WEBVTT - Bloomberg Businessweek Weekend - October 27th, 2023 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Week Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.440 gloom Ole Business Finance and tech news. The Bloomberg Business 0:00:13.440 --> 0:00:18.760 Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.600 --> 0:00:23.360 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Well, 0:00:23.440 --> 0:00:25.960 a lot going on, and this week we found ourselves 0:00:26.000 --> 0:00:29.120 at Schwab Impact twenty twenty three. It's a gathering of 0:00:29.160 --> 0:00:34.239 investment professionals catering to the advisory world in Philadelphia. So 0:00:34.440 --> 0:00:38.000 we were really surrounded by registered investment advisors trying to 0:00:38.040 --> 0:00:41.960 assess today's market environment as geopolitical conflicts in global economic 0:00:42.040 --> 0:00:44.880 uncertainty just seemed to be deepening. It was such a 0:00:44.920 --> 0:00:48.479 great environment to be dropped into with so much going on, 0:00:48.640 --> 0:00:51.400 trying to figure out the way forward for the world broadly, 0:00:51.760 --> 0:00:53.240 but certainly for the investment world. 0:00:53.360 --> 0:00:53.600 Carol. 0:00:53.600 --> 0:00:55.760 It was also the biggest earnings week of the quarter, 0:00:56.120 --> 0:00:58.520 now behind us, as we saw nearly forty percent of 0:00:58.600 --> 0:01:01.160 S and P five hundred companies were And at this 0:01:01.200 --> 0:01:03.160 hour we're going to talk to a pair of CEOs 0:01:03.240 --> 0:01:06.080 about their latest results and what they tell us about 0:01:06.080 --> 0:01:08.560 the health of the American consumer. We're going to talk 0:01:08.600 --> 0:01:10.679 to the heads of Mattel and Whirlpool in just a 0:01:10.680 --> 0:01:11.200 few minutes. 0:01:11.280 --> 0:01:13.200 Before we get there, we do want to start with 0:01:13.200 --> 0:01:15.680 a look at what's going on in Israel, Gaza and 0:01:15.800 --> 0:01:18.520 in Europe as well. The war between Israel and Hamas 0:01:18.600 --> 0:01:20.640 is now into its fourth week, while the war in 0:01:20.760 --> 0:01:24.600 Ukraine is now staggering twenty months old, and our first 0:01:24.600 --> 0:01:27.760 guest helps us understand the historical significance of what is 0:01:27.800 --> 0:01:29.080 playing out overseas. 0:01:29.480 --> 0:01:32.240 Ed Price is a former British trade official who represented 0:01:32.280 --> 0:01:35.240 the UK government to Wall Street, who has also now 0:01:35.240 --> 0:01:38.320 advised members of the European and British parliaments, and who 0:01:38.360 --> 0:01:42.479 now serves as principal for Geopolitical Forecasting at Ergo. It's 0:01:42.520 --> 0:01:45.960 a global intelligence consulting and forecasting firm, and it correctly 0:01:46.000 --> 0:01:49.120 predicted a Russian invasion back in early twenty twenty two. 0:01:49.520 --> 0:01:51.160 We spoke with him Monday from New York. 0:01:51.360 --> 0:01:55.000 I've been thinking about the First World War, and whenever 0:01:55.040 --> 0:01:57.800 you study the First World War, of course you have 0:01:57.840 --> 0:02:01.600 to remember that people were surprised and that the alliances 0:02:01.640 --> 0:02:05.640 that were underpinning the relationships between states were invisible before 0:02:06.320 --> 0:02:10.840 nineteen fourteen, before the conflict began, but then very rapidly 0:02:10.880 --> 0:02:14.200 became clear. And so what I'm thinking about is what 0:02:14.240 --> 0:02:17.760 are the alliances? What are the fault lines between powers? 0:02:18.000 --> 0:02:19.560 And if you go around your mental mapp of the 0:02:19.560 --> 0:02:22.160 Middle East, Israel is in a bit of a pickle. 0:02:22.240 --> 0:02:22.400 Right. 0:02:22.680 --> 0:02:26.520 You've got Oman and Yemen. I don't think that they're friendly. 0:02:26.760 --> 0:02:30.320 You've got Lebanon, You've got Syria, You've got above that Turkey, 0:02:30.360 --> 0:02:32.720 who knows what they'll do in this situation. They don't 0:02:32.760 --> 0:02:35.480 seem like they want to do anything to offend wider 0:02:35.520 --> 0:02:38.160 Muslim opinion. You've got Saudi Arabia now, which of course 0:02:38.200 --> 0:02:40.119 has said that it's not going to do this deal 0:02:40.240 --> 0:02:41.840 or we hear that it might not want to do 0:02:41.880 --> 0:02:45.080 this deal with Israel. And then of course behind everything Iran. 0:02:45.600 --> 0:02:47.440 So what's the question with Iran? I mean, how does 0:02:47.480 --> 0:02:49.040 the US navigate. 0:02:48.680 --> 0:02:52.120 That US has to look at Iran now as essentially 0:02:52.240 --> 0:02:56.440 a franchise of Russia, because the way that the Iranians 0:02:56.639 --> 0:02:59.919 have timed their support for Hamas and who knows also 0:03:00.040 --> 0:03:05.120 possibly his BLA can only be something that benefits Putin 0:03:05.160 --> 0:03:08.280 and the Kremlin and their endeavors in Ukraine. I mean, 0:03:08.600 --> 0:03:11.600 let's look at this rationally, all of our attention has 0:03:11.639 --> 0:03:14.680 shifted away from the European to the theater in the 0:03:14.680 --> 0:03:18.520 Middle East. And whilst I can't prove any collaboration between 0:03:18.639 --> 0:03:21.040 Russia and Iran, I would bet my bottom dollar that 0:03:21.080 --> 0:03:21.600 there is one. 0:03:21.800 --> 0:03:24.600 I want to go to this piece you did in Barns, 0:03:25.480 --> 0:03:27.080 which you've you've touched on some of this, but this 0:03:27.160 --> 0:03:31.959 idea of this democracy trap and talk to us a 0:03:32.000 --> 0:03:35.080 little bit about it, because it sounds like what happens 0:03:35.160 --> 0:03:37.680 is then we kind of really do miss either the 0:03:37.720 --> 0:03:42.680 development of certain strategic alliances, and it can obviously run 0:03:42.720 --> 0:03:45.160 a foul as maybe we're already seeing as it's played 0:03:45.160 --> 0:03:47.200 out in this world, and then maybe the last couple 0:03:47.240 --> 0:03:48.040 of years or so. 0:03:48.040 --> 0:03:50.560 Well, you know me, Carol, I'm always desperately seeking some 0:03:50.600 --> 0:03:56.120 sort of analytical fame and make furtive efforts at catchy 0:03:56.400 --> 0:03:59.000 articles and titles and so on. The democracy trap is 0:03:59.000 --> 0:04:01.560 simply the idea that you're damned if you do and 0:04:01.600 --> 0:04:04.960 you're damned if you don't. When you're a democracy, if 0:04:05.000 --> 0:04:07.800 you do not punish your enemies in a way that 0:04:08.360 --> 0:04:11.360 other empires and other autocracies in the past have shown 0:04:11.360 --> 0:04:14.760 as effective. Then you are, on the one hand, maintaining 0:04:14.800 --> 0:04:18.160 your morality as democracy, but on the other hand, you're 0:04:18.240 --> 0:04:20.239 letting them go. You're letting them get away with things. 0:04:20.360 --> 0:04:23.680 And flip that around. If democracies do go ahead and 0:04:23.880 --> 0:04:28.359 apply firepower to their blood enemies, people turn around, as 0:04:28.400 --> 0:04:30.480 I said before, and say, well, what kind of democracy 0:04:30.520 --> 0:04:32.800 are you if you don't care about human rights? And 0:04:32.839 --> 0:04:36.040 I'm afraid we've now tangled ourselves up, as the West, 0:04:36.040 --> 0:04:39.960 as democracies more generally, into a position. And perhaps this 0:04:40.000 --> 0:04:42.159 is a legacy of the Vietnam War. Perhaps it's a 0:04:42.200 --> 0:04:45.960 legacy of the Afghan Afghanistan War. I don't know, but 0:04:46.080 --> 0:04:49.880 we don't seem willing to really hit our enemies hard. 0:04:50.440 --> 0:04:52.320 Now that's a problem because at some point we're going 0:04:52.360 --> 0:04:56.040 to have to, and very unfortunately, it appears that the 0:04:56.080 --> 0:04:58.159 next time that we're going to have to will be 0:04:58.200 --> 0:05:02.560 her mass Har mass has edit itself in a civilian population. 0:05:03.240 --> 0:05:05.960 Some of those people support Hamas, a lot of them don't, 0:05:06.080 --> 0:05:08.719 and half of them are children. So again let's go 0:05:08.800 --> 0:05:11.760 back to Putin. He would like nothing more than to 0:05:11.800 --> 0:05:16.080 see Israel, the US, the UK and others, whether in 0:05:16.120 --> 0:05:19.640 reality or in perception, doing things that he is doing 0:05:19.680 --> 0:05:21.960 in Ukraine so that he can point to us and 0:05:22.000 --> 0:05:23.039 say there's no difference. 0:05:23.680 --> 0:05:26.000 So here I want to take the step of you 0:05:26.000 --> 0:05:30.400 know some of your past history where you represent represented 0:05:30.480 --> 0:05:34.360 the UK government to Wall Street and the US, and 0:05:34.400 --> 0:05:40.680 I think about ed the tricky relationship of global companies 0:05:41.360 --> 0:05:46.400 to China, to the Middle East, Saudi Arabia. Right, we 0:05:46.480 --> 0:05:50.720 know the atrocities that have happened, and yet we continue 0:05:50.760 --> 0:05:53.760 to do business. And I understand the thinking of well, 0:05:53.760 --> 0:05:56.200 if we're involved, we can help make things better, Okay, 0:05:56.640 --> 0:06:01.000 but that doesn't often happen. So I'm thinking about our 0:06:01.040 --> 0:06:05.120 investment audience who are listening to you, and I'm just thinking, okay, 0:06:05.240 --> 0:06:08.680 So are companies doing what they should be in terms 0:06:08.680 --> 0:06:11.720 of standing up for democracy if we really believe in it? 0:06:12.640 --> 0:06:16.280 Or will they never because they have business interests in 0:06:16.520 --> 0:06:18.680 so many of these difficult regions of the world. 0:06:19.960 --> 0:06:22.160 Well, I don't know if they will or not ever, 0:06:22.400 --> 0:06:26.159 but right now they're not. And sometimes I scratch my 0:06:26.200 --> 0:06:29.080 head in the wee hours when I think about the blood, 0:06:29.080 --> 0:06:32.599 sweat and tears that's gone into ESG and wonder to 0:06:32.640 --> 0:06:35.679 your point, Carol, about where the equivalent is for human 0:06:35.760 --> 0:06:39.200 rights and democracy. I mean human rights and democracy scores, right, 0:06:40.160 --> 0:06:42.960 we have that around the edges. We have a sort 0:06:43.000 --> 0:06:45.560 of center left tradition of protests in some Western countries. 0:06:45.600 --> 0:06:48.800 We have Amnesty International. A lot of business leaders themselves, 0:06:48.920 --> 0:06:51.720 regardless of their politics upright, have integrity and want to 0:06:51.760 --> 0:06:54.719 do the right thing. But we are exposed to countries 0:06:54.720 --> 0:07:00.000 that mistreat their populations. We purchase things that were possible 0:07:00.279 --> 0:07:03.919 made in circumstances that we shouldn't really accept. That's the 0:07:03.920 --> 0:07:07.440 old Nami climb book no logo. But moving on from that, 0:07:07.480 --> 0:07:10.960 we now know about the wigas and other egregious human 0:07:11.040 --> 0:07:13.400 rights issues in the world. So but look, it's very difficult. 0:07:13.440 --> 0:07:16.920 I mean, if we've got, for example, Western financial services 0:07:17.000 --> 0:07:21.360 positively exposed to Chinese growth, if we've got other firms 0:07:21.400 --> 0:07:23.640 in the world, I mean, look at semiconductors that are 0:07:23.760 --> 0:07:25.600 essentially just trying to do business to keep them modern 0:07:25.600 --> 0:07:30.840 economy running. I imagine that they're hoping that the international 0:07:31.080 --> 0:07:34.840 geopolitical outlook will calm down somehow. My fear is that 0:07:34.880 --> 0:07:36.000 it won't, Carol. 0:07:36.400 --> 0:07:39.480 Yeah, I mean I think that's a valid fear given 0:07:39.520 --> 0:07:40.320 what we're seeing, Carol. 0:07:40.400 --> 0:07:41.840 Yeah, it feels like it's just going to get work. 0:07:42.080 --> 0:07:45.280 When you talk about, you know, some similarities from the 0:07:45.320 --> 0:07:48.760 First War World War, like, I just think we're just 0:07:48.760 --> 0:07:49.960 at this very what go ahead to me? 0:07:50.040 --> 0:07:51.440 Well, I was just going to say, and just to 0:07:51.600 --> 0:07:54.960 piggyback on that, Carroll, I mean, it seems like the US. 0:07:55.000 --> 0:07:56.680 You know, some people would argue that the US is 0:07:56.680 --> 0:07:59.920 engaged in a proxy war with Russia. I've heard that, 0:08:01.360 --> 0:08:04.000 and again not necessarily my view, but I've heard that argument, 0:08:04.320 --> 0:08:06.320 and then I would I've heard the argument too, that 0:08:06.400 --> 0:08:09.720 the US is finding itself drawn into this latest conflict 0:08:09.720 --> 0:08:12.600 in the Middle East by actually having a carrier, I 0:08:12.600 --> 0:08:17.720 should say, a military presence there just off the coast, right. 0:08:18.240 --> 0:08:20.920 Right, you are, So maybe we should be talking about Bush, right, 0:08:21.000 --> 0:08:23.960 and both Bush. It's the point because you go for 0:08:23.960 --> 0:08:25.680 War three, maybe just throughround the corner. 0:08:25.760 --> 0:08:27.440 Do you believe that though are you are you being 0:08:27.480 --> 0:08:28.640 facetious or do you believe that. 0:08:29.040 --> 0:08:31.280 I'm not being facetious at all? Now I'm sitting here 0:08:31.320 --> 0:08:33.960 on your radio show. I think that that's absolutely possible. 0:08:34.800 --> 0:08:38.480 I'm very concerned, and you know, you have to be 0:08:38.480 --> 0:08:40.920 careful with these things because like I said in these articles, 0:08:41.000 --> 0:08:45.720 if you're someone who worries, then you're going to get 0:08:45.800 --> 0:08:49.160 accused of crying wolf, and rightly so if you know, 0:08:49.280 --> 0:08:51.360 if things don't go the way that they look, they 0:08:51.440 --> 0:08:55.000 might be going. But let's play it out quickly. You know, 0:08:55.120 --> 0:08:58.800 Israel goes into Gaza, Hisbrala thrusts into the North. There's 0:08:58.800 --> 0:09:01.760 a second, third, four whatever anti fighter it is in 0:09:01.760 --> 0:09:04.880 the West Bank. At the same time, Iran decides, now's 0:09:04.880 --> 0:09:08.360 a good time for some sort of global activation of 0:09:08.400 --> 0:09:12.239 any terror networks they have. Bob's your uncle, right Immediately, 0:09:12.320 --> 0:09:15.160 you've got to get the only real cop in town, 0:09:15.720 --> 0:09:17.599 the only real cop in the world, which is the 0:09:17.679 --> 0:09:20.080 United States involved somehow in the Middle East. Now again, 0:09:20.120 --> 0:09:23.080 if I was an adversary of the United States, I'd 0:09:23.120 --> 0:09:24.400 be thinking, well, all I need to do is a 0:09:24.400 --> 0:09:27.120 third one someplace, and you know I can go and 0:09:27.120 --> 0:09:27.760 take Taiwan. 0:09:27.920 --> 0:09:31.520 That was that Bracey's principle of geopolitical forecasting at ERGO. 0:09:31.440 --> 0:09:33.360 As we mentioned and as you can probably hear from 0:09:33.400 --> 0:09:36.120 the background. This week we broadcast from the Schwab Impact 0:09:36.160 --> 0:09:39.959 twenty twenty three conference in Philadelphia. Coming up, investors juggling 0:09:40.000 --> 0:09:43.199 geo politics with earnings this week, and on that front, 0:09:43.280 --> 0:09:46.280 we talk quarterly results with the CEO of Mattel Inon Crist, 0:09:46.559 --> 0:09:49.040 who also had some thoughts about his native Israel. 0:09:49.280 --> 0:09:52.319 You're listening to Bloomberg Business Week. This is Bloomberg. 0:09:52.720 --> 0:09:56.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:56.320 --> 0:09:59.640 live weekday afternoons from three to six Eastern Listen on 0:09:59.640 --> 0:10:03.760 bloom dot com, the iHeartRadio app, and the Bloomberg Business app, 0:10:04.040 --> 0:10:06.360 or wants us live on YouTube? 0:10:07.000 --> 0:10:10.960 All right, everybody, as promised, we do have the Mattel's CEO, 0:10:11.080 --> 0:10:14.120 in On Christ, joining us from El Segundo, California. On 0:10:14.200 --> 0:10:18.079 zoom in On, Let's get Barbie because I bet she 0:10:18.120 --> 0:10:21.839 could fix zoom, don't you think so? How are you 0:10:21.880 --> 0:10:22.200 all right? 0:10:22.280 --> 0:10:24.280 Carol's great to be with you. 0:10:25.000 --> 0:10:26.880 It's so great to be with you. I feel like 0:10:26.920 --> 0:10:28.840 I have a million questions. I feel like I want 0:10:28.840 --> 0:10:30.000 to go to a bar, I have a drink with 0:10:30.040 --> 0:10:32.720 you and just sit and talk. I want to start 0:10:32.720 --> 0:10:38.280 with the Israel Hamas conflict. You're born in Israel, studied 0:10:38.280 --> 0:10:41.400 at Tel Aviv University before heading to the West Coast 0:10:41.440 --> 0:10:44.920 of the United States of America. I hope your family 0:10:44.960 --> 0:10:47.679 and friends are safe. I pray that they are safe. 0:10:48.600 --> 0:10:50.360 How are you thinking about all of this right now 0:10:50.400 --> 0:10:53.080 in this conflict? And is there a way to peace 0:10:53.240 --> 0:10:53.920 in that region? 0:10:55.040 --> 0:11:00.239 Yeah, thank you for asking my family. My family is okay. 0:11:00.679 --> 0:11:03.600 My immediate family is okay. But and you know of 0:11:03.600 --> 0:11:07.240 courses in Israeli. This is very personal to me and 0:11:07.280 --> 0:11:10.600 I know too many people who lost loved ones or 0:11:10.679 --> 0:11:13.760 have relatives that have been kidnapped and are now being 0:11:13.800 --> 0:11:18.280 held hostage in Gaza. You know, on behalf of Mattel, 0:11:18.720 --> 0:11:23.720 we condemn the terrorism and atrocities perpetrated by Hamas and 0:11:23.800 --> 0:11:28.079 stand against hate and violence in all forms. We express 0:11:28.200 --> 0:11:32.400 hope for the safety of Israelis and Palestinian children and 0:11:32.480 --> 0:11:37.600 families part in the Israeli Hamas war. As a company. 0:11:37.679 --> 0:11:41.840 Since the Hamas attacks on October seventh, the Mattel Children's 0:11:41.880 --> 0:11:45.640 Foundation has been focused on who many arian work, including 0:11:45.720 --> 0:11:49.720 cash and toy donations with shelters and hospitals who support 0:11:49.800 --> 0:11:54.520 children who are suffering. And we're sitting here all wishing 0:11:54.679 --> 0:11:58.360 for a swift resolution to the war and more peaceful 0:11:58.400 --> 0:11:59.960 times in the future. 0:12:02.400 --> 0:12:05.160 Well, you know, and it's something that you know, people 0:12:05.160 --> 0:12:09.040 who are wow, gosh I mean up to eighty years 0:12:09.040 --> 0:12:11.160 old at this point have dealt with their entire lives 0:12:11.320 --> 0:12:14.480 in that area of the world. And I'm wondering to 0:12:15.120 --> 0:12:17.160 you and not speaking on behalf of Mattel, but just 0:12:17.280 --> 0:12:20.400 getting your thoughts personally, how this ends, if a two 0:12:20.400 --> 0:12:22.760 state outcome is the only solution to ending the conflict 0:12:22.760 --> 0:12:23.600 there once and for all. 0:12:25.559 --> 0:12:32.000 You know, it's a complicated conflict, and we're now sitting 0:12:32.000 --> 0:12:36.040 at a time that is very volatile. We see risk 0:12:36.120 --> 0:12:40.800 of escalation and we just hope for a swift, swift 0:12:40.840 --> 0:12:45.920 resolution and wishing peace for everybody as soon as we can. 0:12:47.840 --> 0:12:49.559 I want to talk about Mattel. I have one more 0:12:49.640 --> 0:12:52.280 questions for you. Do you think Prime Minister Benjamin Netanyah, 0:12:52.360 --> 0:12:55.280 who is not going to be the leader that brings 0:12:55.360 --> 0:12:56.040 lasting peace. 0:12:58.000 --> 0:13:01.240 And this is not the time to get into the 0:13:01.280 --> 0:13:06.199 political discussion right now. Everyone is focused on resolving the situation. 0:13:07.480 --> 0:13:14.000 Israel articulated its priorities. We're all really looking forward for 0:13:14.040 --> 0:13:19.080 the release of the hostages. There are thirty children under 0:13:19.080 --> 0:13:22.000 the edge of sixteen that are being held a captive 0:13:22.080 --> 0:13:26.360 right now, about half the hostages of women, and we 0:13:26.480 --> 0:13:29.120 really believe that this should be resolved as soon as possible, 0:13:29.240 --> 0:13:32.640 and we pray for the release, safety and release of 0:13:32.720 --> 0:13:36.920 all the hostages that are now being held captives. 0:13:39.080 --> 0:13:42.040 You are absolutely right, but we do appreciate you weighing 0:13:42.040 --> 0:13:44.000 in on this because we have talked to you about 0:13:44.160 --> 0:13:48.120 serious issues in the past, so really appreciate this. No 0:13:48.200 --> 0:13:50.200 easy segue, but I do want to talk about the 0:13:50.240 --> 0:13:54.520 business of Mattel. Talk to us about last quarter and 0:13:54.559 --> 0:13:58.160 the outlook. It was a tough day in the equity 0:13:58.200 --> 0:14:02.480 market for you guys. You did talk about tougher industry conditions. 0:14:02.520 --> 0:14:05.400 What are those tougher industry conditions that you guys are 0:14:05.400 --> 0:14:06.000 worried about? 0:14:07.600 --> 0:14:12.640 Or we did see the industry being shot in the 0:14:12.720 --> 0:14:15.240 third quarter and year to date, and as a result, 0:14:15.320 --> 0:14:19.680 we adjusted our expectations and expect and believe the industry 0:14:19.720 --> 0:14:22.680 will decline midst in a digit for the full year. 0:14:23.240 --> 0:14:27.120 But don't you need to remember that this is after 0:14:27.160 --> 0:14:31.920 the industry was up twenty two percent from twenty nineteen 0:14:32.000 --> 0:14:35.800 to twenty twenty two, reaching an all time high. So 0:14:36.120 --> 0:14:40.320 coming off after such a strong increase, especially in a 0:14:40.400 --> 0:14:45.840 challenging microeconomic environment, we believe that this is a reasonable 0:14:46.560 --> 0:14:51.280 situation and doesn't reflect on the strength and resilience of 0:14:51.320 --> 0:14:53.960 the industry long term. This to industry has been growing 0:14:54.040 --> 0:14:57.600 for over ten years and it's a growth category. So 0:14:57.640 --> 0:15:01.080 we feel very good about the industry needs to growth process, 0:15:01.360 --> 0:15:05.680 and even in that environment, even in a softer market, 0:15:06.080 --> 0:15:12.040 Mattel performed very strongly. Our quarter exceeded, our quarterly results 0:15:12.080 --> 0:15:19.080 exceeded expectations. We showed manyful sales boat margin expansion with 0:15:19.320 --> 0:15:24.600 very strong free cash intercourse, we saw consumer dement increasing 0:15:24.720 --> 0:15:27.840 and we continue to outfress the industry. 0:15:28.720 --> 0:15:30.920 I think a lot of investors today, at least sending 0:15:30.960 --> 0:15:34.680 shares down about seven percent, were concerned that you guys 0:15:34.720 --> 0:15:37.640 maintained your full year sales outlook despite all of the 0:15:37.680 --> 0:15:41.200 success of the Barbie movie. So what would have to 0:15:41.240 --> 0:15:43.760 happen inon to bring in more than the one hundred 0:15:43.800 --> 0:15:46.480 and twenty five million dollars expected from the Barbie movie 0:15:46.680 --> 0:15:49.240 and related products? What needs to happen at MATEL or 0:15:49.240 --> 0:15:51.440 in the industry for that to happen or for the consumer? 0:15:51.440 --> 0:15:57.120 I should say, well, while we maintain the top line expectations, 0:15:57.560 --> 0:16:02.120 we increased our outpook for a gross margin for our 0:16:02.160 --> 0:16:05.760 EPs and EBIDA and still expect a very strong free 0:16:05.800 --> 0:16:09.880 cash flows to float through. What the change is that 0:16:10.040 --> 0:16:12.440 relative to our initial expectation at the start of the 0:16:12.520 --> 0:16:16.080 year is that the industry we believe will now decline 0:16:17.080 --> 0:16:21.280 amidst of the digits, but the fundamentals are strong. We 0:16:21.360 --> 0:16:24.280 do expect an accelerated growth rate in the fourth quarter 0:16:24.920 --> 0:16:29.000 and significant expansion and growth margin compared to the prior year, 0:16:29.640 --> 0:16:34.320 and for consumer demands to be positive for Mattel in 0:16:34.600 --> 0:16:37.120 the holiday season, in the fourth quarter. 0:16:37.080 --> 0:16:37.800 And the full year. 0:16:38.640 --> 0:16:42.840 So we are performing strongly. We're heading into the fourth 0:16:42.920 --> 0:16:48.960 quarter seeing stronger support from retailer, more shelf space, more 0:16:49.000 --> 0:16:55.680 representation in major holiday catalogs, and overall a strong position 0:16:55.760 --> 0:17:00.800 with a very broad based offering, a product across pay patterns, 0:17:00.840 --> 0:17:05.160 fresh points, and we believe we're very well positioned competitiors. 0:17:06.920 --> 0:17:09.800 So just to follow up there, the one hundred and 0:17:09.800 --> 0:17:12.800 twenty five million that you put out there, the estimate 0:17:13.000 --> 0:17:16.280 from the Barbie movie and related products, would you say 0:17:16.280 --> 0:17:17.919 it might be even conservative. 0:17:17.359 --> 0:17:17.800 A little bit? 0:17:17.840 --> 0:17:22.480 You know, Well, we did say it's at least one 0:17:22.560 --> 0:17:26.280 hundred and twenty five million dollars revenue at sixty percent 0:17:26.640 --> 0:17:32.919 operating income margin. But the takeaway from this is that 0:17:33.040 --> 0:17:37.280 this is one movie in one year, and as we 0:17:37.400 --> 0:17:43.399 continue to scale our strategy and have more movies, more executions, 0:17:43.480 --> 0:17:46.600 and not just in film, but also in television, in 0:17:46.720 --> 0:17:51.600 location based entertainment, them parts, consumer products, digital experiences, music, 0:17:53.000 --> 0:17:56.480 and other verticals in some cases that are actually bigger 0:17:56.960 --> 0:18:00.720 than the toy industry. We believe that we have opportunity 0:18:00.800 --> 0:18:05.359 to capture significant value from our franchises. And we're not 0:18:05.400 --> 0:18:08.760 saying that everything. So let's go there A successful as Barbie, yeah, 0:18:09.000 --> 0:18:12.679 but we absolutely believe that in the aggregate there's a 0:18:12.720 --> 0:18:14.760 meaningful opportunity for us. 0:18:15.680 --> 0:18:17.679 Well let's go there. And I've got to say, you know, 0:18:17.720 --> 0:18:19.399 I remember when we started talking to you or you 0:18:19.520 --> 0:18:21.720 was it the early days of the Barbie movie or 0:18:21.760 --> 0:18:23.520 you started filming. So it was kind of fun to 0:18:23.560 --> 0:18:25.520 be along for that process. But it was a movie 0:18:25.520 --> 0:18:27.400 that made us laugh, made us cry, and like I said, 0:18:27.440 --> 0:18:30.399 it appealed to a lot of different ages, which was 0:18:30.440 --> 0:18:34.040 pretty pretty wild. So what are the key brands that 0:18:34.119 --> 0:18:38.280 you think have life beyond a kid's toy chest and 0:18:38.280 --> 0:18:41.439 that you think we should be all kind of waiting for. 0:18:41.560 --> 0:18:43.439 I don't know whether it's six months, twelve months, the 0:18:43.480 --> 0:18:45.040 next couple of years that are going to be brought 0:18:45.040 --> 0:18:46.359 to life in different ways. 0:18:47.520 --> 0:18:51.359 Well. The division of Mattel's Films is to collaborate with 0:18:51.480 --> 0:18:55.720 leading filmmakers to create stand out quarterly movies based on 0:18:55.760 --> 0:18:59.439 our iconic brand that will resonate in culture and appeal 0:18:59.480 --> 0:19:02.720 to global audience. And the Barbie movie and I'm glad 0:19:02.800 --> 0:19:05.560 you you you enjoyed it as much as you did, 0:19:06.680 --> 0:19:09.880 is a clear show dead and. 0:19:09.800 --> 0:19:11.439 We have brought me back to the theater for the 0:19:11.480 --> 0:19:12.040 first time. 0:19:14.359 --> 0:19:17.520 I'd love to hear that. And we have fourteen other 0:19:17.680 --> 0:19:22.840 movies in development right now, different demographics, different genres. We 0:19:23.000 --> 0:19:26.760 have Hot Wheels in development with j. J. Abrams as 0:19:26.840 --> 0:19:32.360 Warner Brothers, Matchbox in development with sky Dams, which, as 0:19:32.400 --> 0:19:38.200 you know, produced the Mission Impossible movie that did very well, 0:19:38.760 --> 0:19:42.000 and Topdan We have a movie in development with Vin 0:19:42.040 --> 0:19:46.480 Diesel around Rocking Stock and Robots, Uh, Polly Pocket with 0:19:46.600 --> 0:19:52.440 Lena Danham and Lily Collins. We have Wishbone in development 0:19:52.520 --> 0:19:56.560 with Pitt Farley major Matt Mason with Tom Hanks as 0:19:56.840 --> 0:20:00.920 a star, Thomas the Tank with Mark four there as director, 0:20:01.560 --> 0:20:04.960 and the list goes on and on. So we really. 0:20:04.680 --> 0:20:06.840 Well, you know, it's very good that you're so close 0:20:06.880 --> 0:20:09.679 to Hollywood out there. Yeah, it's good that you're so 0:20:09.680 --> 0:20:12.120 close to Hollywood out there. Nel Segundo. Hey, we only 0:20:12.119 --> 0:20:14.240 have about thirty seconds left. I'd love to hear comments 0:20:14.240 --> 0:20:16.280 on the consumer going into the holiday season. Are you 0:20:16.280 --> 0:20:17.800 seeing signs of weakness in the consumer. 0:20:19.119 --> 0:20:23.439 Well, we expect the strong holiday season for Mattel. We 0:20:23.520 --> 0:20:26.359 believe our retail partners and the industry as a whole 0:20:26.480 --> 0:20:30.280 is well prepared for this season, and we're very excited 0:20:30.320 --> 0:20:33.520 to be able to cater consumers of all ages with 0:20:33.680 --> 0:20:35.920 a great product for in the holiday. 0:20:37.640 --> 0:20:39.000 I'm going to get yelled at, but I'm going to 0:20:39.080 --> 0:20:42.119 ask twenty seconds, what's the hot toy for Christmas and 0:20:42.160 --> 0:20:45.120 the holidays and for Hanukah? What is the hot toy? 0:20:46.000 --> 0:20:51.040 Well, anything Barbie is a hot toy, especially even before 0:20:51.040 --> 0:20:55.320 the holiday. For the spirit Halloween Barbie costume, watch out 0:20:55.359 --> 0:20:58.399 for that. But of course the hot Wheels is always 0:20:58.400 --> 0:21:02.520 the winner. The basic car assortment and the five car 0:21:03.240 --> 0:21:06.560 pack assortment, and look out for the Monster High four 0:21:06.640 --> 0:21:10.600 Daughter assortment, and you know that will it will be 0:21:10.960 --> 0:21:15.000 very will be hot selling toys for the holiday season. 0:21:15.560 --> 0:21:19.520 God, you're speaking my language. I love Uno and I 0:21:19.560 --> 0:21:23.159 love Barbie in on christ Thank you so much. Truly, 0:21:23.359 --> 0:21:25.359 your friends and your family are on our minds and 0:21:25.800 --> 0:21:27.240 our thoughts. Cheering see have Mittel. 0:21:31.880 --> 0:21:35.439 You're listening to the Bloomberg Business Week podcast. Catch us 0:21:35.480 --> 0:21:39.600 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:21:39.720 --> 0:21:42.960 the Bloomberg Business app and YouTube. You can also listen 0:21:43.080 --> 0:21:46.200 live on Amazon Alexa from our flagship New York station 0:21:46.640 --> 0:21:59.359 Just Say Alexa, playing Bloomberg eleven thirty. 0:21:55.040 --> 0:21:58.399 World Fool and on the last seventy five years becoming 0:21:58.480 --> 0:22:09.360 laundry experts. No, that make it easy for everybody, all. 0:22:09.359 --> 0:22:12.159 Right, who doesn't have a vintage commercial a whirlpool, of course, 0:22:12.280 --> 0:22:14.040 and they are front and center today we're watching the 0:22:14.080 --> 0:22:17.200 share price down about fourteen percent here. What we love 0:22:17.240 --> 0:22:19.760 about these kinds of companies is they can tell us 0:22:19.760 --> 0:22:22.520 so much about what's going on, certainly in the minds 0:22:22.560 --> 0:22:24.280 of the US consumer and what's going on in the 0:22:24.400 --> 0:22:28.040 US economy. And this is a great conversation, especially tim 0:22:28.080 --> 0:22:29.119 if you think about it. On a day where we 0:22:29.200 --> 0:22:31.280 got GDP, we expected it to be hot, and it 0:22:31.320 --> 0:22:32.600 came in even hotter than expected. 0:22:32.720 --> 0:22:35.480 In fact, Dreasury Secretary Jenny Yellen just in the last 0:22:35.480 --> 0:22:38.600 couple of hours telling Bloomberg exclusively that the surge that 0:22:38.600 --> 0:22:40.919 we're seeing in longer term bond yields in recent months, 0:22:41.119 --> 0:22:44.159