Speaker 1: You're listening to stock on Bloomberg Radio. More than twenty
Speaker 1: hundred flights have been canceled between today and Friday this
Speaker 1: as of the year early morning. This all according to
Speaker 1: flight aware dot com. This includes more than flights today
Speaker 1: in twelve hundred tomorrow. This because of Hurricane Matthew bearing
Speaker 1: down on the southeastern United States. Also many closures of stores,
Speaker 1: government offices, tourist attractions all being closed because of the hurricane.
Speaker 1: Here to tell us more about the effect of such
Speaker 1: a natural disaster on consumers and consumers spending and local
Speaker 1: economies is Sema Shaw are consumer consumer discretionary analysts for
Speaker 1: Bloomberg Intelligence. Seema, thank you very much for coming in,
Speaker 1: and of course, it is a very serious and dangerous
Speaker 1: situation currently taking place, not only in Florida and the
Speaker 1: coastal regions of the It States Eastern seaboard, but also
Speaker 1: the we noted the Bahamas and also Haiti was devastating
Speaker 1: lee target hit by the hurricane. Tell us your thoughts
Speaker 1: on on what this is doing right now to the
Speaker 1: economies um for retailers specifically, it depends on really what
Speaker 1: category and discretionary you are and how you'll be affected.
Speaker 1: So The beneficiary is, if there is anyone, would be
Speaker 1: the home centers, the home depots or lows. Prior to
Speaker 1: a storm, people tend to stock up on generators, im
Speaker 1: plywood to prepare their homes than themselves for the upcoming storm.
Speaker 1: Another beneficiary maybe the grocers as people stock up on
Speaker 1: necessities and consumables after the storm. Depending on the extent
Speaker 1: of the damage, there could be a benefit to home
Speaker 1: depot and lows into Q four and even into two
Speaker 1: thousand seventeen, which is sort of what they saw after Sandy.
Speaker 1: They saw a boost to Q four comps and then
Speaker 1: again in the first half of two thousand thirteen. At
Speaker 1: that time they saw a boost to sales as people
Speaker 1: continued to rebuild um But the storm is hitting. It
Speaker 1: looks like it's expected to hit on over the weekend,
Speaker 1: which will hurt likely hurt discretionary retailer. So those selling
Speaker 1: things that maybe you were just doing for fun, mall
Speaker 1: based retailer's department stores someone like a G n C
Speaker 1: or an altar, you know, specialty apparel, because you probably
Speaker 1: would stay home. So when analysts look at the numbers,
Speaker 1: will they just automatically discount of home depot sales, for examples,
Speaker 1: suddenly look really great. Will they say, well, but you
Speaker 1: know the the hurricane, people bought stuff before and after
Speaker 1: if somebody's sales are suddenly down, will they be very
Speaker 1: quick to say, oh, you know, we have a lot
Speaker 1: of stores in the path of the hurricane, and soone
Speaker 1: discounts it right. Well, Usually what will happen is during
Speaker 1: the conference call, the companies will either break it out
Speaker 1: and say that they estimate X number of basis points
Speaker 1: benefit or compression from the event, and analysts usually back
Speaker 1: it out or just for it and the next year
Speaker 1: when they look at comparables, just to make it a
Speaker 1: like for like basis. And just to note that both
Speaker 1: Lows and Home Depot have activated what they described as
Speaker 1: their hurricane center, right, and that's to activate their supply
Speaker 1: chains and to get necessary items down their batteries, flashlights,
Speaker 1: other things that people might need in a disaster, so
Speaker 1: they have greater supply and their stores. Both companies, all
Speaker 1: their stores are have backup generators, so they will stay
Speaker 1: in the store and remain open as long as it's say,
Speaker 1: for their employees and if they're restocking or getting any
Speaker 1: kind of shipments. Presumably this is that part of it, well,
Speaker 1: it is fairly short lived. In other words, if FedEx
Speaker 1: can't fly stuff around for them, they have a distribution center,
Speaker 1: so they'll probably already will prepare. There's a lot of
Speaker 1: this stuff is in stock for them for the most part,
Speaker 1: and I'm sure in the days prior when they saw
Speaker 1: I was coming. So I will just mention that the
Speaker 1: home depot in South Dixie Highway in Miami is already closed,
Speaker 1: so they may have rolling closures of a lot of
Speaker 1: these right, depending on things. Well, of course, it seems
Speaker 1: like the uh state of Florida has been very I mean,
Speaker 1: the President was warning people. Everyone's saying, take this seriously.
Speaker 1: Uh yeah, And I think that's probably a result of
Speaker 1: what's happened in prior disasters. Repeat will stay and then
Speaker 1: you have the first responders who end up putting themselves
Speaker 1: in danger. So I think this is just you know,
Speaker 1: it's better safe to be sorry and better to be prepared.
Speaker 1: So retailers that can help customers are going to try.
Speaker 1: And the other one, I mean, maybe they'll get a
Speaker 1: little bit of a hit, but as long as there's
Speaker 1: no permanent damage to their structures, they're probably be okay. Well,
Speaker 1: we of course we are thoughts with everybody in Florida
Speaker 1: and hope it maybe decides to go back east out
Speaker 1: to see Sema Sea. Thank you so very much. Consumer
Speaker 1: discretion analysts for Bloomberg Intelligence breaking down how the hurricane
Speaker 1: could have thanked the big real retailers along the East
Speaker 1: Coast