get it right. Um,
Speaker 1: how how existential is this for people? Are they feeling like,
Speaker 1: are they feeling it with every decision that they make
Speaker 1: or and and how far out are they even attempting
Speaker 1: to look? Well, if you're looking two to three years
Speaker 1: out and you know you think this is uh just
Speaker 1: going to be an issue, maybe you know inflation will
Speaker 1: peak in February two and start to cool off. If
Speaker 1: you really in two to three out three years out,
Speaker 1: you're probably not that stressed about it. You're still going
Speaker 1: to be, you know, looking for the best companies, etcetera.
Speaker 1: But if you think that this really is we're going
Speaker 1: to see a sustained spiral upward and inflation may be
Speaker 1: driven by wage pressures, you're probably nervous here. And I
Speaker 1: spoke to Michael schul for this. Peach SE's the CEO
Speaker 1: of market Field Asset Management, Super Smart. He said, the
Speaker 1: real risk here is that basically bond investors reach a
Speaker 1: psychological breaking point when it comes to real rates, because
Speaker 1: real rates at record lowse deeply negative. At a certain point,
Speaker 1: you start to demand more, and you know this starts
Speaker 1: and ends with the bond market. If that starts to happen,
Speaker 1: you start to get cracks where the bond market isn't
Speaker 1: necessarily taking its cues from what the FED is saying
Speaker 1: that reverberates across assets. That has you know, really wide ranging,
Speaker 1: not very good implications for equities. I'd say, for sure,
Speaker 1: what about what the FED does and how that will
Speaker 1: impact this is That's the question. And this is something
Speaker 1: I was talking about with Matt Miller that you know,
Speaker 1: you think back to Volker who what hyped rates to
Speaker 1: which which kind of went against the thinking, right like
Speaker 1: why would you do higher rates in a high rate environment?
Speaker 1: But that's exactly what was needed absolutely. I mean I
Speaker 1: can't imagine a power FED doing that. I can't imagine
Speaker 1: a brainerd Fed doing that. I mean, this current regime
Speaker 1: of FED policy, we know that they want to let
Speaker 1: inflation run hot for a while. And I mean, even
Speaker 1: if you look at what's priced into markets right now,
Speaker 1: the terminal rate is priced in at one point seven
Speaker 1: five per cent. That's a pretty shallow hiking cycle that's
Speaker 1: priced in. It's far, far, far cry from So what's
Speaker 1: at stake here for the folks you talked to on
Speaker 1: Wall Street about the ones who are going to make
Speaker 1: or break their careers. Well, again, did bring it back
Speaker 1: to Michael Scholl. He said that you know, if the
Speaker 1: worst case scenario is right, that absolute psychological breaking point.
Speaker 1: This wouldn't be a five to send percent correction and
Speaker 1: then we bounced back. This would be a sign a
Speaker 1: market of significant losers. That wouldn't be winners and losers. Right,
Speaker 1: there's the likes of somebody getting it right and for
Speaker 1: us for like the next five years saying remember he
Speaker 1: made or she made that great call. I mean, Michael
Speaker 1: Burry is proof. We talked about him all the time,
Speaker 1: like big short fame came to prominence during you know,
Speaker 1: the last financial crisis. How many years ago? Was that
Speaker 1: a long time? And he did just end his bet
Speaker 1: against Tesla, Yeah, he sure did. Anyways, great stuff and
Speaker 1: the whole takeover that the section devoted to inflation in
Speaker 1: the magazine must read really looking at it from so
Speaker 1: many different angles. Katy gray Pelt, thank you so much,
Speaker 1: Bloomberg News crocess at report of Bloomberg Quick Take co
Speaker 1: anchor here in our interactive broker studio, and of course
Speaker 1: old Weber editor Bloomberg Business Week on the access line
Speaker 1: from Brooklyn. Check out that new issue of Business Week
Speaker 1: on newsstands, online and on the Bloomberg So much to come.
Speaker 1: You're listening to Bloomberg Radio. This is Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes. Tim Stinovich from
Speaker 1: Bloomberg Radio. All right, so we love the ticker, we
Speaker 1: love the company. We're talking about Petco Health and Wellness,
Speaker 1: which reported earnings this morning. No, it was a third
Speaker 1: quarter beat for earnings, revenues and com sales outlook from
Speaker 1: the CEO, Ron Coglin, saying the third quarter comp sales
Speaker 1: growth to giving them confidence to raise guidance for the
Speaker 1: full year of one. Even so, investors not impressed. The
Speaker 1: stockdown hovering near lows, down about twelve and a half percent.
Speaker 1: So great to have back with us in our interactive
Speaker 1: broker studio. The chairman and CEO of Petco, Ron Coglin,
Speaker 1: joining us. Good to have you here, great to be here,
Speaker 1: Thanks for having me. We'll talk to us about the quarter.
Speaker 1: It seemed like a pretty good one. Yeah, I mean
Speaker 1: we had a great quarter. If you look on the
Speaker 1: top line, we were up fift we asked it through.
Speaker 1: On the bottom line up sevent um. If you look
Speaker 1: on a two year basis very strong. You look at
Speaker 1: our digital business up thirty plus hundred and fifty percent
Speaker 1: on a two year basis, which is one of the
Speaker 1: strongest prints in terms of digital business of any retailer.
Speaker 1: We're gaining share in a growing category. But and also
Speaker 1: we uh we added fifty three million dollars of gross
Speaker 1: margin year over years. But from a gross margin rate standpoint,
Speaker 1: there was three dynamics. One was we sold more consumables
Speaker 1: food and treats versus supplies. And I can explain that
Speaker 1: more um we have right now. Okay, alright, so basically,
Speaker 1: let's talk about a pet's life side. Um you're one
Speaker 1: of a pet. So first of all, the question there's
Speaker 1: been a question do people spend more year one and
Speaker 1: then down in year two. It's common all through the
Speaker 1: pets life, with the exception of end of life where
Speaker 1: you have more m r X and more veterinary bills.
Speaker 1: But it's your one two is the same, but the
Speaker 1: mix is different. You're one, you get your great you
Speaker 1: get your bed, you get your leash, your collar. Year
Speaker 1: two the pets put on my guys case about and
Speaker 1: guess what. The bowls are bigger, the fill is bigger.
Speaker 1: So what happens is the food versus supplies mix is adjusted.
Speaker 1: This is amplified because of the pandemic puppies. Uh, and
Speaker 1: so we had a mix towards consumables. The second thing
Speaker 1: that happened was we had basically two x the share
Speaker 1: game we had year ago because we're able to get
Speaker 1: our hands on supply and the other programs were doing so.
Speaker 1: Do you think that that shift towards consumables indicates that
Speaker 1: the pandemic pet boom is over? That we will not
Speaker 1: continue to see the growth and people actually buying new
Speaker 1: pets and as a result, buying more from you. First
Speaker 1: of all, we prefer adopted versus by adopt. I'm sorry,
Speaker 1: you know, sadly no I should say. I wasn't picking
Speaker 1: on you. It's just with our pet go love. We
Speaker 1: support all the rescues and we're trying to eliminate ethan
Speaker 1: petty youthan age which unfortunately still exists. Um. But actually
Speaker 1: adoptions are still at an elevated level. They're just not
Speaker 1: the exact same level of two thousand and twenty, which
Speaker 1: was you know, the planets aligned two thousand twenty. But
Speaker 1: it's still at an elevated level. But the second thing
Speaker 1: that we now know is millennials and Gen z ers
Speaker 1: adopted a lot of those pets and guess what they do.
Speaker 1: They spend more, So spend per pet is going up.
Speaker 1: So from an industry standpoint, the industry went from a
Speaker 1: prediction of six to seven percent from one to twenty
Speaker 1: five to prediction of seven percent for those years. So
Speaker 1: the industry is going to be strong and we're gaining share.
Speaker 1: So what would you say to investors like, oh my god,
Speaker 1: you've got it wrong. Yeah, I would say we have
Speaker 1: a great category, we're gaining share, and there were some
Speaker 1: unique dynamics between twenty and twenty one that are playing
Speaker 1: on the gross margin. But in this market where you
Speaker 1: have consumers wanting to spend more, the main thing is
Speaker 1: the gross margin dollars, not the rate. Because we've got
Speaker 1: fifty three million more gross margin dollars and we flowed
Speaker 1: to the bottom line ahead of our top line. So
Speaker 1: I think that we're executing very well in this market.
Speaker 1: What's the outlook from here? And we've got to ask
Speaker 1: you a little bit about supply chain. I mean we
Speaker 1: ask everybody, and I'm sure you've been asked a million
Speaker 1: times here in this latest quarter, what's your supply chain like? Yeah, Well,
Speaker 1: first on the outlook, we raised our guidance. So it's
Speaker 1: our third executive beaten, beaten raise uh and early Q
Speaker 1: four is strong. And that's what we said today. UM.
Speaker 1: In terms of supply chain, from our standpoint, we only
Speaker 1: have about a third of our revenue of our revenue
Speaker 1: that is exposed international supply chains. The remainder of it
Speaker 1: is domestically sourced or services. We have less exposure to
Speaker 1: that issue. But that said, we're moving on to carriers
Speaker 1: that have new carriers that have capacity, new ports that
Speaker 1: have capacity. So our supply chain team is doing a
Speaker 1: great job being nimble, UM, because it has to be
Speaker 1: nimble because it's strained. Because you look at Long Beach, right,
Speaker 1: there's lots of conversations about Long Beach, UM. But you know,
Speaker 1: at the same time, we got enough supply to you know,
Speaker 1: grow fifteen percent. And if you ask me our consul strength,
Speaker 1: we got you know, more than our fair share of supply.
Speaker 1: What's the port you're using that's not as crossed, Um,
Speaker 1: There's there's Northwest Ports, there's Texas Ports. So we're being
Speaker 1: creative as we as we wherever there is capacity. All right, Yeah,
Speaker 1: I just want to ask one more on margins because
Speaker 1: we saw a few different stories played, especially with Target
Speaker 1: and Walmart this week, sort of absorbing those costs rather
Speaker 1: than passing them on to consumers. How are you thinking
Speaker 1: about it right now? Yeah, So we have a highly
Speaker 1: un elastic category. We have the highest spending pet parents
Speaker 1: in our portfolio. So the way we see it is
Speaker 1: we have offerings for every consumer. So if you want
Speaker 1: to high end fresh frozen, we have it. If you
Speaker 1: want a premium, you want a value, we have a
Speaker 1: great value in our own brand, Wholehearted. So we make
Speaker 1: sure we have are offering for everybody. But at the
Speaker 1: same time, you know we are able to pass through
Speaker 1: a lot of that pricing. Hey what about getting workers stores?
Speaker 1: How tough is that? Yeah, Well, in the last year
Speaker 1: we had double digit increases and wages. We are bonus.
Speaker 1: We just paid out above target because the mantra is
Speaker 1: as the company does better, employees do better, um, and
Speaker 1: we've done a lot of things and in return, what
Speaker 1: we're seeing is our retention amongst our pet care center
Speaker 1: our store employees full time employees is above nineteen in
Speaker 1: terms of retention. And actually, believe this or not, forty
Speaker 1: we had increase in applications versus the beginning of the year.
Speaker 1: So um, we feel good about how we're heading into
Speaker 1: the holiday, save all the workers you want. We feel
Speaker 1: good about how in the holiday. It's a tight market,
Speaker 1: but as I said, our applications are so all right,
Speaker 1: we gotta run. Thank you so much, appreciate it. Yeah,
Speaker 1: always great to have you on Coglan of course, he
Speaker 1: is the chairman CEO of pet Co. Joining us here
Speaker 1: in our interactive broker studio. You're listening to Bloomberg Business Week.
Speaker 1: What wolf all right? It is a great ticker. Come on,
Speaker 1: you're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So retail
Speaker 1: definitely uh, front and center. Americans are out their shopping,
Speaker 1: at least at Macy's and Calls, both stocks staring in
Speaker 1: today's trade. Both beat third quarter sales expectations and both
Speaker 1: raised full year outlooks. Macy's tim is up roughly two
Speaker 1: and twenty seven percent so far this year. Calls is
Speaker 1: up about forty nine percent this year. Well, let's get
Speaker 1: to it with Jordan Holman, retail reporter for Bloomberg New
Speaker 1: She joins us on the phone from Atlanta, Jordan's I
Speaker 1: want to start with with Macy's. What do we learn
Speaker 1: in the company's most recent earnings report that's really got
Speaker 1: investors so excited. So Macy's supposed to have stronger expected
Speaker 1: earnings um SO sales were very strong this past quarter,
Speaker 1: and I think investors also got excited about their due
Speaker 1: strategy around digital. So today Macy's announced that they would
Speaker 1: launch a digital marketplace, so highly curated um products and
Speaker 1: then also third party products. And this is a way
Speaker 1: a trend that we've seen in retail. You know, very
Speaker 1: specific about the type of products that you're marketing to folks,
Speaker 1: and it looks good. So Macy's has done strong on this.
Speaker 1: And the last thing I would say is that people
Speaker 1: are closely watching inventory levels going into the holiday season,
Speaker 1: especially with all the concern about supply chain. Macy showed
Speaker 1: that they're in a good position. Macy's has been on
Speaker 1: a tear this year. As I mentioned that more than
Speaker 1: two here, they really got lost in kind of the
Speaker 1: old ways of doing retail for a long time. It
Speaker 1: sounds like they've really awakened and are really embracing digital.
Speaker 1: It is you mentioned, is it all about that really
Speaker 1: going forward? And the growth that they're seeing. Well, Macy's
Speaker 1: has also had some encouragement to get more into digital,
Speaker 1: and not just from consumers starting to shop more mobile
Speaker 1: on digital, but think about activist investor John of Partner's
Speaker 1: earlier this month. UM. They have pushed Macy's UM to
Speaker 1: consider spending off their e commerce business UM from their
Speaker 1: traditional brick and mortar business, and that's really reinvigorated the
Speaker 1: conversation about how valuable a digital side of retail business
Speaker 1: can be. So that was another news item that happened
Speaker 1: today with Macy's. They said that they have hired alex
Speaker 1: Partners to help them evaluate that process to see if
Speaker 1: that's something that they would want to do. That's interesting.
Speaker 1: I mean, we are, Caroline, I talked a lot about
Speaker 1: this last week when we talked about the end of
Speaker 1: the conglomerate. But why would we see and what would
Speaker 1: be helpful to Macy's to separate these businesses? And I
Speaker 1: certainly understand the difference in growth, but can't you have
Speaker 1: you know, some quote unquote synergies here. I mean, certainly,
Speaker 1: in recent years, at least before the pandemic, we saw
Speaker 1: online only directing consumer companies start to open brick and
Speaker 1: mortar stores they could get that in personal experience in
Speaker 1: places because I think, like a um czar right exactly,
Speaker 1: that seemed to be able to do both exactly. Yes, um,
Speaker 1: And that's a really fair question because, like you said,
Speaker 1: the next move for growth for a DBC is always
Speaker 1: opening store. So there's still something about a store that
Speaker 1: drives growth. And Macy's earlier today they really emphasize their
Speaker 1: omni channel strategy. Is the fact that when you have
Speaker 1: a brick and mortar store in a certain zip code,
Speaker 1: they see digital cells go up. So they are tying
Speaker 1: the connection between that. And when I was talking to
Speaker 1: um MA CEO jeffin Nett earlier today, he said, we've
Speaker 1: looked at this before. This is not new for us
Speaker 1: considering um if we should split off the business. But
Speaker 1: because of the high valuations that we're starting to see
Speaker 1: um when it comes to e commerce, you look at
Speaker 1: Saxforth Avenue, they spun off their e commerce business. That
Speaker 1: he said it is they're doing their due diligence to
Speaker 1: see if that actually the right strategy. But let's left. Look,
Speaker 1: let's left for the brick and mortar. If you if
Speaker 1: you spin off e commer like, how do you have
Speaker 1: that division of a Macy's brand, one being e commerce
Speaker 1: and one being brick and mortar. You honestly would make
Speaker 1: you would have to make sure you don't have silos
Speaker 1: when talking because the way that we as consumers shop,
Speaker 1: we expect if we see something online, maybe we do
Speaker 1: want to go to the store and try it on.
Speaker 1: And if those businesses aren't connected at all, there could
Speaker 1: be friction, which is like the worst thing that a
Speaker 1: retailer want. So it's this it's kind of going back
Speaker 1: to the early two thousand's when they were separate businesses
Speaker 1: for a lot of retailers and that caused friction, and
Speaker 1: so it's interesting to see this conversation come back to
Speaker 1: see maybe it would be good for shareholders, but as
Speaker 1: consumers experienced it, that might not be the case. Okay,
Speaker 1: let's talk Coals because it's another company that you cover.
Speaker 1: What did we learn about their company's most recent quarter
Speaker 1: and how they're thinking about the remainder of the year.
Speaker 1: Cos also posted strong sales for this quarter. They raised
Speaker 1: their outlook um. One thing that we did see but
Speaker 1: that could be a concern for the rest of the year,
Speaker 1: is that their inventory levels are down, and even though
Speaker 1: they did want to work on lowering inventory, UM, the
Speaker 1: Cold CEO told me today that that that's not as
Speaker 1: low as they wanted to go, and part of it
Speaker 1: with supply chain issues. Women's apparel really took a hit. Um.
Speaker 1: And so as you look into the holiday season, UM,
Speaker 1: it just kind of adds to the concerns that people
Speaker 1: have about out of stocks. But they did say that
Speaker 1: items like home and toys, which are major during the
Speaker 1: Christmas season, are well stocked. Right, Like, if you walk
Speaker 1: into a coal store and the shelves are empty or
Speaker 1: you can't find what you need, you're gonna walk out
Speaker 1: and you're gonna go somewhere else, And that means you're
Speaker 1: also going to maybe buy other things elsewhere. So those
Speaker 1: inventory levels are always key. Hey, Jordan, thank you, Bloomberg
Speaker 1: News retail reporter Jordan Holman in our actually, I should say,
Speaker 1: on the phone from Atlanta, just looking at the S
Speaker 1: and P supercomposite retailing industry groups, some of those results
Speaker 1: from Macy's from Cole's UH sending the overall group hires
Speaker 1: up about two point six percent overall. That inventory comment
Speaker 1: that Jordan's made, UH, it's particularly important given where we
Speaker 1: are in the holiday shopping season, just before Thanksgiving right
Speaker 1: this point. Yes, I've seen have you seen all these
Speaker 1: like pieces that are being done about you know, different
Speaker 1: supermarkets or stores in detail because their shelves are empty.
Speaker 1: They're like trying to figure out how to fill out.
Speaker 1: I did see that and doing kind of creative things
Speaker 1: that they might you know, get your shopping then I
Speaker 1: haven't even started. Same. We got time, We got time, right,
Speaker 1: that's what we're telling ourselves. Yeah, but you let me drive?
Speaker 1: Oh no, no, no no, this is not a twin
Speaker 1: home an please, I'll do the ride gravels. I want
Speaker 1: to drive. It's a good question. Drive is the drive
Speaker 1: to the globe? On Bluebird Radio? All right, folks, just
Speaker 1: about ten minutes left in today's trading session. And will
Speaker 1: it be another record for the S and P five
Speaker 1: hundred that would make it I think sixty six for
Speaker 1: the year overall, I am, or the Nazak one hundred two,
Speaker 1: we could see another record. They're really propelled by Nvidia
Speaker 1: and some of those tech names. But quite a bounce
Speaker 1: back that we've seen in today's trading uh session. When
Speaker 1: it comes to equities, we're well off our loads of
Speaker 1: the session. So let's get to it with our guest.
Speaker 1: Christian Manafo is with us CIO over at Liberty Street
Speaker 1: Advisor's portfolio manager of the Private Shares fun It's a
Speaker 1: closed in interval fund investing in private, operating, late stage,
Speaker 1: venture backed growth companies. He is with us on the
Speaker 1: phone in New York City. Christian, how are you. I'm
Speaker 1: doing well. I hope you guys are having a great day.
Speaker 1: Great day, because we're almost at Friday lunch with you.
Speaker 1: We're loving it. We're loving it. UM investors kind of
Speaker 1: loving the trade. I mean, at least they're dragging it
Speaker 1: down or dragging it back from some of its loads today.
Speaker 1: What is it about the market environment right now, the
Speaker 1: financial market environment that you find in stay Well, you
Speaker 1: know there's the market we played in particular, which are
Speaker 1: the private markets. You know, we've just never seen this
Speaker 1: level of demand from all investors, including public market investors.
Speaker 1: And if we we really try to deconstruct that demand,
Speaker 1: which is also flowing into the public markets, there's just
Speaker 1: so much demand for you know, disruptive technology and innovation.
Speaker 1: On one hand, we know that this works, you know, favorably.
Speaker 1: In other hand, it works you know, more in a
Speaker 1: more challenging way. What I mean by that is, you know,
Speaker 1: the surge of demand in our market at least is
Speaker 1: attracting investors who traditionally have not been active here, and
Speaker 1: some of them have been driving up certain valuations while
Speaker 1: also providing opportunities for certain companies to go public that
Speaker 1: we would argue, you know, may not be ready to
Speaker 1: be public. Right, So there's premature opportunities for some of
Speaker 1: these private market companies to go public, and we're seeing
Speaker 1: all types of volatility. But that said, overall, we continue
Speaker 1: to see a lot of robust businesses that are growing
Speaker 1: in the private market and that are doing quite successful. Okay,
Speaker 1: so with market companies, So can explain explain exactly how
Speaker 1: investors can access this? Uh? Even like, you know, even
Speaker 1: if it's been difficult for accredited investors to get into
Speaker 1: these types of companies, Like, how can an investor actually
Speaker 1: get into the private Shares Fund? Yeah? So, you know,
Speaker 1: our objective in creating this fund was to democratize access
Speaker 1: so that not just large institutional grade and high net
Speaker 1: worth investors can be able to access all this private
Speaker 1: market innovation and growth, but also that you know, an
Speaker 1: investor with as little as without accreditation can access it.
Speaker 1: And so we have a fund um as you said,
Speaker 1: that structured as a Fortiac interval fund. It trades with
Speaker 1: a ticker on the ticker you know, you can look
Speaker 1: up this p I I v X and you know,
Speaker 1: with this ticker on a daily basis, we provide investors
Speaker 1: the opportunity to invest in our fund. It provides you know,
Speaker 1: we believe are a lot of inefficiencies compared to traditional
Speaker 1: private market strategies, one of which is the ability to
Speaker 1: democratize the access. We also think there are are cost efficiencies.
Speaker 1: You know, there's an evergreen nature, so investments don't have
Speaker 1: to worry about investing every few years to stay in
Speaker 1: touch with our best ideas. So it's a it's a
Speaker 1: really disruptive fund structure. It's available on most platforms, and
Speaker 1: we're offering it um at what we believe are very
Speaker 1: attractive economics. Help me understand something. It looks like your
Speaker 1: biggest holding the Goldman Sachs Government Fund. It looks like
Speaker 1: you've got a lot of cash. Are a lot of
Speaker 1: assets in cash or cash like investments? Is that because
Speaker 1: it's hard to find opportunities? I mean, I guess I'm
Speaker 1: trying to ask, is that normal indicative of or of
Speaker 1: pessimism about the outlook, or indicative of that there's nowhere
Speaker 1: that makes sense to put that cash right now? Yeah,
Speaker 1: no O. Our fund right now is sitting a little
Speaker 1: over seven million and a M. The vast majority of
Speaker 1: that is invested. We actually have a smaller cast position.
Speaker 1: The way the way the private markets work is you
Speaker 1: can't just press a button and buy the assets you
Speaker 1: want to own. That we have contractual obligations against a
Speaker 1: lot of the underlying deals that we invest in because
Speaker 1: private markets are nowhere near as efficient as the public
Speaker 1: markets will could take you know, weeks or months to
Speaker 1: execute on private market opportunities. That that way, that is
Speaker 1: where a lot of the attractive this comes in, right
Speaker 1: because there is a lot of asymmetric information and an
Speaker 1: efficiency that we can one take advantage of them to
Speaker 1: offer that you know, to our investors. But the majority
Speaker 1: of our a u M is currently deployed across the
Speaker 1: portfolio of nearly eighty zero positions. What companies are attractive
Speaker 1: to you right now in not just in the portfolio,
Speaker 1: but outside of the portfolio. Yeah, I mean, when we
Speaker 1: think about you know sector themes. Obviously, the space economy
Speaker 1: is an area of substantial interest. You know, we think
Speaker 1: this represents a compelling opportunity and there's a lot of
Speaker 1: historical advancements in terms of cost efficiencies as we're seeing
Speaker 1: um as well as you know, more safe ways to
Speaker 1: get payloads up there. Uh. You know, financial technologies an
Speaker 1: area obviously that's disrupting all aspects of our life. You know,
Speaker 1: we haven't gotten incredibly deep into the blockchain crypto world yet.
Speaker 1: We're still you know, being cautious there, but we do
Speaker 1: think there's a lot of disruption even actively playing a
Speaker 1: role in payments and reinventing how lending and personal finance work. Cybersecurity,
Speaker 1: we think is a very attractive area for obvious reasons.
Speaker 1: Healthcare innovation, you know, the ability to provide various digital
Speaker 1: health solutions. You know, cloud technology. When we think about
Speaker 1: what it's called, you know, generally data gravity, which is
Speaker 1: simply the amount of data created far exceeds the bandwidth
Speaker 1: that allows us to process it. And when you have
Speaker 1: all of this cloud migration to you know, off premise,
Speaker 1: hybrid or even on premise, there's a lot of challenges
Speaker 1: with the interoperability of the applications and security, So there's
Speaker 1: a lot of technology that's helping that work. We think
Speaker 1: agricultural technology is really attracted. So without naming specific companies,
Speaker 1: we really think there's a lot of innovation that's happening
Speaker 1: and we're trying to provide to our clients. But twenty
Speaker 1: three and me is one that is certainly uh of
Speaker 1: interest correct? Uh? And the reason I bring it up
Speaker 1: is Business Week recently did a story and it's not
Speaker 1: just about you know, figuring out your ancestry, but it's
Speaker 1: also then being able to collect data and then ultimately
Speaker 1: use it to develop healthcare. Uh. Is that of interest
Speaker 1: to you? And just got about thirty seconds forgive me? Yeah,
Speaker 1: it is, it is and and that's that's that's a
Speaker 1: position that you know, our fund is held. Um. I
Speaker 1: think what you're getting at is this is becoming more
Speaker 1: of a a genomics play, right, and a lot of
Speaker 1: the pharmaceutical companies can use this data to really help
Speaker 1: create a lot of different solutions using the research they
Speaker 1: can apply with this data. So, yeah, that's absolutely a
Speaker 1: very interesting name. All right, kind of run really fascinating, uh,
Speaker 1: And I hope you come back soon. I really appreciate it.
Speaker 1: Christian Enofo. He is chief investment officer at Liberty Straight Advisors,
Speaker 1: partfolio manager of the Private Shares Fund UH and very
Speaker 1: interesting to hear about UM some of the areas that
Speaker 1: he's finding that take her by the way, P I
Speaker 1: I v X aerospace, fascinating aerospace, UM satellites up there. Yeah. Absolutely,
Speaker 1: and it feels like I'm, you know, talking down miss
Speaker 1: Cathy Wood the ideas. Thanks for listening to Bloomberg Business Week.
Speaker 1: Download the podcast on iTunes, SoundCloud, or Bloomberg dot com,
Speaker 1: and you can also listen to our radio show at
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Speaker 1: Search to Bloomberg Global News