WEBVTT - Week Ahead: Nike, Constellation Brands, General Mills 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Stock Movers report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Let's take a look now, I ad some stocks making

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<v Speaker 3>news in the week ahead. I'm Nathan Hager, joined by

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<v Speaker 3>Christina Kino, Managing editor for Bloomberg Markets Live on a

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<v Speaker 3>week where we're going to hear from a few more

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<v Speaker 3>companies reporting earnings as we wind down the season. Christine

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<v Speaker 3>a few household names this week, including Nike on Tuesday,

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<v Speaker 3>our investors finally going to hear the turnaround is swishing

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<v Speaker 3>upward for a change.

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<v Speaker 1>I see what you did there, Nathan, Yes, that is

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<v Speaker 1>definitely the hope. Very interesting though, because they announced leadership

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<v Speaker 1>change shortly before the earnings results, which are due on

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<v Speaker 1>the thirtieth of June. So apparently David Denton will take

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<v Speaker 1>over CFO in August. And interestingly, he is not an insider.

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<v Speaker 1>He hasn't been a career employee at Nike. He's actually

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<v Speaker 1>moving from Pfizer and has done similar stints at Low's

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<v Speaker 1>and CBS as well. So that's quite interesting bringing in

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<v Speaker 1>the outsider rather than someone who's familiar with the business

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<v Speaker 1>and familiar with the turnaround plan.

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<v Speaker 3>So obviously a pretty big change from bringing in a

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<v Speaker 3>former insider to be the CEO. So what kind of

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<v Speaker 3>fresh blood of fresh look at the company could we

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<v Speaker 3>expect once they report earnings this week?

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<v Speaker 1>Yeah, I mean, that is the big question, isn't it, Nathan.

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<v Speaker 1>That's something that investors and analysts will definitely note. I mean,

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<v Speaker 1>the City Group analysts noting that it is quite surprising

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<v Speaker 1>that they're doing this just ahead of those fourth quarter results,

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<v Speaker 1>especially because the company is still under immense pressure to

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<v Speaker 1>really show the results of this turnaround plan. The stock

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<v Speaker 1>price is still hovering at around the lowest since twenty fourteen,

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<v Speaker 1>and investor confidence is a little bit still at the lows.

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<v Speaker 1>But you know, maybe a fresh blood might be just

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<v Speaker 1>what the company needs for a bit of a turnaround here.

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<v Speaker 1>But we'll find out more when they give us the

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<v Speaker 1>details next week.

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<v Speaker 3>Absolutely, Also on Tuesday, we're going to get results from

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<v Speaker 3>Constellation Brands after the bell. It's been a tough time

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<v Speaker 3>for the beer and wine business. Are we gonna be

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<v Speaker 3>able to raise a glass to these results?

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<v Speaker 1>I mean, based on the assessment from Jeffrey's analysts, there's

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<v Speaker 1>still a lot of caution on that front, Nathan. I mean,

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<v Speaker 1>they're worried about just the overall trend of declining alcohol

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<v Speaker 1>consumption trends in the US because you know, the younger

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<v Speaker 1>generation don't drink as much anymore. I don't know what's

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<v Speaker 1>up with that, but that's definitely something that is a

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<v Speaker 1>bit of a negative for Constellation Brands. Jeffrees in particular,

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<v Speaker 1>still expecting the company to reiterate those organic sales around

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<v Speaker 1>minus one percent to plus one percent. But one silver

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<v Speaker 1>lining is they do have strong adspending for the World Cup,

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<v Speaker 1>but then that also cuts into their earnings margins. So

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<v Speaker 1>we'll see if that pays off when we get those results.

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<v Speaker 1>This might be a little bit early, but you know,

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<v Speaker 1>a little bit of positive momentum can't hurt the brand

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<v Speaker 1>at this moment.

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<v Speaker 3>Yeah, So a lot of crosswinds. They're not just from

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<v Speaker 3>consumer changing habits and those advertising spending potential headwinds there,

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<v Speaker 3>but I mean the entire beverage industry has been dealing

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<v Speaker 3>with rising commodity costs from what's been happening in the

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<v Speaker 3>Middle East as well. I mean that could have an

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<v Speaker 3>impact on the results too, couldn't that.

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<v Speaker 1>Yeah, absolutely. I mean, margins definitely something to wash for

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<v Speaker 1>Constellation brands. I mean some of the costs for raw

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<v Speaker 1>materials aluminum cans, for instance, have gotten a lot more

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<v Speaker 1>expensive over the last few months. Of course, we know

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<v Speaker 1>that flows through the strait of hormones finally starting to flow.

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<v Speaker 1>We've been getting reports on that as well as US

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<v Speaker 1>and Iran make headway towards striking a longer term deal.

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<v Speaker 1>But yeah, it takes a little bit of a time,

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<v Speaker 1>doesn't it. I mean, we've definitely seen a lag in

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<v Speaker 1>some of those prices when it comes to kind of

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<v Speaker 1>coming back down for the recent high. So that's something

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<v Speaker 1>that Constellation Brands will definitely have to answer for when

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<v Speaker 1>we hear from them next week.

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<v Speaker 3>Yeah, I'll be interested to hear as well about how

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<v Speaker 3>they might be adapting to those changing consumer habits, because

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<v Speaker 3>it seems like there's been a lot more interest as

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<v Speaker 3>well in non alcoholic beer and wine, so we'll be.

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<v Speaker 2>Watching that too.

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<v Speaker 3>On Wednesday, We're going to hear from General Mills and

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<v Speaker 3>correct me if I'm wrong, Christine, But it seems like

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<v Speaker 3>the last few months have been pretty rough for name

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<v Speaker 3>brands at the grocery aisle, Am I remembering that rain.

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<v Speaker 1>Yeah, that's absolutely right. It has been a tough period,

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<v Speaker 1>but we are seeing, for instance, Bloomberg Intelligence analyst saying

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<v Speaker 1>that perhaps actually the worst of it might be over

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<v Speaker 1>for some of the national food brands like General Mills.

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<v Speaker 1>They're projecting that some of the sales for these brands

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<v Speaker 1>could climb about three percent to four percent this year.

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<v Speaker 1>I mean, of course, house brands have an advantage, especially

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<v Speaker 1>when it comes to costs for consumers, but I think

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<v Speaker 1>there's a little bit of room now for some of

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<v Speaker 1>the brand names to gain back some of that ground.

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<v Speaker 1>And you know, another theme actually that could be going

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<v Speaker 1>well for General Mills is the pet food business, because

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<v Speaker 1>we know that people love spending money on their pets. Oh,

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<v Speaker 1>and that is something that could be a bright spot potentially.

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<v Speaker 2>Okay.

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<v Speaker 3>I kind of wonder though, whether a company like General

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<v Speaker 3>Mills and some of its competitors as well, might be

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<v Speaker 3>weathering some of these issues around price by doing something

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<v Speaker 3>that I've seen over the last few months, if not years,

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<v Speaker 3>packaging getting smaller. Is that something we could hear about

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<v Speaker 3>on the call.

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<v Speaker 1>Yeah, I mean, that's certainly one way to mitigate some

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<v Speaker 1>of the costs, right that we've been talking about in

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<v Speaker 1>relation to other companies, and certainly if you're spending less unpackaging,

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<v Speaker 1>especially given the current era of still high raw material prices,

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<v Speaker 1>that certainly helps for sure. And so yeah, maybe something

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<v Speaker 1>that could at the margin help General Mills kind of

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<v Speaker 1>gain more solid footing here. But yeah, well, we'll hear

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<v Speaker 1>from them on the first of July is when their

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<v Speaker 1>earnings are due.

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