Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Stock Movers report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look now, I ad some stocks making
Speaker 3: news in the week ahead. I'm Nathan Hager, joined by
Speaker 3: Christina Kino, Managing editor for Bloomberg Markets Live on a
Speaker 3: week where we're going to hear from a few more
Speaker 3: companies reporting earnings as we wind down the season. Christine
Speaker 3: a few household names this week, including Nike on Tuesday,
Speaker 3: our investors finally going to hear the turnaround is swishing
Speaker 3: upward for a change.
Speaker 1: I see what you did there, Nathan, Yes, that is
Speaker 1: definitely the hope. Very interesting though, because they announced leadership
Speaker 1: change shortly before the earnings results, which are due on
Speaker 1: the thirtieth of June. So apparently David Denton will take
Speaker 1: over CFO in August. And interestingly, he is not an insider.
Speaker 1: He hasn't been a career employee at Nike. He's actually
Speaker 1: moving from Pfizer and has done similar stints at Low's
Speaker 1: and CBS as well. So that's quite interesting bringing in
Speaker 1: the outsider rather than someone who's familiar with the business
Speaker 1: and familiar with the turnaround plan.
Speaker 3: So obviously a pretty big change from bringing in a
Speaker 3: former insider to be the CEO. So what kind of
Speaker 3: fresh blood of fresh look at the company could we
Speaker 3: expect once they report earnings this week?
Speaker 1: Yeah, I mean, that is the big question, isn't it, Nathan.
Speaker 1: That's something that investors and analysts will definitely note. I mean,
Speaker 1: the City Group analysts noting that it is quite surprising
Speaker 1: that they're doing this just ahead of those fourth quarter results,
Speaker 1: especially because the company is still under immense pressure to
Speaker 1: really show the results of this turnaround plan. The stock
Speaker 1: price is still hovering at around the lowest since twenty fourteen,
Speaker 1: and investor confidence is a little bit still at the lows.
Speaker 1: But you know, maybe a fresh blood might be just
Speaker 1: what the company needs for a bit of a turnaround here.
Speaker 1: But we'll find out more when they give us the
Speaker 1: details next week.
Speaker 3: Absolutely, Also on Tuesday, we're going to get results from
Speaker 3: Constellation Brands after the bell. It's been a tough time
Speaker 3: for the beer and wine business. Are we gonna be
Speaker 3: able to raise a glass to these results?
Speaker 1: I mean, based on the assessment from Jeffrey's analysts, there's
Speaker 1: still a lot of caution on that front, Nathan. I mean,
Speaker 1: they're worried about just the overall trend of declining alcohol
Speaker 1: consumption trends in the US because you know, the younger
Speaker 1: generation don't drink as much anymore. I don't know what's
Speaker 1: up with that, but that's definitely something that is a
Speaker 1: bit of a negative for Constellation Brands. Jeffrees in particular,
Speaker 1: still expecting the company to reiterate those organic sales around
Speaker 1: minus one percent to plus one percent. But one silver
Speaker 1: lining is they do have strong adspending for the World Cup,
Speaker 1: but then that also cuts into their earnings margins. So
Speaker 1: we'll see if that pays off when we get those results.
Speaker 1: This might be a little bit early, but you know,
Speaker 1: a little bit of positive momentum can't hurt the brand
Speaker 1: at this moment.
Speaker 3: Yeah, So a lot of crosswinds. They're not just from
Speaker 3: consumer changing habits and those advertising spending potential headwinds there,
Speaker 3: but I mean the entire beverage industry has been dealing
Speaker 3: with rising commodity costs from what's been happening in the
Speaker 3: Middle East as well. I mean that could have an
Speaker 3: impact on the results too, couldn't that.
Speaker 1: Yeah, absolutely. I mean, margins definitely something to wash for
Speaker 1: Constellation brands. I mean some of the costs for raw
Speaker 1: materials aluminum cans, for instance, have gotten a lot more
Speaker 1: expensive over the last few months. Of course, we know
Speaker 1: that flows through the strait of hormones finally starting to flow.
Speaker 1: We've been getting reports on that as well as US
Speaker 1: and Iran make headway towards striking a longer term deal.
Speaker 1: But yeah, it takes a little bit of a time,
Speaker 1: doesn't it. I mean, we've definitely seen a lag in
Speaker 1: some of those prices when it comes to kind of
Speaker 1: coming back down for the recent high. So that's something
Speaker 1: that Constellation Brands will definitely have to answer for when
Speaker 1: we hear from them next week.
Speaker 3: Yeah, I'll be interested to hear as well about how
Speaker 3: they might be adapting to those changing consumer habits, because
Speaker 3: it seems like there's been a lot more interest as
Speaker 3: well in non alcoholic beer and wine, so we'll be.
Speaker 2: Watching that too.
Speaker 3: On Wednesday, We're going to hear from General Mills and
Speaker 3: correct me if I'm wrong, Christine, But it seems like
Speaker 3: the last few months have been pretty rough for name
Speaker 3: brands at the grocery aisle, Am I remembering that rain.
Speaker 1: Yeah, that's absolutely right. It has been a tough period,
Speaker 1: but we are seeing, for instance, Bloomberg Intelligence analyst saying
Speaker 1: that perhaps actually the worst of it might be over
Speaker 1: for some of the national food brands like General Mills.
Speaker 1: They're projecting that some of the sales for these brands
Speaker 1: could climb about three percent to four percent this year.
Speaker 1: I mean, of course, house brands have an advantage, especially
Speaker 1: when it comes to costs for consumers, but I think
Speaker 1: there's a little bit of room now for some of
Speaker 1: the brand names to gain back some of that ground.
Speaker 1: And you know, another theme actually that could be going
Speaker 1: well for General Mills is the pet food business, because
Speaker 1: we know that people love spending money on their pets. Oh,
Speaker 1: and that is something that could be a bright spot potentially.
Speaker 2: Okay.
Speaker 3: I kind of wonder though, whether a company like General
Speaker 3: Mills and some of its competitors as well, might be
Speaker 3: weathering some of these issues around price by doing something
Speaker 3: that I've seen over the last few months, if not years,
Speaker 3: packaging getting smaller. Is that something we could hear about
Speaker 3: on the call.
Speaker 1: Yeah, I mean, that's certainly one way to mitigate some
Speaker 1: of the costs, right that we've been talking about in
Speaker 1: relation to other companies, and certainly if you're spending less unpackaging,
Speaker 1: especially given the current era of still high raw material prices,
Speaker 1: that certainly helps for sure. And so yeah, maybe something
Speaker 1: that could at the margin help General Mills kind of
Speaker 1: gain more solid footing here. But yeah, well, we'll hear
Speaker 1: from them on the first of July is when their
Speaker 1: earnings are due.
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