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Speaker 3: We learned today as well, alex let US consumer confidence
Speaker 3: dropped to a five month low in December, driven by
Speaker 3: concerns over the economy and potential Trump policies. In a
Speaker 3: survey by the Conference Board, forty six percent of respondents
Speaker 3: expected tariffs to raise their cost of living. Joining us
Speaker 3: now to discuss is the researcher behind the report, Dana Peterson,
Speaker 3: chief economist at the Conference Board. So, Dana, I mentioned
Speaker 3: those numbers. Present situation was fine, came in at one
Speaker 3: forty point two, just a little bit down from one
Speaker 3: forty point nine the previous month, but expectations were down
Speaker 3: almost eleven points, down from ninety two point three to
Speaker 3: eighty one point one. How concern should we be?
Speaker 4: Well, certainly, the present situation, as you said, was only
Speaker 4: a tick downward, but the expectations really fell backward after
Speaker 4: several months of improvement and it was across all three
Speaker 4: components of that, that's business conditions on what they think
Speaker 4: about employment six months ahead and also incomes.
Speaker 5: Was that shown on party lines at all? I'm just
Speaker 5: wondering because a lot of it was led by the
Speaker 5: tariff increase expectation.
Speaker 4: Right, Well, we did ask a special question about what
Speaker 4: consumers are thinking about in terms of policy for next year,
Speaker 4: and certainly many of them are concerned about tariffs and
Speaker 4: whether or not tariffs are going to be inflationary or not.
Speaker 4: And indeed, in the write ends where we ask consumers,
Speaker 4: what's the most important thing that you think will impact
Speaker 4: the economy good or bad, certainly prices leapt up, inflation
Speaker 4: to the top, but also not long out, not far
Speaker 4: after that, we're certainly elections residents. And also the word
Speaker 4: tariff actually searched from zero to something notably positive. So
Speaker 4: consumers are paying attention to what's going on in politics,
Speaker 4: and they're starting at least they're curious to know what
Speaker 4: that's going to mean for their bottom lines.
Speaker 3: Yeah, I mean, it's more fodder for the Federal Reserve
Speaker 3: right to continue to focus on inflation, or to refocus
Speaker 3: on inflation again as opposed to the unemployment part of
Speaker 3: the manday, which it looked like they had been at
Speaker 3: least swerving towards.
Speaker 6: Well.
Speaker 4: It seems like it is something that FOMC participants, at
Speaker 4: least some of them, according to Chair Powell, are looking
Speaker 4: at and did fold in their expectations of what policy
Speaker 4: might look like next year and the impacts on the consumers. Certainly,
Speaker 4: we have the debt ceiling rolling around, we have the
Speaker 4: tax cliff of twenty twenty six that's going to need
Speaker 4: to be dealt with, and certainly there are the threats
Speaker 4: of renewed or at least intensified trading wars. Trade wars
Speaker 4: because certainly the TARISA put in place years ago or
Speaker 4: never lifted, we could see more that again will impact
Speaker 4: consumers because companies that have to pay those tariffs here
Speaker 4: in the US are just going to pass on those
Speaker 4: costs to the consumer.
Speaker 5: That's sort of also My question on that is that
Speaker 5: this data was very different from the rest of the
Speaker 5: surveys that we've gotten on the consumer, and I'm wondering
Speaker 5: why you think that's different and why the feeling then
Speaker 5: that maybe the teriffs will get passed on to the consumers.
Speaker 5: I'm thinking about you mish for example, there was some
Speaker 5: stockpiling and sort of buying now and not later because
Speaker 5: of tariffs. But what did you make of the negativity
Speaker 5: in your report versus other surveys.
Speaker 4: Well, I mean, again, just looking at the headline, it's
Speaker 4: made up of five different indicators. Two are about business,
Speaker 4: two are about the employment situation now in the future, and
Speaker 4: the other ones about income. So when you put all
Speaker 4: those things together, as I mentioned, business, employment and income
Speaker 4: were down. But the index itself does not reflect anything
Speaker 4: about politics. So we're understanding the thoughts that consumers are
Speaker 4: interested or and some of them are concerned from our
Speaker 4: special question that we asked and also from the right
Speaker 4: ins which we usually do report on. So you know,
Speaker 4: all the writings were pretty mixed. Some said that they
Speaker 4: were excited about what's going to happen next year, others weren't.
Speaker 4: But certainly, I think consumers who've just experienced a lot
Speaker 4: of inflation and prices are certainly much higher now than
Speaker 4: they were before the pandemic, are focused on inflation, and
Speaker 4: certainly the risks around that come from things that are
Speaker 4: already putting up pressure on inflation, including insurance, labor costs
Speaker 4: from labor shortages. Also, housing costs aren't following as fast
Speaker 4: as we want. But there's also potential for some things
Speaker 4: that might be inflationary in twenty twenty five, and they're
Speaker 4: all focused on that right now.
Speaker 7: Just briefly, Danna, what did you make of the rest
Speaker 7: of the data out today?
Speaker 3: We had new home sales for November, not as good
Speaker 3: as anticipated, but still higher.
Speaker 2: Yeah.
Speaker 4: So, actually, when we ask consumers about whether or not
Speaker 4: they're going to purchase homes, we've seen a little bit
Speaker 4: of an improvement over the last six months, but.
Speaker 6: It's still pretty low.
Speaker 4: But the good news is that despite the fact that
Speaker 4: consumers are concerned or worried or thinking about the next year,
Speaker 4: they still plan to buy. They're still planning on buying cars,
Speaker 4: especially use cars, but also new cars. They're planning on
Speaker 4: going on vacation a little bit less, but if they
Speaker 4: go on vacation, they're looking to go on international vacations.
Speaker 4: And when it comes to services, they're still looking at
Speaker 4: experiential services like going to the movies or streaming, or
Speaker 4: going to hotels and restaurants and that sort of thing. So,
Speaker 4: despite whatever they're worried about, consumers still think that right
Speaker 4: now it's easy to find a job, and as long
Speaker 4: as they are working, we think that they're going to
Speaker 4: continue to spend, and potentially that spending will lean against
Speaker 4: some of the downside risks that we see for next year.
Speaker 5: Yes, all right, Dana, thanks a lot, really appreciate Dana Peterson,
Speaker 5: Chief Economists at the Conference Board.
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Speaker 3: Well, let's continue the conversation now with Andrew Graham, who
Speaker 3: is managing partner at Jackson Square Capital. Andrew, we've been
Speaker 3: talking about targets on the S and B five hundred
Speaker 3: and how really, except for maybe Stiefel and maybe one
Speaker 3: or two other houses, they're pretty much all higher from
Speaker 3: here for next year. What are you looking for out
Speaker 3: of this SMP, which, let me just remind everybody is
Speaker 3: up like fifty percent over the last two years.
Speaker 8: Yeah, and fully valued, you know, sort of a multiple
Speaker 8: basis forward multiple. Now we're going on twenty six numbers
Speaker 8: and you're still at twenty times forward estimates in twenty
Speaker 8: twenty six. So what we're trying to do is just
Speaker 8: apply you know, sort of a conservative earnings growth figure
Speaker 8: above nine percent, which is conservative, it's it's less than consensus,
Speaker 8: which is in the low whatever, eleven and twelve percent.
Speaker 8: So put nine percent on top of that, maybe sixty
Speaker 8: five hundred is a conservative target for US at least
Speaker 8: for at least US anywhere I am.
Speaker 5: Well, yeah, and then considering that, you know, we have
Speaker 5: sixty seven hundred, there's some seven thousand dollars calls, so
Speaker 5: I could argue that that would be conservative. What's going
Speaker 5: to be the biggest mover do you think for that
Speaker 5: sixty five hundred call? Is it going to be policy
Speaker 5: from DC? Is it going to be fed or is
Speaker 5: it going to be bottoms up?
Speaker 9: I expect it to be policy from DC.
Speaker 8: You know, generally speaking, I think we're going to go
Speaker 8: with the US economic resilience Beme. Still, there's no reason
Speaker 8: to doubt that we see that, you know, happening in
Speaker 8: a higher for longer rate environment, you know, reinforced by
Speaker 8: supportive domestic policy, more expansion of the business cycle, solid
Speaker 8: labor market, still in a broadening AI cycle, which I
Speaker 8: think is really important I think for for viewers and
Speaker 8: listeners to.
Speaker 9: Pay attention to.
Speaker 8: So the pro business policies also may be lower energy prices,
Speaker 8: stronger capital markets, more deal activity. But the path I
Speaker 8: think to the policy change gonna be bumpier than most
Speaker 8: people expect, and the markets are vulnerable because a lot
Speaker 8: of that good news is priced in.
Speaker 3: You know, Andrew, many of our guests today talked about
Speaker 3: AI again being a theme next year, and you know,
Speaker 3: to look at the market today, there was no reason
Speaker 3: to suspect that it won't be a theme next year
Speaker 3: and a positive theme for the market. At the same time,
Speaker 3: you have to wonder if something else won't come along
Speaker 3: and oust it out of its prime position. I think
Speaker 3: you maybe quantum computing. We saw a little taste of
Speaker 3: that today.
Speaker 2: Yeah.
Speaker 8: I'm trying not to get distracted by the quantum computing
Speaker 8: thing because I think it's probably further out. But getting
Speaker 8: back to the yeah, betting back to the AI cycle,
Speaker 8: which I think everybody's looking for monetization in places other
Speaker 8: than semiconductors and you know, equipment that.
Speaker 9: Goes into data centers.
Speaker 8: There's been a lot of emphasis I think in the
Speaker 8: media on AI scaling laws, breaking down.
Speaker 9: I think that's wrong. I wouldn't buy into that at all.
Speaker 8: And I see these agentic models getting faster and they're
Speaker 8: being signs of monetization all over the place. There were
Speaker 8: certainly signs in service Now recent earnings report, and I
Speaker 8: expect to see the same thing prop crop up in
Speaker 8: sales in CRM Salesforce when they report earnings, maybe.
Speaker 9: In the summer.
Speaker 8: So we see this growing and not slowing down, and
Speaker 8: we expect software to be the primary beneficiary. What kind
Speaker 8: of names do you like, Well, we would mention service Now, Salesforce,
Speaker 8: and then maybe as honorable mentions HubSpot and Workday at
Speaker 8: some point going forward those that are among the bigger names.
Speaker 8: Cybersecurity is also going to be a consistent theme, and
Speaker 8: we see cyber arc as a beneficiary with their Ventify
Speaker 8: acquisition kind of getting into a positive agendic solution cycle.
Speaker 8: They have machine access access management at the core of
Speaker 8: their business, and we see that as a potential winner
Speaker 8: going forward. So we're trying to emphasize software over semking.
Speaker 8: We own a lot of semiconductors. We think that sort
Speaker 8: of you know phase one of the of the AI cycle.
Speaker 8: Phase two goes into software and We saw that show up,
Speaker 8: like I said, in service now, and we see that
Speaker 8: happening more and more in the coming year.
Speaker 3: Presumably, if you did all that work, you also looked
Speaker 3: at energy and energy to power AI and all of that,
Speaker 3: and obviously you came away with the notion that perhaps
Speaker 3: there wasn't any value to be had there.
Speaker 9: No, absolutely.
Speaker 8: I mean, that's an area that we're invested in Vistra
Speaker 8: as a stock that we own, independent power producer, but
Speaker 8: also vertive in you know, sort of the leader in
Speaker 8: data center cooling, a leader I think in liquid cooling.
Speaker 8: They have an opportunity to double their offerings in twenty
Speaker 8: twenty five, and that's a stock that we like a lot,
Speaker 8: So we're there. We just think that the dispersion or
Speaker 8: the difference between the performance between semiconductors and software is
Speaker 8: so wide right now, and we think the cycle trends
Speaker 8: that way, and so we're trying to get more exposure
Speaker 8: into software specifically.
Speaker 5: What dends this on a macro level? What makes you
Speaker 5: worried for these kind of calls?
Speaker 8: You know, I think you know the big change at
Speaker 8: the margin last week was the FED meeting. It was
Speaker 8: the updated median twenty twenty five dot. I thought consensus,
Speaker 8: you know, I was looking for two or three rate
Speaker 8: cuts suggested by the dots, and it was an unambiguous
Speaker 8: two rate cuts, you know, sort of the dot. The
Speaker 8: pattern was centered right there in the middle. And I
Speaker 8: think that was the thing that markets were most disappointed with,
Speaker 8: and maybe a hawkish tilt. And so if the FED
Speaker 8: is maybe less inclined to cut rates, and I think
Speaker 8: they'll pause in January, they might again unless there's some
Speaker 8: disinflation progress, they'll pause again in March. On the next
Speaker 8: right rate cut on paper here is June. But that
Speaker 8: would that sets you up for some some growth disappointments.
Speaker 8: So if if growth data disappoints or something along those lines,
Speaker 8: I expect markets to be more sensitive thinking to the FED,
Speaker 8: you know, is not maybe as eager to cut interest rates.
Speaker 8: I don't want to take away from the fact that
Speaker 8: FED put is clearly in place. You know, from our opinion,
Speaker 8: it's in place. But I don't think it's a tailwind.
Speaker 8: I think it's more of a floor.
Speaker 5: Got it all right, Andrew, thanks a lot, Really appreciate
Speaker 5: good stuff. Andrew Graham, managing partner at Jackson Square Capital,
Speaker 5: joining us on the markets.
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Speaker 5: Certain logistics and shipping companies are going to have a
Speaker 5: really good view into what that actually winds up looking like.
Speaker 5: So we wanted to get the take on that with
Speaker 5: the CEO of rx SO, Drew Wilkerson. He joins us now.
Speaker 5: So there's a lot going on with you, Drew. You
Speaker 5: guys have been really busy lately. In September, you finally
Speaker 5: absorbed Coyote Logistics, so that was quite a hurdle. You
Speaker 5: also are looking forward to twenty twenty five in terms
Speaker 5: of demand growth and tariff questions. You're start those down
Speaker 5: from late November by like twenty five percent. What's going
Speaker 5: on with you guys? What are some of the highlights?
Speaker 10: As you mentioned, we closed the acquisition of Coyote. We
Speaker 10: actually closed it fairly fast when you look at it
Speaker 10: from time of announcement to when we close. We close
Speaker 10: it within just a couple of months, and this is
Speaker 10: a transformational acquisition for US. It more than doubles our
Speaker 10: truck brokerage, making us the third largest truck brokerage in
Speaker 10: North America.
Speaker 9: Sets us up.
Speaker 10: Really good for growth because when we were doing due diligence,
Speaker 10: one of the things we looked at was the customer overlap,
Speaker 10: and there was not a lot of customer overlap. And
Speaker 10: we're going to get more exposure into some verticals that
Speaker 10: we weren't as strong as in like food and beverage
Speaker 10: from the acquisition. So really excited. We're in the early days,
Speaker 10: but so far as far out seeding, far exceeding our expectations.
Speaker 3: So you look at the likes of these Amazon on
Speaker 3: strikes very closely, I'm sure, And what do you see
Speaker 3: for the future of labor calls and the potential for
Speaker 3: any disruptions like that down the pike?
Speaker 10: Yeah, and transportation, anytime that there's a disruption or volatility,
Speaker 10: it actually creates a good thing on the transportation industry
Speaker 10: as you start to see tender rejections rise, and from
Speaker 10: that standpoint, you set yourself up in a position to
Speaker 10: be able to get spot loads and projects as others
Speaker 10: are falling off of it, so as things like that
Speaker 10: and cause disruption in the market. For us, that's actually
Speaker 10: the volatility is a good thing for our business.
Speaker 5: Volatility may be good, but questions and visibility on tariffs
Speaker 5: may not be. How are you guys preparing for next year?
Speaker 10: We're watching it extremely closely on what's going to happen
Speaker 10: from a teariff perspective, and overall long term, you know
Speaker 10: what it will do is it will drive more domestic transportation,
Speaker 10: and for us that's a good thing. We're the majority
Speaker 10: of our business, over ninety percent of our business is
Speaker 10: done entra US, So for us, the more that you
Speaker 10: see on souring into the US, it creates more transportation
Speaker 10: opportunities for us to be able to capitalize on.
Speaker 7: What are your margins like and how can you expand them?
Speaker 3: We saw obviously, you know, FedEx and the likes of
Speaker 3: USPS and so on trying to do the very same.
Speaker 3: I'm just curious that you know, particularly to the design
Speaker 3: when you're trying to make acquisitions, are there ways that
Speaker 3: you can cut costs?
Speaker 10: Yeah, And when you look at one of the things
Speaker 10: that we've been doing, we've been an early adopter in
Speaker 10: technology and the transportation industry, and if you go back
Speaker 10: and you look over the last decade, our margins have
Speaker 10: been some of the strongest in the industry. It's because
Speaker 10: we've invested so much into these pricing algorithms that allow
Speaker 10: us to have optimal pricing to both the customer and
Speaker 10: to the carrier. So we're going to continue to focus
Speaker 10: on technology and use it as ways to expand our
Speaker 10: margins but also increase our employee productivity. If you look
Speaker 10: over the last twelve months, our employee productivity is up
Speaker 10: fifteen percent. And so for us, if we're able to
Speaker 10: be able to do it, and we're able to increase
Speaker 10: our loads per person per day, then ultimately that will
Speaker 10: increase our overall margins.
Speaker 5: But when you look at, say the tariff situation, and
Speaker 5: you add that into your goals, like who pays for
Speaker 5: those tariffs? I mean, do you guys do it? Does
Speaker 5: the end consumer do it? And it's the end consumer,
Speaker 5: I would think that hurts demand. If it's you guys,
Speaker 5: I would think that hurts your margins.
Speaker 10: Yeah, I think that that's still unknown. Ultimately, I think
Speaker 10: it would be hard for it not to be passed
Speaker 10: down to the end consumer. If there was a rise
Speaker 10: in price that ultimately that would go back to the
Speaker 10: end consumer. But again something that we're watching very closely.
Speaker 3: Yeah, but you do have presidents, right, there were twists
Speaker 3: put on last time around, and some of those terriffs
Speaker 3: didn't come off during the Biden administration.
Speaker 7: So how has it impacted your business already?
Speaker 10: Yeah, so if you go back to the last Trump administration,
Speaker 10: it was actually a robust transportation cycle for US, and
Speaker 10: you know, there were there were highs and lows throughout
Speaker 10: the four years, but overall it was it was a
Speaker 10: strong transportation market. And some of the tariffs that you
Speaker 10: saw put on with China led to more domestic and
Speaker 10: more US Mexico trade. So our Mexico business has been
Speaker 10: up roughly thirty percent whenever we saw businesses shift from
Speaker 10: China into Mexico.
Speaker 5: So, but are you worried if we get tariffs on
Speaker 5: Mexico that's going to mess you guys up.
Speaker 9: We're watching it very closely.
Speaker 10: But again, you know, if there's more domestic loads and
Speaker 10: more domestic volume that goes out there, that's a good
Speaker 10: thing for US overall. But obviously if we're hurt for
Speaker 10: our trade partners to the north or to the south,
Speaker 10: is something that could have an impact on that volume
Speaker 10: and shift it to more domestic volume.
Speaker 3: You're the broker, right, but I'm sure gas prices impact
Speaker 3: you and how much your services are needed. So how
Speaker 3: important is it for the likes of r so that
Speaker 3: gas prices stay low.
Speaker 10: We watch fuel prices very very closely, but ultimately, for US,
Speaker 10: fuel prices are more of a pass through from the
Speaker 10: customer to the carrier.
Speaker 5: As a broker, can we talk about your stock for
Speaker 5: a second? And I appreciate your the CEO, so you're
Speaker 5: going to be like, I don't know why the stock
Speaker 5: is down twenty five percent in the last month. We're fantastic,
Speaker 5: I get that, but why is your stock down twenty
Speaker 5: five percent in last month?
Speaker 10: I think overall, if you go back and you listen
Speaker 10: to our earnings call, we said that this was going
Speaker 10: to be a muted peak season, and we were one
Speaker 10: of the first to say that this was going to
Speaker 10: be a muted peak season, and I think people are
Speaker 10: starting to see that play out now. The way that
Speaker 10: we've measured the stock is what it does over the
Speaker 10: long term, and if you look over the last twenty
Speaker 10: four months, it's up over twenty percent, and you know,
Speaker 10: for a cyclical market that's at the bottom of the
Speaker 10: cycle and been there for over two and a half years,
Speaker 10: we've got happy investors with how we've performed throughout the market,
Speaker 10: and we're not watching the stock price on a day
Speaker 10: to day basis. We're really watching to see what it's
Speaker 10: able to do on a one, two, three year basis.
Speaker 3: You know, we've been through a year where we've seen
Speaker 3: continuing wars, we've seen any number of elections, we've seen
Speaker 3: huge geopolitical turmoil and changes and so on. And you
Speaker 3: compete with the global companies, you compete with Chinese companies,
Speaker 3: you compete with Middle Eastern shippers, and so on. I'm sure,
Speaker 3: how does the prospects of maybe a commer twenty twenty
Speaker 3: five help your business as a tailwind?
Speaker 10: Well, first, I would say, remember, we're largely a North
Speaker 10: American based company, So what we're doing is transportation that
Speaker 10: is largely driven by truckload and LTL across North America.
Speaker 10: So a lot of the companies that you're referencing aren't
Speaker 10: necessarily who we're competing with on a day to day basis.
Speaker 10: But when you look at What it does is it
Speaker 10: would bring stability to overall forecasting and it will allow
Speaker 10: us to be able to forecast because if you go
Speaker 10: over the last three years, forecasting has been off when
Speaker 10: you look at where people have projected volumes to come
Speaker 10: in for the industry overall.
Speaker 7: Drews, thank you so much.
Speaker 3: A fascinating conversation, and do please keep a touch because
Speaker 3: I imagine it to be quite the quite the year
Speaker 3: guys next year and for a freight brokerages and shippers
Speaker 3: in general as well. Drew Wilkerson, CEO of RXO, thank
Speaker 3: you so much.
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Speaker 5: Well, no holiday season would be complete without the iconic
Speaker 5: Elf on the Shelf. The company behind the timeless brand's
Speaker 5: been working all year round to produce new products and
Speaker 5: entertainment value. Now, remember this is how the story on
Speaker 5: the Elf on the Shelf goes. Every night, the Santa's
Speaker 5: scout elves fly to the North Pole to report to
Speaker 5: Santa every day in December of children's have been behaving
Speaker 5: or misbehaving, and then every morning they wind up in
Speaker 5: a different spot to sort of see the real deal
Speaker 5: and check out what kids are actually doing well. Joining
Speaker 5: us now for more on this. The co founders and
Speaker 5: co CEOs of the Loomistella Company, Krista Pitts and as
Speaker 5: Shanda Bell. Shanda's also the chief marketing officer. Guys, Happy Christmas.
Speaker 5: This is always such a fun tradition for elp on
Speaker 5: the Shelf, particularly if you have kids. Krista, let's just
Speaker 5: start with you. How are things going this year? It's busy.
Speaker 1: I mean we liken our world to actually loading the
Speaker 1: sleigh on Christmas Eve, so up until the very last moment,
Speaker 1: we are working hard to make sure children feel all
Speaker 1: of the love and all of the joy on Christmas
Speaker 1: Morning that every parent dreams for their family.
Speaker 7: Christ I mean it's kind of genius.
Speaker 3: You know, you took Christmas and you know made it
Speaker 3: something that you basically own.
Speaker 7: What's next for Lumistella.
Speaker 1: Well, next year, we're very excited to announce that we
Speaker 1: are launching our very first ever chapter book. You know,
Speaker 1: children all over the world write us and say, what
Speaker 1: do the elves eat? You know, give us all the
Speaker 1: scoop on how Santa became magical and how did the
Speaker 1: elves get their magic? And so, because we have become
Speaker 1: the source of that information and we are owning the
Speaker 1: world of Santa Claus, the chapter book is going to
Speaker 1: answer a lot of those questions for kids. And we're
Speaker 1: really excited about that partnership with HarperCollins. So that drops
Speaker 1: in September.
Speaker 5: What do they eat? That's a brilliant I love that. Hey, Shanda,
Speaker 5: as a chief marketing officer, do you feel like Elf
Speaker 5: on the Shelf markets itself at this point or how
Speaker 5: much more work do you need to do to be like, no,
Speaker 5: we need to have more penetration here for Elf on
Speaker 5: the Shelf.
Speaker 1: That's a great question. It's a little bit of both, right. So,
Speaker 1: certainly social media has taken on its own, you know, Vibrato,
Speaker 1: but it's really our job as a company to listen
Speaker 1: to our consumers and the best way to do that is.
Speaker 6: Through social media. So that's how we continue to serve
Speaker 6: out new products.
Speaker 1: We certainly want to listen, but we also have a
Speaker 1: lot of questions that people want answered directly from the brand,
Speaker 1: So it can be anything from to Christa's point, you know,
Speaker 1: backstory type questions about the Santa Verse and the lore
Speaker 1: of all the other characters that we have to offer
Speaker 1: from Elf Babies this year and frost Pit.
Speaker 6: Or we have Little grunt Our new Little Yetti. Elf
Speaker 6: Pets are super popular.
Speaker 5: What's an else we hang one?
Speaker 1: Oh my gosh, alf Pets are amazing, so they each
Speaker 1: have their own animated special on Netflix. And elf Pets
Speaker 1: really teach children about faith, hope and love. So we
Speaker 1: use characters that kids love and imbue values that parents love,
Speaker 1: and so they have their own jobs for Santa Claus
Speaker 1: and help him make his journey on Christmas Eve using
Speaker 1: the values of faith, hope and love.
Speaker 3: Explain to me how you know, is there a part
Speaker 3: of the sort of coming up with all of these
Speaker 3: ideas at which point you have to pay somebody for
Speaker 3: the ip I mean, can you can you just tack
Speaker 3: yourselves onto the Santa mythology for example, and owners without
Speaker 3: actually paying anybody, or how does that all work?
Speaker 6: That's a great question too.
Speaker 1: So this year we launched the Santa Verse to consumers
Speaker 1: and really it's the entire enchanted world of Santa Claus.
Speaker 6: So it's every friend.
Speaker 1: It's every foe, it's an entire world of storytelling. And
Speaker 1: really every elf has its own story to tell. Santa
Speaker 1: Missus Clause, all the elf pets, they all have their
Speaker 1: own stories and each one is unique to every family
Speaker 1: that adopts it.
Speaker 7: So that's original to you. But then do you have
Speaker 7: to is there anybody out there.
Speaker 3: That owns any of this or is it in sort
Speaker 3: of the public domain if you know what I mean?
Speaker 3: Is there any copyright or is there any I don't know,
Speaker 3: a state of Santa Claus anywhere I don't know.
Speaker 1: Yeah, So we certainly have copyright and trade warn't protection
Speaker 1: on all the things that we can that we work
Speaker 1: with Santa Claus to produce and to come up with.
Speaker 6: You know, but it's an amazing mythology.
Speaker 1: It's the greatest mythology of our time that no one's
Speaker 1: really taken the time to explain, and nobody's in a
Speaker 1: better position to do that than us. So I have
Speaker 1: this amazing hero brand that's in you know, twenty eight
Speaker 1: million homes all around the world, and people do look
Speaker 1: to us for the answers. They want to know the
Speaker 1: mythology of Santa Claus in this entire world, this entire
Speaker 1: fantastical universe. And so it's our job as a company
Speaker 1: with one hundred and twenty employees that all work for
Speaker 1: Santa to answer those questions.
Speaker 5: So we're Bloomberg, So we got to ask the business
Speaker 5: questions along with all the fun stuff. If we get
Speaker 5: any kind of tariff increase, how does that affect Christa?
Speaker 5: What you guys do? Are you all manufactured in house
Speaker 5: in the US? Walk us through that?
Speaker 9: Yes, you know.
Speaker 1: I had the pleasure of being on Bloomberg a little
Speaker 1: earlier this year with Vonnie, and I explained that while
Speaker 1: we fully support our government's efforts to secure feared trade
Speaker 1: agreements as balance trade is great for everyone, it's important
Speaker 1: to note that in our case, as a small to
Speaker 1: medium sized business, tariffs can significantly impact a business like ours.
Speaker 1: Small businesses consumers are going to bear the brunt of
Speaker 1: those costs, and for us, it's also because we can
Speaker 1: only bear so much. So, just like in the supply
Speaker 1: chain crisis, we were able to hold our our own
Speaker 1: and to really stabilize our prices, but at some point
Speaker 1: it's going to have to pass on to the consumer.
Speaker 1: So absolutely, as a company that sources and manufactures our
Speaker 1: own goods and ultimately is in charge of our own
Speaker 1: supply chain, tariffs can hurt small businesses. And the additional
Speaker 1: thing to that to think about is that when you're
Speaker 1: looking at these tariffs and in this particular situation, the
Speaker 1: companies that are going to benefit the most, or the
Speaker 1: companies that are out in the world of counterfeit, they're
Speaker 1: the world of imposter. They're the world of dupes because
Speaker 1: they aren't following any of the same laws or rules
Speaker 1: that we are. Their goods come in usually small parcel
Speaker 1: package overnight and then that's how they are going out
Speaker 1: into the market. And so with companies like ours and
Speaker 1: other companies, these tariffs, if they happen, and there's still
Speaker 1: a lot to be seen, could be very impactful.
Speaker 7: How do you contract those dupes?
Speaker 3: I'm curious because you know, it's not even for sure
Speaker 3: that even big, huge website like Amazon for example, can
Speaker 3: really get rid of all of them.
Speaker 1: Yeah, you know, it's a struggle for Amazon. You know,
Speaker 1: we have an entire team of people internally that work
Speaker 1: tirelessly to get cease and desists letters out and to
Speaker 1: ensure that our ip is protected and that truly the
Speaker 1: real brands that we've spent our life building are the
Speaker 1: ones you see when you search on their platform, and
Speaker 1: they've struggled with this for years. It's definitely something we
Speaker 1: spend hours and hours focused on.
Speaker 6: You know, we've struggled.
Speaker 1: With people landing on our ad words, buying them up,
Speaker 1: and then you can't even find the actual products.
Speaker 6: It's something the industry is going to.
Speaker 9: Have to tackle.
Speaker 1: We're going to have to tackle it head on because
Speaker 1: imposters and dupes, they're dangerous. Many of them are not
Speaker 1: safety tested. Many of them are getting into the hands
Speaker 1: and the homes and families, and it's absolutely bad for
Speaker 1: all of us when that becomes the case.
Speaker 5: I think Bonnie just really wants to know, like who
Speaker 5: owns santam?
Speaker 7: I we do?
Speaker 5: I think like before that, I think this is like
Speaker 5: her quest now, like who owns a Santa?
Speaker 7: For this?
Speaker 5: Hey, Shanda, if we take a look at your partners,
Speaker 5: we just had a nice piece out that showed you know,
Speaker 5: Netflix one of your partners, et cetera. How do you
Speaker 5: guys work with them throughout the year. What are those partnerships?
Speaker 5: How valuable are they to you?
Speaker 1: Yeah, our partners are certainly a big, huge part of
Speaker 1: what we do right. We want to offer the best
Speaker 1: in consumer products, entertainment and experiences for our fans, and
Speaker 1: so relying on these partners, especially Kellogg's McDonald's for example,
Speaker 1: they might offer an experience for families like we offer
Speaker 1: joyful family moments and so getting that toy in a
Speaker 1: happy meal for example in Australia and in the UK
Speaker 1: where that program is live, as well as you know,
Speaker 1: getting your fun little you know Elf on the shelf cereal.
Speaker 6: The kids love that it makes fun Elf ideas.
Speaker 1: So we help families create joyful family moments through these partnerships.
Speaker 1: For example they do scavenger hunts in the mall and
Speaker 1: things like that.
Speaker 6: So these are vital partnerships.
Speaker 1: Clearly, entertainment for any type of property like our own,
Speaker 1: is invaluable. So we have an Elf story as well
Speaker 1: as all three Elf pets that we actually produced in house,
Speaker 1: all streaming on Netflix. So these partnerships are really valuable
Speaker 1: to us. You can't have a global intellectual property and
Speaker 1: not have entertainment for.
Speaker 6: Children to answer all the questions that they ask.
Speaker 1: But it definitely keeps us busy, but we're honored to
Speaker 1: have in this part.
Speaker 3: So I think the elves and the reindeer and Santa
Speaker 3: take off from Finland somewhere tonight around you know, after
Speaker 3: two in the morning, I think, and then we can
Speaker 3: track them, right, And I'm curious then what happens once
Speaker 3: once once Santa is on his way for you guys,
Speaker 3: what's the very next thing that you do after you
Speaker 3: wake up?
Speaker 6: Well, we're hopefully asleep. We're much like the elves.
Speaker 11: We're much like the elves where we're really really tired,
Speaker 11: and we have worked really hard, three hundred and sixty
Speaker 11: five days a year to pull off, you know, the
Speaker 11: Christmas season for our fans.
Speaker 1: So we are exhausted. Our company, our employees are exhausted.
Speaker 1: They have worked full time, just like the elves do
Speaker 1: for Santa Claus. So hopefully everybody get a little bit
Speaker 1: of a break, and then early January we're back at
Speaker 1: it again.
Speaker 7: Did the Elves think alcohol?
Speaker 9: Yeah?
Speaker 6: I do right here.
Speaker 12: So it's Belvedere, So it's going to be a big
Speaker 12: old corporate party then with the l's and yourselves after
Speaker 12: on Christmas Day when we're all I.
Speaker 5: Mean, if you've ever managed a child during Christmas, you
Speaker 5: definitely have cocktails. Thanks a lot, really appreciate. Happy Holidays
Speaker 5: to you. Krista Pits and Shanda Bell, co founders and
Speaker 5: co CEOs of the Loomisteleic Company.
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