WEBVTT - BI Weekend: US Earnings, Disney’s Succession 0:00:02.960 --> 0:00:12.600 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Intelligence 0:00:12.680 --> 0:00:14.400 with Alex Steel and Paul Sweeney. 0:00:14.520 --> 0:00:17.760 The real app performance has been the US corporate high yield. 0:00:17.920 --> 0:00:20.280 Are the companies lean enough? Have they trimmed all the fats? 0:00:20.320 --> 0:00:24.080 The semiconductor business is a really cyclical business. 0:00:23.640 --> 0:00:27.200 Breaking market headlines and corporate news from across the globe. 0:00:27.280 --> 0:00:29.920 Do investors like the M and A that we've seen? 0:00:30.120 --> 0:00:31.040 These are two. 0:00:31.040 --> 0:00:33.159 Big time blue chip companies. 0:00:33.320 --> 0:00:36.880 The window between the peak and cut changing super fast. 0:00:37.120 --> 0:00:42.000 Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio. 0:00:42.920 --> 0:00:45.440 I'm Paul Sweeney and I'm normal Linda filling in for 0:00:45.479 --> 0:00:46.040 Alex Steele. 0:00:46.320 --> 0:00:48.720 Today's Bloomberg Intelligence Show we dig inside the big business 0:00:48.720 --> 0:00:50.680 stories from PACTE, Wall Street and the global markets. 0:00:50.760 --> 0:00:53.040 Each and every week we provide in depth research and 0:00:53.120 --> 0:00:55.360 data on some of the two thousand companies and one 0:00:55.440 --> 0:00:58.120 hundred and thirty industries are analysts covered worldwide. 0:00:58.280 --> 0:01:00.560 Today, we'll look at why the coffee giants Bucks has 0:01:00.560 --> 0:01:03.120 withdrawn its guidance for twenty twenty five plus. 0:01:03.200 --> 0:01:06.000 We'll dive into the telecommunication space and look at earnings 0:01:06.000 --> 0:01:06.640 from AT and T. 0:01:06.959 --> 0:01:09.400 But first we look at earnings from the shipping giant UPS. 0:01:09.680 --> 0:01:11.959 This week, the company reported that it returned to sales 0:01:11.959 --> 0:01:14.679 and profit growth for the first time in nearly two years. 0:01:14.959 --> 0:01:18.600 UPS benefited from higher volumes, more profitable packages, and studying 0:01:18.640 --> 0:01:19.840 labor costs for more. 0:01:19.959 --> 0:01:22.640 Nora and I were joined by Lee Klascow, Bloomberg Intelligence 0:01:22.640 --> 0:01:24.759 Senior Transport, Logistics and shipping analysts. 0:01:24.760 --> 0:01:27.319 We first asked Lee for his take on UPS's most 0:01:27.360 --> 0:01:28.119 recent quarter. 0:01:28.520 --> 0:01:30.839 Yeah, so UPS had a pretty good print. May also, 0:01:31.120 --> 0:01:33.560 you know, indicated that earnings might be a little better 0:01:33.600 --> 0:01:36.400 than expectations are in the fourth quarter. UPS has been 0:01:36.480 --> 0:01:38.160 kind of a show me story. They've been doing a 0:01:38.200 --> 0:01:41.080 lot of self help things, but a lot of those 0:01:41.319 --> 0:01:45.640 initiatives really haven't bubbled up to the bottom line or 0:01:45.680 --> 0:01:49.320 the revenue numbers, just given the difficult backdrop. And what 0:01:49.360 --> 0:01:52.320 we saw was earnings per share for growth finally inflected 0:01:52.360 --> 0:01:57.480 positively after seven quarterly declines. So things seem to be 0:01:57.560 --> 0:02:01.800 working for UPS, and you know, we expect earnings expectations 0:02:01.840 --> 0:02:04.280 for the fourth quarter and probably next year to move 0:02:04.760 --> 0:02:07.360 higher on kind of the progress that they've made thus far. 0:02:07.600 --> 0:02:10.079 Hayley, I mean, you mentioned that difficult backdrop as we're 0:02:10.080 --> 0:02:12.080 thinking about the future. I mean, how much of a 0:02:12.160 --> 0:02:15.119 move higher do you really anticipate as we're thinking about 0:02:15.160 --> 0:02:17.399 the year end, should investors start to see some gains here? 0:02:17.680 --> 0:02:20.919 Well, we don't do buy hoole sell recommendations of Bloomberg Intelligence, 0:02:20.960 --> 0:02:22.880 but you know, what we can tell you is that 0:02:23.160 --> 0:02:25.760 the company are doing the right things to see their 0:02:25.800 --> 0:02:29.359 margins expand. And you know, our view is that margin 0:02:29.440 --> 0:02:34.160 expansion could be more than where where the market currently 0:02:34.320 --> 0:02:35.960 is at. And a lot of that has to do 0:02:36.000 --> 0:02:37.560 with a lot of the cost savings that they've been 0:02:37.600 --> 0:02:40.960 able to generate. They've been able to you know, shut 0:02:41.000 --> 0:02:46.280 down various shifts, sorting shifts, They've been able to close 0:02:46.960 --> 0:02:51.080 some facilities and just do more with the network that 0:02:51.120 --> 0:02:54.800 they have. That and if you fast forward that, you know, 0:02:54.880 --> 0:02:58.320 maybe you know, volumes could start to improve a little 0:02:58.320 --> 0:03:01.440 more meaningfully from here. You know, they expect a better 0:03:01.480 --> 0:03:05.600 peak season this year, albeit probably not as robust as 0:03:05.639 --> 0:03:08.680 they were probably planning for three months ago, but the 0:03:08.720 --> 0:03:12.680 peak season is expected to grow. And the reason for 0:03:13.000 --> 0:03:15.800 you know, them tempering the outlook for the peak season 0:03:16.320 --> 0:03:18.920 is given the fact that the peak season is condensed 0:03:19.600 --> 0:03:21.440 the peak season for those that don't know is from 0:03:21.480 --> 0:03:25.399 Black Friday to Christmas Eve and because of that condensed 0:03:25.440 --> 0:03:28.560 peaks time. You know, a lot of retailers think that 0:03:29.120 --> 0:03:33.600 some consumers might be going to the stores versus ordering 0:03:33.720 --> 0:03:36.760 online and making that gamble whether or not you get 0:03:36.760 --> 0:03:37.880 it under the tree in time. 0:03:38.840 --> 0:03:39.160 Hay Lee. 0:03:39.600 --> 0:03:41.800 We love talking to you for a variety of reasons, 0:03:41.840 --> 0:03:43.320 not the least of which is the companies you covered 0:03:43.360 --> 0:03:45.000 lead give us a real sense of how the underlying 0:03:45.000 --> 0:03:47.680 economy is doing, whether it's stuff's being shipped by rail 0:03:47.800 --> 0:03:52.920 or truck or air cargo. What's GPS telling you about 0:03:53.000 --> 0:03:55.880 kind of underlying activity that they're seeing. 0:03:56.720 --> 0:04:00.320 Well, first and foremost, I love talking to you as well, Paul, 0:04:00.400 --> 0:04:02.440 But you know what I think they're telling us is 0:04:02.480 --> 0:04:06.480 the consumer is doing okay. You know, it's not doom 0:04:06.520 --> 0:04:10.320 and gloom going into the holiday season. I think that 0:04:10.360 --> 0:04:12.600 you know, you are going to see growth. Like I 0:04:12.600 --> 0:04:15.000 said earlier, that growth might be a little more tempered, 0:04:15.240 --> 0:04:18.159 but you know, we are seeing a return to kind 0:04:18.160 --> 0:04:22.080 of seasonality, which is really good because it's not just 0:04:22.120 --> 0:04:24.920 going to impact the parcel providers. It's going to impact 0:04:24.960 --> 0:04:27.880 the truckload providers, you know, like the night swifts and 0:04:27.920 --> 0:04:29.719 the warners of the world. It's going to impact the 0:04:29.720 --> 0:04:32.320 intermodal providers like the JB Hunts and the hub groups 0:04:32.320 --> 0:04:35.120 of the world, and the railroads as well. So, you 0:04:35.120 --> 0:04:37.960 know what we're hearing about the consumer and the fact 0:04:38.000 --> 0:04:41.880 that B to B volume grew for the first time 0:04:41.920 --> 0:04:45.080 in a long time within their domestic business is also 0:04:45.200 --> 0:04:48.839 telling me, you know, that that things might be might 0:04:48.880 --> 0:04:52.479 be a little better in twenty twenty five. So you know, 0:04:52.480 --> 0:04:57.080 we're pretty optimistic that demand should be increasing across most 0:04:57.120 --> 0:04:59.479 of the modes that we cover, and you know, twenty 0:04:59.480 --> 0:05:01.520 twenty five and our view was going to be a 0:05:01.600 --> 0:05:03.680 much better year than twenty twenty four was. 0:05:04.520 --> 0:05:07.200 And I do know back in about April, I remember 0:05:07.200 --> 0:05:12.080 that UPS became USPS's primary air cargo provider. Is that 0:05:12.120 --> 0:05:14.360 still a topic of conversation. How much has that really 0:05:14.400 --> 0:05:16.600 added to the business if at all? 0:05:16.880 --> 0:05:19.560 Yeah, So it is a great business win for them. 0:05:19.640 --> 0:05:22.680 You know, FedEx walked away from it for various reasons 0:05:22.760 --> 0:05:25.359 and UPS decided to pick it up. It's going to 0:05:25.400 --> 0:05:29.960 be consistent volumes at a consistently good margin. And you 0:05:30.000 --> 0:05:32.760 know what they're doing is they're really restructuring their overall 0:05:32.800 --> 0:05:35.200 business they've been getting out of businesses that are a 0:05:35.200 --> 0:05:38.839 lot more volatile. They just sold their freight brokerach business, 0:05:39.240 --> 0:05:43.159 which was called Coyote to RXO, and then that was 0:05:43.279 --> 0:05:47.040 earlier last month, and then in twenty twenty one they 0:05:47.080 --> 0:05:51.000 sold their less than truckload business UPS Freight to TFI 0:05:51.320 --> 0:05:54.960 and those were not great businesses for UPS. And now 0:05:55.080 --> 0:05:58.520 UPS can really focus on being a parcel provider. And 0:05:58.680 --> 0:06:01.600 to answer your question, what the US postal service business 0:06:01.600 --> 0:06:04.440 can also do, It's going to build density and density 0:06:04.520 --> 0:06:07.520 is the name of the game in any transportation company, 0:06:07.720 --> 0:06:11.200 and so they can build off that density with other volumes. 0:06:11.440 --> 0:06:14.680 Our thanks to Lee Klasgow, Bloomberg Intelligence Senior Transport, Logistics 0:06:14.720 --> 0:06:15.520 and Shipping analyst. 0:06:15.839 --> 0:06:18.400 We move next to earnings from ev giant Tesla. 0:06:18.560 --> 0:06:21.880 Tesla's expectations for earnings in the third quarter. The company 0:06:21.880 --> 0:06:24.520 also forecasted as much as thirty percent growth in vehicle 0:06:24.560 --> 0:06:27.120 sales next year. This reflects the rebound and demand for 0:06:27.200 --> 0:06:28.520 Tesla's electric vehicles. 0:06:28.760 --> 0:06:31.080 For more, Paul and I were joined by Craig Trudell, 0:06:31.320 --> 0:06:34.200 Bloomberg Global Autos Editor. We first asked Craig for his 0:06:34.279 --> 0:06:35.839 take on Tesla's most recent. 0:06:35.600 --> 0:06:39.520 Results Oftentimes it's not necessarily the case that you can 0:06:39.560 --> 0:06:43.000 count on both earnings and the vision to be positive. 0:06:43.160 --> 0:06:46.279 In this case, both were working in Musk's favor. I 0:06:46.279 --> 0:06:49.560 think the earnings were much better than expected. I do 0:06:49.680 --> 0:06:53.240 think that those expectations came down quite a bit over 0:06:53.320 --> 0:06:57.119 the last year year and a half, but they sort 0:06:57.120 --> 0:07:01.760 of they did exceed expectations by pretty significant measures. And 0:07:02.920 --> 0:07:06.320 the profit margins in particular, or something that everybody keeps 0:07:06.440 --> 0:07:09.800 a very close eye on their automotive profit margins when 0:07:09.800 --> 0:07:12.080 you back out the credits that they sell to other 0:07:12.120 --> 0:07:16.640 automakers for regulatory purposes, those in particular, I feel like, 0:07:16.680 --> 0:07:18.920 are you know, just quarter in and quarter out what 0:07:19.000 --> 0:07:22.120 everybody looks at? That was a big beat. And then 0:07:22.480 --> 0:07:26.520 I think Musk was as self assured as I've ever heard. 0:07:27.440 --> 0:07:31.440 He's never won lacking in confidence. And for him to 0:07:31.560 --> 0:07:34.679 throw out, you know, twenty to thirty percent sales increase 0:07:34.760 --> 0:07:37.480 for next year, I think was very surprising. For nine 0:07:37.520 --> 0:07:41.360 ten months into the year, and they've delivered fewer vehicles 0:07:41.400 --> 0:07:43.800 in twenty twenty four than they did in twenty twenty three. 0:07:44.440 --> 0:07:46.680 Hey, Craig, So when I'm walking around New York City 0:07:46.800 --> 0:07:49.520 every so often I will see, to my surprise, a 0:07:49.640 --> 0:07:52.960 cyber truck. What is the leadst on that? What do 0:07:53.040 --> 0:07:55.200 they say in earnings? What can we expect there? 0:07:55.720 --> 0:07:59.080 They said that it was gross margin positive for the 0:07:59.080 --> 0:08:02.280 first time in the recent quarter, and so we're almost 0:08:02.640 --> 0:08:06.040 we're roughly a year into the launch of that vehicle. 0:08:06.160 --> 0:08:07.880 I would say that's a little on the early side, 0:08:08.280 --> 0:08:12.200 just relative to how Tesla has you know, done with 0:08:12.200 --> 0:08:15.680 with new vehicle launches in the past. So that is 0:08:15.720 --> 0:08:20.000 another another positive I think, you know, in terms of volume, 0:08:20.120 --> 0:08:24.000 it's it's still quite low relative to the Model Y 0:08:24.040 --> 0:08:25.960 and the Model three. That is still where you see 0:08:26.000 --> 0:08:29.720 the vast majority of Tesla's deliveries, so much so that 0:08:29.760 --> 0:08:33.360 Tesla has even yet to break out that that vehicle. 0:08:34.360 --> 0:08:37.760 And in terms of you know, quarterly results, and so 0:08:38.440 --> 0:08:40.800 I think we have a rough idea of how many 0:08:40.840 --> 0:08:44.760 they've sold. Ironically, based on the recalls that the company 0:08:44.760 --> 0:08:48.040 has had to do with the vehicle. It's it's as 0:08:48.080 --> 0:08:50.719 of the latest recall was, which was just a few 0:08:50.720 --> 0:08:53.280 weeks ago, it was around twenty seven thousand units, I believe, 0:08:54.080 --> 0:08:56.640 So you know, that's that's pretty small for a company 0:08:56.679 --> 0:09:00.600 that you know, may sell somewhere in a one point 0:09:00.600 --> 0:09:02.040 eight million vehicles this year. 0:09:02.360 --> 0:09:05.440 Where is the focus from the company here in terms 0:09:05.520 --> 0:09:06.960 of they seems like they have a lot of balls 0:09:07.000 --> 0:09:13.079 in the air, obviously, the car business itself, robotaxis, artificial intelligence, 0:09:13.120 --> 0:09:15.560 what are they? What does Elon want investors to focus on? 0:09:15.600 --> 0:09:19.000 Do you think? I think that's actually really one of 0:09:19.040 --> 0:09:21.880 the most interesting things here. And I think Liam Denning's 0:09:22.080 --> 0:09:24.280 column for Bloomberg Opinion, you know, does a great job 0:09:24.280 --> 0:09:27.400 of laying out this idea that you know, Musk's emphasis 0:09:27.480 --> 0:09:30.360 has really been on, you know, don't bother with the 0:09:30.440 --> 0:09:33.120 here and now, forget the near term earnings. The sort 0:09:33.160 --> 0:09:36.080 of big potential for this company has to do with, 0:09:36.280 --> 0:09:39.719 you know, selling self driving cars and humanoid robots and 0:09:40.080 --> 0:09:43.720 things that you know, we've heard Elon talk about time 0:09:43.720 --> 0:09:47.520 and time again, but not actually deliver. And I think, 0:09:47.679 --> 0:09:50.120 you know, if if you're sort of looking at this 0:09:50.160 --> 0:09:53.520 company sort of class half full, it's I'm less concerned 0:09:53.520 --> 0:09:56.240 than I am today about the here and now of 0:09:56.280 --> 0:09:59.680 this company and the earnings power of Tesla and it's 0:09:59.720 --> 0:10:05.640 it's current business and therefore, you know, more encouraged that 0:10:05.640 --> 0:10:08.000 that they have, you know, the ability and the time 0:10:08.440 --> 0:10:11.520 and the financial wherewithal to go out and pursue those 0:10:12.160 --> 0:10:14.640 you know, big stretch goals that Musk has stepped for 0:10:14.679 --> 0:10:17.720 the company, and you know, depending on who you ask, 0:10:18.480 --> 0:10:20.720 you know may or may not be able to actually 0:10:21.080 --> 0:10:23.360 follow through on his various predictions. 0:10:23.520 --> 0:10:26.000 Well, from an equity perspective, this stock has been all 0:10:26.080 --> 0:10:28.400 over the place this year. What's the goal case here? 0:10:28.440 --> 0:10:30.400 What are people saying? How much legs do they have 0:10:30.520 --> 0:10:33.200 to run? Can the stock go much further? What's the 0:10:33.240 --> 0:10:34.080 consensus there? 0:10:34.600 --> 0:10:37.360 You're absolutely right. I mean back in April, this was 0:10:37.400 --> 0:10:39.760 a stock that was down forty three percent for the year, 0:10:39.840 --> 0:10:42.840 and so for for them to have you know, come 0:10:42.840 --> 0:10:45.800 all the way back, they it's sold off quite a bit, 0:10:46.760 --> 0:10:50.520 you know, after the Robotaxi unveiling just a few weeks ago, 0:10:51.600 --> 0:10:55.360 and you know, we we've now seen the shares to 0:10:55.559 --> 0:10:58.680 go positive again for the year. I think whether or 0:10:58.720 --> 0:11:03.199 not the the company can can actually grow next year 0:11:03.400 --> 0:11:06.600 with deliveries, I think is really important. Because even Musk, 0:11:07.120 --> 0:11:09.400 who's you know, sort of perpetually said, you know, next 0:11:09.440 --> 0:11:12.440 year will be our year for autonomy, even he is saying, 0:11:12.640 --> 0:11:15.199 you know that this cyber cab that they showed a 0:11:15.240 --> 0:11:17.120 couple of weeks ago isn't going to be ready in 0:11:17.120 --> 0:11:20.480 twenty twenty six, and so we need this company to bring, 0:11:21.320 --> 0:11:25.280 you know, more affordable vehicles to market, to make teslas 0:11:25.280 --> 0:11:31.160 more accessible to more consumers and get back to when 0:11:31.160 --> 0:11:34.719 it's you know, growing again. To put it simply, and 0:11:35.320 --> 0:11:37.839 you know, I think it's still unclear what exactly they 0:11:37.880 --> 0:11:40.280 have to offer that's going to help them get there. 0:11:40.600 --> 0:11:42.920 Thanks to Craig Trudell, Bloomberg Global Autos Editor. 0:11:43.280 --> 0:11:46.200 Coming up, we'll discuss what we can expect and Walt 0:11:46.200 --> 0:11:47.520 Disney's succession planning. 0:11:47.640 --> 0:11:50.360 You're listening to the Bloomberg Intelligence on Bloomberg Radio, providing 0:11:50.360 --> 0:11:52.520 in depth research and data on two thousand companies and 0:11:52.559 --> 0:11:55.560 one hundred and thirty industries. You can access Bloomberg Intelligence 0:11:55.640 --> 0:11:56.880 be a b I go on the terminal. 0:11:56.960 --> 0:12:00.000 I'll Paul Sweeten and I'm normal. DUP, this is Bloomberg. 0:12:03.720 --> 0:12:07.600 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:12:07.679 --> 0:12:10.400 weekdays at ten am Eastern on Affle Card Playing and 0:12:10.520 --> 0:12:13.360 broud Otto with the Bloomberg Business app. Listen on demand 0:12:13.440 --> 0:12:17.800 wherever you get your podcasts, or watch us live on YouTube. 0:12:18.559 --> 0:12:21.600 I'm Paul and I'm normal. Enda, filling in for Alex Steel. 0:12:21.880 --> 0:12:24.520 We move next to earnings from the coffee chains Starbucks. 0:12:24.720 --> 0:12:27.040 This week, the company reported sales that plunged for the 0:12:27.120 --> 0:12:28.280 third consecutive quarter. 0:12:28.480 --> 0:12:31.480 Starbucks also pulled its guidance for twenty twenty five. This 0:12:31.520 --> 0:12:34.560 comes as a new CEO, Brian Nichol, tries to assess 0:12:34.600 --> 0:12:37.440 his business and develop a turnaround plan for more. 0:12:37.559 --> 0:12:40.160 Guest host Emily Grafao and I were joined by Michael Halen, 0:12:40.200 --> 0:12:43.920 Bloomberg Intelligence Senior Restaurant and food service analyst. We first 0:12:43.920 --> 0:12:46.679 asked Michael what exactly is going on at Starbucks. 0:12:46.920 --> 0:12:49.240 They played catch up a bit once the hiring of 0:12:49.280 --> 0:12:53.320 Brian Nichol was announced. You know, Brian Nichols started last month, 0:12:53.360 --> 0:12:55.000 and you know he's moving quickly. 0:12:55.080 --> 0:12:55.240 Man. 0:12:55.280 --> 0:12:57.880 He's making a lot of management changes, and he's. 0:12:57.720 --> 0:13:03.040 Aggressively making moves to simplify operations. You know, they're going 0:13:03.080 --> 0:13:06.680 to rationalize menu items, make it easier to execute, and 0:13:06.720 --> 0:13:07.360 try to bring. 0:13:07.200 --> 0:13:09.400 Hospitality back to the coffee shops right. 0:13:09.440 --> 0:13:12.640 They want to free up their employees, their partners as 0:13:12.679 --> 0:13:15.920 they like to call them, to get back to knowing 0:13:16.000 --> 0:13:18.760 the names of their customers right and being able to 0:13:18.800 --> 0:13:21.560 greet them with a smile and friendly service, right, and 0:13:21.600 --> 0:13:24.280 so's that's going to be job one, and then from 0:13:24.320 --> 0:13:26.520 there they're going to expand on the marketing side. 0:13:26.600 --> 0:13:29.560 You know, Starbucks has historically. 0:13:29.040 --> 0:13:32.720 Only marketed to its rewards members, right, and Brian nicol 0:13:32.760 --> 0:13:34.960 wants to expand that to everyone, right. 0:13:35.000 --> 0:13:36.280 And we think that's a smart plan. 0:13:36.360 --> 0:13:38.600 We think they've been under investing in marketing for a 0:13:38.640 --> 0:13:41.520 long time and we expect it to pay dividends as 0:13:41.559 --> 0:13:43.560 early as fiscal twenty twenty five. 0:13:44.240 --> 0:13:48.040 What is the company said to explain the seven percent 0:13:48.080 --> 0:13:50.840 decline in same store sales? Because before you came on, 0:13:50.920 --> 0:13:53.520 we were talking about how you have to wait in 0:13:53.559 --> 0:13:55.640 a really long line to get your Starbucks. 0:13:55.640 --> 0:13:57.359 There's less foot traffic. 0:13:57.200 --> 0:13:57.920 Right every doing it. 0:13:58.520 --> 0:14:01.400 There's I guess, well maybe some teams in the store, 0:14:01.400 --> 0:14:03.800 but there's less people in the store. What have they 0:14:03.840 --> 0:14:06.120 said about really what's driving that decline? 0:14:06.440 --> 0:14:06.640 You know? 0:14:06.720 --> 0:14:08.840 Part of what new CEO Brian Niccholas said is is 0:14:08.880 --> 0:14:11.840 like it's largely about the experience. You know, it's become 0:14:11.920 --> 0:14:16.520 largely transactional. Right, They've lost that customer service feel. They've 0:14:16.559 --> 0:14:19.200 had the trouble executing the orders. You know, a big 0:14:19.280 --> 0:14:22.040 part of it is, you know. And then he also 0:14:22.080 --> 0:14:25.160 mentioned that, you know, all of these new menu items 0:14:25.160 --> 0:14:28.680 that they added to try to bring people in didn't work, right. 0:14:28.720 --> 0:14:31.760 And then pricing has gotten ahead of itself at Starbucks 0:14:31.760 --> 0:14:32.479 as well. 0:14:32.480 --> 0:14:34.080 And then China, China. 0:14:33.800 --> 0:14:37.280 There's a huge price gap between the prices that they're charging. 0:14:37.360 --> 0:14:40.240 Sometimes they're charging three times as much as as some 0:14:40.280 --> 0:14:41.160 of their smaller. 0:14:40.840 --> 0:14:43.040 Competitors like Luck and Coffee and k Coffee. 0:14:43.080 --> 0:14:47.160 So, you know, prices has also been a big part 0:14:47.200 --> 0:14:49.880 of their issue, and it's something that they're they're going 0:14:49.880 --> 0:14:50.800 to address right away. 0:14:51.160 --> 0:14:55.520 You know, I've seen some crazy graphics in various articles 0:14:55.520 --> 0:14:58.840 showing the permutations of the different orders that one could have, 0:14:58.880 --> 0:15:02.400 and if you're bar barber, it's virtually impossible to learn 0:15:02.440 --> 0:15:04.520 all these Is there a sense that they got to 0:15:04.600 --> 0:15:07.440 simplify just the menu a little bit. 0:15:08.120 --> 0:15:11.200 Yeah, they issued a video and that was a big 0:15:11.280 --> 0:15:13.800 point of emphasis. It was like making the jobs of 0:15:13.840 --> 0:15:17.880 their bearistas a lot easier and their employees a lot easier, right, 0:15:18.000 --> 0:15:21.040 and so you know, when an employee stressed, it's very 0:15:21.080 --> 0:15:24.080 hard for them to provide the customer with a good experience, right, 0:15:24.120 --> 0:15:25.560 So this all flows downhill. 0:15:25.640 --> 0:15:28.280 So making the Barista's jobs easier. 0:15:29.480 --> 0:15:32.600 Making it more enjoyable environment for them is going to 0:15:32.680 --> 0:15:35.640 flow down to the consumer and then it's going to 0:15:35.680 --> 0:15:37.800 result in better traffic and same source sales. 0:15:38.320 --> 0:15:41.000 I was curious to get your thoughts, you know, Brian 0:15:41.080 --> 0:15:44.560 Nichols said. The company said that they're pulling back this 0:15:44.720 --> 0:15:48.160 guidance because the CEO needs more time to kind of 0:15:48.200 --> 0:15:51.640 think through all this. How unprecedented is that just thirty seconds? 0:15:52.120 --> 0:15:52.200 Uh? 0:15:52.320 --> 0:15:53.560 No, it would be This is very common. 0:15:53.600 --> 0:15:56.480 Any any good CEO worth his soult is going to 0:15:56.480 --> 0:15:58.560 suspend guidance so they have more time to get their 0:15:58.560 --> 0:15:59.480 initiatives in place. 0:15:59.520 --> 0:16:00.400 This is huge. 0:16:00.400 --> 0:16:03.520 Companies can take a long time for momentum to start 0:16:03.520 --> 0:16:06.119 building in the right direction, and this is a wise. 0:16:05.880 --> 0:16:09.160 Move our thanks to Michael Halen Bloomberg Intelligence senior restaurant 0:16:09.200 --> 0:16:10.440 and food service analysts. 0:16:10.760 --> 0:16:13.880 We move next to the Median entertainment space and Walt Disney. 0:16:14.120 --> 0:16:17.880 This week, Disney named a former Morgan Stanley CEO, James Gorman, 0:16:18.000 --> 0:16:20.400 chairman of the board. The company also said it will 0:16:20.400 --> 0:16:22.960 appoint a new CEO in early twenty twenty six. 0:16:23.320 --> 0:16:25.840 Nor and I were joined by Githa Rong Andathan Bloomberg 0:16:25.840 --> 0:16:28.840 Intelligence analyst on US Media. We first asked Githa for 0:16:28.960 --> 0:16:31.840 her thoughts on the latest with Disney's succession plan. 0:16:32.120 --> 0:16:34.840 So I think this is the number one issue for 0:16:35.000 --> 0:16:37.600 this company right now. I mean, succession planning has obviously 0:16:37.600 --> 0:16:40.480 not been Disney's strong suit. You know, they had botched 0:16:40.680 --> 0:16:44.800 succession attempts now multiple times, this is important. I mean, 0:16:44.840 --> 0:16:47.760 you have arguably one of the best executives in the 0:16:47.840 --> 0:16:52.040 business in James Gorman, who led such a smooth, orderly transition, 0:16:52.840 --> 0:16:56.240 you know, in his own CEO transition, just did it 0:16:56.360 --> 0:17:00.520 in five months with all internal candidates. So if it's 0:17:00.520 --> 0:17:02.800 going to be orchestrated by him, I think obviously he's 0:17:02.800 --> 0:17:06.119 been on the succession planning committee. It's his number one priority, 0:17:06.440 --> 0:17:09.119 and I think it definitely gives investors a lot of confidence. 0:17:09.680 --> 0:17:11.159 The one thing, though, that you know, you have to 0:17:11.200 --> 0:17:14.000 mention here is that the early twenty twenty six time 0:17:14.040 --> 0:17:17.640 frame that they have announced in terms of the new 0:17:17.720 --> 0:17:19.960 CEO appointment, I think that's a little bit later than 0:17:20.040 --> 0:17:22.959 what investors were expecting. I think most investors were expecting 0:17:23.000 --> 0:17:24.240 it to happen in twenty twenty five. 0:17:25.080 --> 0:17:27.320 I mean, things have really been tumultuous as we think 0:17:27.320 --> 0:17:31.040 about succession plans. What are investors looking for from a 0:17:31.080 --> 0:17:31.840 successor here? 0:17:32.400 --> 0:17:34.800 So right now, all that we know is that you 0:17:34.880 --> 0:17:38.560 have the four internal chiefs, you know, So you have 0:17:38.640 --> 0:17:41.880 the parks chief Josh Tomorrow, you have ESPN's Jimmy Pittaro, 0:17:42.320 --> 0:17:44.199 and you have the two big creative heads on the 0:17:44.240 --> 0:17:47.359 TV and the film side, Dana Walden and Alan Bergman, 0:17:47.440 --> 0:17:49.919 who are all front runners. So, you know, leading a 0:17:49.960 --> 0:17:53.639 company like Disney is really really challenging because you know, 0:17:53.680 --> 0:17:56.720 you had a parks guy in Bob Chapek who was 0:17:56.800 --> 0:17:59.520 leading the company, and obviously that turned out not so 0:17:59.640 --> 0:18:03.719 well because you know, the creative side was completely neglected. 0:18:04.160 --> 0:18:06.320 And now you have Barbiger kind of coming back in 0:18:06.440 --> 0:18:10.159 and cleaning up all those relationships that were broken with 0:18:10.760 --> 0:18:13.439 the Hollywood community. So it's going to be interesting to 0:18:13.480 --> 0:18:16.320 see whom he really picks. Obviously, the two front runners 0:18:16.359 --> 0:18:19.520 here are Dana Walden, who is a very well known, 0:18:19.840 --> 0:18:24.000 very well respected TV executive. She has deep, deep ties 0:18:24.040 --> 0:18:27.680 in Hollywood. She actually came over from Fox. She has 0:18:27.720 --> 0:18:30.679 built a lot of credibility within the industry, but she 0:18:30.760 --> 0:18:34.159 has absolutely no experience with the parks business. And remember, 0:18:34.200 --> 0:18:37.359 parks brings in almost fifty five to sixty percent of 0:18:37.400 --> 0:18:40.720 Disney's profits, so this is critical to the future of 0:18:40.760 --> 0:18:43.840 the company. Josh Tomorrow on the other side, of course, 0:18:43.880 --> 0:18:47.040 he's an out and out parks guy, has absolutely no 0:18:47.720 --> 0:18:50.760 experience with creative so this is where it gets really 0:18:50.800 --> 0:18:53.600 really challenging. So it's going to be interesting to see 0:18:53.600 --> 0:18:57.560 whether Barbiger things having that creative element is more important 0:18:57.680 --> 0:18:59.560 or whether it's again going to be a parks pick 0:18:59.760 --> 0:19:01.080 like Bob Schapeck. 0:19:01.520 --> 0:19:03.880 So Githa, you know, probably the end of the day, 0:19:03.960 --> 0:19:07.680 only one person counts, and it's not James Gorman, It's 0:19:07.720 --> 0:19:10.879 not the board, it's Bob Eiger. What do you think 0:19:11.040 --> 0:19:14.080 he wants to do? Will he be ready to go 0:19:14.600 --> 0:19:15.440 when this happens. 0:19:15.880 --> 0:19:18.080 I think he will be ready to go. The question 0:19:18.160 --> 0:19:20.640 is does he want to stick with an internal candidate? 0:19:20.760 --> 0:19:22.640 I mean we you know you know this very well, Paul. 0:19:22.640 --> 0:19:24.680 He's been doing this now for a very very long time. 0:19:25.359 --> 0:19:28.520 You know, there was first, of course the Jay Rozzulo thing. 0:19:28.560 --> 0:19:31.240 Then of course there was Bob Japek. There's always kind 0:19:31.240 --> 0:19:33.600 of been this proclivity towards an internal candidate. But having 0:19:33.640 --> 0:19:35.639 said that, for the CFO, they did look outside with 0:19:35.720 --> 0:19:38.399 Hugh Johnston. So again it's it's going to be interesting 0:19:38.480 --> 0:19:42.119 to see what happens and what he really wants to prioritize. 0:19:42.119 --> 0:19:45.280 If he thinks this time around the creative element is 0:19:45.320 --> 0:19:47.760 going to be more important, or whether he wants more 0:19:47.760 --> 0:19:49.800 of an operations kind of person. But I think yes, 0:19:49.840 --> 0:19:52.439 he will, he will go. His contract ends in December 0:19:52.440 --> 0:19:53.560 twenty twenty sixth. 0:19:53.480 --> 0:19:57.679 Our thanks to GEETHA. Rogenathan Bloomberg Intelligence analysts on US media. 0:19:57.840 --> 0:20:00.160 This week we focused on a Bloomberg Big Takes we're 0:20:00.400 --> 0:20:04.480 entitled Cracked Skull, Broken Bones show Rivian's Plant Danger. 0:20:04.920 --> 0:20:07.840