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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Meta platforms in talks to spend billions on Google's AI chip,

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Speaker 2: suggesting that the search giant Google has made the case

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Speaker 2: that it can rival in Vidia as a leader in

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Speaker 2: artificial intelligence technology. Let's check in with an expert who's

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Speaker 2: got an opinion there, Mandeep Singh, Senior tech analyst for

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Speaker 2: Bloomberg Intelligence. Mandy, what are you making this news with

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Speaker 2: Meta investing and spending money on Google's AI chips? What

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Speaker 2: does that mean for the space and you know, Nvidia

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Speaker 2: in particular, because we're seeing some big moves in the

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Speaker 2: stock market today.

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Speaker 3: Look, I mean, we know CAPEX numbers are going up,

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Speaker 3: not just next year, probably through twenty twenty eight, because

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Speaker 3: Meta has given some sort of a three year forecast.

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Speaker 3: In fact, Mark Zuckerbert has mentioned that you know, they

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Speaker 3: plan to spend up to six hundred billion dollars in

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Speaker 3: capex through twenty twenty eight. So when you are spending

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Speaker 3: such big sums, you don't want to be dependent on

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Speaker 3: one supplier, and in this case, Nvidia still has the

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Speaker 3: best chips. They probably have a virtual monopoly when it

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Speaker 3: comes to the training. But on the infrincing side, I

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Speaker 3: think everyone, especially among the hyperscalers who don't have their

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Speaker 3: own chips, are looking to diversify. And I think I'm

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Speaker 3: very surprised that Meta is looking to buy something from Google,

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Speaker 3: given they compete, you know, so furiously on the digital

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Speaker 3: ad side. But that's really a reflection of the changing

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Speaker 3: tech stack and how these companies are evolving with AI.

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Speaker 4: What is it about Alphabet and Google that we did

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Speaker 4: not realize that they're making so much progress on their

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Speaker 4: own chips, these TPUs tensor processing units. It does feel

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Speaker 4: like it's kind of come from out of nowhere. I know,

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Speaker 4: folks in the tech industry know that Google has been

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Speaker 4: working on this for a while, but if you were

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Speaker 4: just following along, it feels like Nvidia had this locked

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Speaker 4: up and then all of a sudden it's a little

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Speaker 4: bit more open.

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Speaker 5: Yeah.

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Speaker 3: I mean, Google is in the seventh generation of their TPUs,

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Speaker 3: so clearly they have been working at this for a while,

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Speaker 3: which is the reason why the TPU has been able

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Speaker 3: to catch up to mvd's GPU in terms of performance.

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Speaker 3: But to your point, look, the Gemini model was not

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Speaker 3: comparable to open Ai and Entropics leadings models up until

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Speaker 3: the last six months. So that is what has changed

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Speaker 3: that Gemini as a standalone model has been able to

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Speaker 3: match up to you know, open Ai, whether it's in

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Speaker 3: terms of chat, doot functionality, image generation, video generation. They

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Speaker 3: are a state of the art model. Maybe in terms

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Speaker 3: of holding agents they still trail. Entropics and Thropic release

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Speaker 3: a new version yesterday and they still claim that their

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Speaker 3: models are better than Gemini. But if you are looking

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Speaker 3: for a state of the art model and the lowest

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Speaker 3: cost in terms of tokens, Gemini is your best better

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Speaker 3: And which is what Meta is realizing that yes, they

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Speaker 3: could use the low cost that Google has in terms

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Speaker 3: of running their infrastructure and use it to their advantage

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Speaker 3: in terms of how they are looking to deploy Jenni

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Speaker 3: on their family of facts.

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Speaker 2: So, Mandy, you can you give us a sense of

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Speaker 2: the competitive landscape today for Nvidia. We know, I guess

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Speaker 2: now we have a better appreciation for Google as a competitors.

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Speaker 5: Laid out for us and how you think it might

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Speaker 5: play out.

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Speaker 3: I mean, the one metric that Nvidia shared on their

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Speaker 3: latest earnings call was their content per gigawatt is going

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Speaker 3: to grow over the next few years. And the reason

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Speaker 3: they said is because they generate the most tokens for

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Speaker 3: what now, for one gigawad, Jensen said they'll have up

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Speaker 3: to thirty to thirty five billion dollars of Nvidia chips

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Speaker 3: being purchased. Think about it. You know, if a one

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Speaker 3: gigawat costs fifty billion, any company is spending thirty to

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Speaker 3: thirty five billion. And all these companies like open Ai

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Speaker 3: has talked about adding up to twenty six gigawatts in capacity.

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Speaker 3: That really translates into huge revenue for Nvidia just from

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Speaker 3: one hyper scaler. And that's what I think Meta if

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Speaker 3: they plan to add ten gigawatts over the next five years,

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Speaker 3: they don't want to be giving Nvidia, you know, three

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Speaker 3: hundred billion dollars just for the chips. They want to

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Speaker 3: diversify and really make sure they're running their infrastructure at

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Speaker 3: the lowest cost, which is what Google is doing. Google

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Speaker 3: spend ninety billion dollars in CAPEX this year and guess what.

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Speaker 3: They have a cloud business. They have trained their new model,

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Speaker 3: they're doing infrincing at scale. They're serving search and all

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Speaker 3: their family of appso Genii functionality, so they are really

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Speaker 3: it very efficiently. They don't They're not spending to thirty

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Speaker 3: to thirty five billion dollars per gigawatt, and that's what

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Speaker 3: everyone is seeing now in terms of efficiency.

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Speaker 4: So you do a great job of explaining this from

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Speaker 4: a technical point of view, from the technologies point of view,

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Speaker 4: But for investors who really just understand in video as

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Speaker 4: you know, AI personified or embodied, is this just an

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Speaker 4: opportunity to diversify and not rely so much on Invidia

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Speaker 4: and maybe chase another company whose stairs have not rallied

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Speaker 4: as much.

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Speaker 3: I think so. I mean, it's very hard to see

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Speaker 3: multiple expansion in a company like Nvidia, which was close

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Speaker 3: to you know, four trillion plus, and I think they're

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Speaker 3: growing very nicely into earnings. They've given a forecast of

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Speaker 3: up to three hundred and thirty billion dollars and revenue

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Speaker 3: next year, so there is embedded growth in there. But

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Speaker 3: everyone has that scarce from you know, the dot com

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Speaker 3: bubble in terms of paying too much in terms of multiple,

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Speaker 3: and that's where you're seeing people really beingservative in terms

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Speaker 3: of what sort of multiple they pay for a stock.

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Speaker 3: Like en video, Stay with us.

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Speaker 5: More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 5: Let's talk some retailers.

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Speaker 2: We got some retailers bringing up the rear of earning

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Speaker 2: season as they liked to do. We had Dick spoarding goods,

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Speaker 2: and we had Best Buy. And let's break it all

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Speaker 2: down with Lindsay, Dutch Consumer, Hardline Senior, and also Bloomberg

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Speaker 2: Intelligence joining us from Princeton via that Zoom thing. Let's

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Speaker 2: start with Dick Sporting Goods. They raised their outlook again,

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Speaker 2: but I guess investors are focused on I guess some

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Speaker 2: of the costs trying to turn around foot Locker.

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Speaker 5: Talk to us about Dick spoorting goods at Lindsay.

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Speaker 3: Yes, that's right.

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Speaker 6: The legacy business remained very strong in the third quarter.

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Speaker 6: Strong back to school, clear demand momentum heading into the

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Speaker 6: fourth quarter. That's where the raised outlook came. It was

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Speaker 6: really for the legacy business. But when we look at Footlocker,

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Speaker 6: you know, the deal closed early September. The outlook for

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Speaker 6: the fourth quarter is mid to high single digit same

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Speaker 6: source sales decline. Dix is also looking to expedite the

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Speaker 6: turnaround there, which means offloading old inventory steep markdowns in

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Speaker 6: that fourth quarter, which is going to really hurt the

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Speaker 6: margin as well. So foot Locker, you know, needs a

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Speaker 6: lot of work. Fourth quarter is going to be weak,

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Speaker 6: and investors are really looking to see how quickly they

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Speaker 6: can turn that business around.

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Speaker 4: Yeah, and probably they'll need to put some money into

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Speaker 4: it as well to reorganize stores and freshen up the display.

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Speaker 4: How much of this deal Dick's buying foot Locker was

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Speaker 4: predicated on Nike and what it was doing with this

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Speaker 4: shift back to its wholesale channels and away from solely

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Speaker 4: relying on its direct to consumer offerings and its own stores.

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Speaker 6: The full looker was, I would argue, over exposed to Nike.

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Speaker 6: You know, several years ago they had been working that

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Speaker 6: exposure down. I think Dix will remain focused on being diversified,

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Speaker 6: just given that their own assortment where they're leaning into

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Speaker 6: lots of other brands, new up and coming brands like

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Speaker 6: Hoka and on. They did discuss though that foot Locker

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Speaker 6: will sort of remain sort of a hub for basketball,

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Speaker 6: and Nike does have a stronghold in the basketball market,

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Speaker 6: so I expect Nike to be, you know, a strong

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Speaker 6: vendor with foot Locker, but Dix is looking to make

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Speaker 6: sure that they have that right assortment, the newest stuff,

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Speaker 6: the hottest lines coming from Nike and others.

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Speaker 5: What is Dick saying about tariffs in their business, so.

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Speaker 6: You know, Tara, they are going to feel higher costs,

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Speaker 6: you know, in this back half of the year and

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Speaker 6: even into next year. Dix has since the pandemic, since

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Speaker 6: they've been able to see sort of an increase in

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Speaker 6: demand for their premium assortment. They're not really a huge

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Speaker 6: discounter for the holiday. They like to sell their product

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Speaker 6: fully through, so I don't expect them to sort of discount,

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Speaker 6: and they have taken prices up selectively but certainly not

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Speaker 6: across the board, and their higher income consumer is sort

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Speaker 6: of accepting those increases. I think Footlocker is a little

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Speaker 6: bit of a different story, and you might see that

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Speaker 6: impact a little bit bigger on that business, just because

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Speaker 6: they don't have those premium products and they're already going

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Speaker 6: to need to offload older inventory with steep discounts. So

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Speaker 6: you sort of have that turnaround compounded with these rising

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Speaker 6: costs heading into the next year. Something for them to work.

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Speaker 7: On, Lindsay, I also want to ask you about best Buy.

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Speaker 4: The shares are up about four and a half percent

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Speaker 4: right now, and of course this consumer electronics retailer how

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Speaker 4: to beat and raise quarter. It looks pretty good, and

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Speaker 4: it looks like it's on the usual string sales of

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Speaker 4: mobile phones and sales of computer equipment.

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Speaker 6: Yeah, so best Buy had a strong third quarter, better

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Speaker 6: as better than expected, as you mentioned. I think, you know,

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Speaker 6: the stock isn't getting a full bump because there is

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Speaker 6: definitely some conservatism and a low guide for the fourth quarter,

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Speaker 6: and investors are trying to figure out, you know, is

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Speaker 6: it just conservatism, are they just worried about the consumer,

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Speaker 6: or is there something really there that there's going to

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Speaker 6: be a slowdown in that fourth quarter. But the business

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Speaker 6: looks good. Demand looks strong, as you mentioned, computing, phones,

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Speaker 6: gaming all looking solid, and they're also seeing an improvement

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Speaker 6: in home theater, which is really big because that has

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Speaker 6: been a weaker category for the last couple of years.

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Speaker 6: So if that comes to fruition, I definitely think there

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Speaker 6: will be strength in the fourth quarter.

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Speaker 2: So you think about a best Buy, I mean some

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Speaker 2: of those are big ticket items here, and that would

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Speaker 2: suggest that they're confident. I think they go to a

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Speaker 2: part of the K shaped economy, may me that that

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Speaker 2: is doing better.

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Speaker 5: Is that a typical best Buy customer?

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Speaker 6: So best Buy definitely promotions are going to be a

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Speaker 6: big piece of the fourth quarter. They're sort of leaning

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Speaker 6: into those promotional events. That's what worked last year, and

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Speaker 6: I think they're trying to lean into the things that

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Speaker 6: worked last year for this year. And I do think

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Speaker 6: the consumer backshop is quite similar when we do that compare.

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Speaker 6: I also they also recently launched a marketplace, and they

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Speaker 6: seem to have a stronger focus on marketing and advertising,

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Speaker 6: and so they're really trying to meet the consumer where

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Speaker 6: they are and make sure that best Buy is top

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Speaker 6: of mind when you're shopping for a wide array of things,

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Speaker 6: not just those big ticket items like TVs or appliances.

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Speaker 6: So they're trying to have a bigger wallet share with

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Speaker 6: consumers across the board, and they're leaning on that marketplace

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Speaker 6: and advertising to do it and then hopefully get you

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Speaker 6: into the store, and that's where they can bring their

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Speaker 6: customer service and experience as well.

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Speaker 4: Did they say anything or give an a indication on

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Speaker 4: how they're preparing for Black Friday and for the holiday

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Speaker 4: shopping season.

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Speaker 6: It sounds like very similar to last year. So they

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Speaker 6: started their deals about a week ago. They roll out

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Speaker 6: new deals each week. They are leaning into their paid

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Speaker 6: membership program, so paid members get access to certain deals

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Speaker 6: over the regular shopper. But the playbook looks very very similar,

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Speaker 6: but the demand picture looks better. So hopefully those promo

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Speaker 6: events can really draw that shopper in, especially since everyone's

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Speaker 6: already looking for those items.

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Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 7: Let's dig into.

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Speaker 4: Some of the individual companies a little bit more here

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Speaker 4: with Mary Ross Gilbert. She's a senior Equity and that's

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Speaker 4: covering the sector for Bloomberg Intelligence. And Mary, let me

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Speaker 4: start off with Coles because we talk about companies that

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Speaker 4: are gaining market share. Coles lost a lot of market

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Speaker 4: share over the past five six years and it's.

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Speaker 7: Coming back a bit here. What is its strategy?

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Speaker 4: Is it just that it's kind of simplified its business model, Garlic.

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Speaker 8: What's happening here is that they've kind of gone back

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Speaker 8: to the basics. What's something something that Coles has always

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Speaker 8: been known for, So one is their private brand. So

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Speaker 8: if you think about some of the brands like so

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Speaker 8: and Juniors, Lauren Conrad for women, and they brought those

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Speaker 8: brands back because they actually sacrificed some of those brands

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Speaker 8: under the prior leadership and replaced them with some more

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Speaker 8: name brands like Madden Girl, trying to really attract the

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Speaker 8: junior shopper there. And now that they've brought the private

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Speaker 8: brands back, they brought back petite sizing, which was really

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Speaker 8: important to their customer base. Now they're really starting to see,

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Speaker 8: you know, a recovery. But they're not out of the

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Speaker 8: woods yet, Scarlett, as you pointed out, I mean, they're

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Speaker 8: really cycling three years of declines, but we are seeing

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Speaker 8: encouraging results and given that they actually turned positive in

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Speaker 8: the latest month, it looks like they could actually reach

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Speaker 8: a break even in the fourth quarter, even though they're

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Speaker 8: guiding to a one point seven percent comp sales decline.

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Speaker 8: So it's very encouraging to see with Coohle's again not

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Speaker 8: out of the woods. And when you look at what's

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Speaker 8: going on with so for it's now a two billion

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Speaker 8: dollar business and as you were sort of highlighting, that

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Speaker 8: means they really lost you know, over the last four

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Speaker 8: years something like four to five billion in other categories,

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Speaker 8: so they have lost market share. We think they're losing

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Speaker 8: it to off price and some of the value players

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Speaker 8: in the specialty space such as Old Navy, you know,

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Speaker 8: a gap brand.

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Speaker 2: Stock is up thirty three percent today alone to a

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Speaker 2: huge move up forty nine percent year to date.

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Speaker 5: So it seems like the market likes what it heard here.

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Speaker 2: So from a competitive landscape, where does Coles kind of

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Speaker 2: fit in out there? Mary?

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Speaker 8: So, Paul Coles is really a value player in the

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Speaker 8: department store space, so they're really a notch below Macy's.

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Speaker 8: And they're also located off the mall, which can be

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Speaker 8: an advantage and because they brought in so for as

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Speaker 8: a beauty authority, and beauty is a very big and

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Speaker 8: important and higher margin category for department stores. So that's sorry.

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Speaker 5: You have to invest in your face.

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Speaker 8: Somebody once told me, yes, you got to invest in

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Speaker 8: your face. That's exactly right. Well, the idea there is

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Speaker 8: that you're getting a repeat customer, they have to come

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Speaker 8: back and they have to replenish product. But we did

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Speaker 8: see a comp sales decline because that business is matured,

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Speaker 8: it's kind of tracking somewhat close to what the the

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Speaker 8: company is tracking in terms of comp sales. So we

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Speaker 8: did see a decline in the latest quarterer. So that's

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Speaker 8: they do have a number of initiatives to try to

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Speaker 8: bolster that because of course we're seeing gains with some

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Speaker 8: of their competitors, and we think we'll see that when

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Speaker 8: Macy's goes to report next week.

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Speaker 4: Right, and of course that's a big one, right in

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Speaker 4: terms of department store chains. We'll be looking for that one,

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Speaker 4: and of course you'll help us break it down when

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Speaker 4: those cross.

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Speaker 5: Mary.

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Speaker 4: I also want to ask you about Abercommie Fitch. It

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Speaker 4: was the Darling two years ago because the new CEO

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Speaker 4: found a way to make the brand relevant to a

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Speaker 4: new audience. It was no longer targeting teenage boys, for instance,

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Speaker 4: and really targeting young working women.

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Speaker 7: But it's had a brutal twenty twenty five.

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Speaker 4: The shares have fallen, I believe more than fifty percent

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Speaker 4: through Monday's Clothes. A lot of concerns about tariffs perhaps

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Speaker 4: and maybe even a lack of fresh ideas in terms

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Speaker 4: of its offerings. When you look at the stock today,

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Speaker 4: it is soaring up thirty percent on the latest earnings.

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Speaker 4: What's the narrative with Abercommune Fitch right now?

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Speaker 5: Yeah?

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Speaker 8: Yeah, so Scarlett with Abercrombie and Fitch, their numbers came

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Speaker 8: in better than expected. So the namesake brand, as you

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Speaker 8: pointed out, I mean that had been double digit increases

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Speaker 8: over the last three years. So they're cycling those increases

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Speaker 8: and that's why their sales are coming in less than

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Speaker 8: expected generally for the whole year and why the stock

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Speaker 8: is down. But this quarter the comp sales declined. There

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Speaker 8: was about three point three percent, so that was better

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Speaker 8: than expected. And when you look at Hollister, though, Hollister

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Speaker 8: has been coming in ahead of expectations and they've been

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Speaker 8: posting double digit increases. So as you were talking about

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Speaker 8: sort of the millennial women who really love and also

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Speaker 8: the men, but it does tend to favor more of

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Speaker 8: the women on the Abercrombie side on the Hollister side,

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Speaker 8: which really caters to jazz that has been on fire.

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Speaker 8: And so that's what's helping to kind of over come

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Speaker 8: the weakness that they're seeing at Abercrombie. But also it's

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Speaker 8: looking like Abercrombie could turn positive in the fourth quarter

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Speaker 8: with a number of the initiatives that they have in

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Speaker 8: place going into the holiday quarter, even though they're cycling

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Speaker 8: some pretty strong gains in the prior year and the

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Speaker 8: year before that. So there's some encouragement there. And I

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Speaker 8: think and then of course you have some short interests,

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Speaker 8: both in that stock and massle in Cohal's, and that's

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Speaker 8: part of the big bounce back that you're seeing this morning,

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Speaker 8: is some of that short covering.

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Speaker 2: What we're not really talking about, Mary, is tariffs and

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Speaker 2: the impact on these retailers.

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Speaker 5: What's the story these days.

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Speaker 8: Yeah, So in the case of Paul, in the case

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Speaker 8: of tariffs with Abercrombie, they expect to have a sixty

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Speaker 8: million dollars hit in the fourth quarter, So they are

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Speaker 8: being hit by tariffs, but they're discounting less. Plus they

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Speaker 8: have lower freight expenses, and this is something we've been

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Speaker 8: hearing from most of the retailers, is that lower freight

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Speaker 8: costs are also helping to bolster margin. So they are

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Speaker 8: going to be impacted, but probably not as badly as before,

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Speaker 8: given that they've got an improvement in average price points,

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Speaker 8: less discounting and lower freight that's helping to offset some

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Speaker 8: of the tariffs. And remember that sixty million dollars hit

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Speaker 8: on tariffs for Avercrombie. That's after mitigation efforts, so there

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Speaker 8: is still going to be an impact. Cole's even brought

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Speaker 8: it up, which they hadn't really brought up tariffs in

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Speaker 8: their prior to calls, but they did say that going

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Speaker 8: into early twenty twenty six, there will be some impact

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Speaker 8: there for them. And the reason why their margins have

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Speaker 8: been holding up and coming in better than expected, and

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Speaker 8: their margins are low, but it's because of the fact

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Speaker 8: that their mix of business being more private label, which

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Speaker 8: is higher margin, is helping to bolster those margins.

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Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple Corplay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: JM Smucker Company s JM is the ticker symbol. They're

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Speaker 2: in Orville, Ohio. Stock is trading radion one hundred dollars

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Speaker 2: to share. It's down three percent today, down eight percent

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Speaker 2: year to date. It's got a market cap about eleven

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Speaker 2: billion dollars. Don't look at that company too often here,

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Speaker 2: but they reported numbers. They lowered the top end of

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Speaker 2: their four year guidance after the company opted to forego

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Speaker 2: a planned price increase on coffee in the wake of

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Speaker 2: tarafreleef from the Trump administration.

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Speaker 5: Let's get the latest on this name and on some

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Speaker 5: of the other food companies. Diana Roe set up.

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Speaker 2: Heying Yeah, consumer staples analysts for Bloomberg Intelligence journings live

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Speaker 2: here in our Bloomberg Interactive studio, all the way from.

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Speaker 5: The tenth floor.

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Speaker 2: From the tenth floor, boy, that's a long walk now,

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Speaker 2: because you guys used to be just one floor away.

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Speaker 2: We could just stop on the floor and you guys

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Speaker 2: come running up to help us out. Okay, talk to

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Speaker 2: us about Jim Smuckers. This is jelly, this is coffee

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Speaker 2: maker Smuckers. What's going on the.

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Speaker 5: Food as well?

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Speaker 9: You know, pet snacks and cat food. So basically, I

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Speaker 9: mean it was it was all right. There were some

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Speaker 9: pull some puts and takes for the quarter. There's some

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Speaker 9: signs of stabilization, but it doesn't seem that it's there yet.

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Speaker 9: It's it's similar to other package food companies that we

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Speaker 9: are seeing in the space. It's always a second half

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Speaker 9: or the next six month story when it's gonna get

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Speaker 9: you know, growth is gonna happen, and it really doesn't happen.

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Speaker 9: So you know, people are starting to lose patients on that.

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Speaker 2: So specifically as it relates to the tariffs, they, like

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Speaker 2: a lot of your companies, they're just telling you what

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Speaker 2: the number is.

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Speaker 5: So what's their their tariff cost? I guess for the period.

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Speaker 9: Yeah, so right now they're saying that for fiscal twenty

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Speaker 9: twenty six, it's gonna be about seventy five million dollars

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Speaker 9: even include you know, excluding that tariff relief that they

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Speaker 9: are experienced experience in which is you know the reason

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Speaker 9: why they're not going to increase prices for the third

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Speaker 9: time this year.

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Speaker 5: So they have been raising prices on coffee.

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Speaker 9: They have been raising prices on coffee. This is a

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Speaker 9: category that is very passed through category for Smucker. The

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Speaker 9: problem with that is that competitiveness is a little bit

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Speaker 9: you know, declining compared to private label, so they're trying

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Speaker 9: to you know, forego some of the margin you know,

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Speaker 9: recouped to be able to be more competitive.

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Speaker 2: Is that what most of the companies are doing, the

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Speaker 2: package goods companies are they trying to take as much

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Speaker 2: as they can in their margin and then pass the

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Speaker 2: rest along the consumers.

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Speaker 9: Well, it depends on the category. For coffee, this is

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Speaker 9: definitely normal for them. They tend to be also a

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Speaker 9: category leader, so it kind of you know, they're they're

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Speaker 9: you know, they tend to to to say what, you know,

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Speaker 9: what the prices are going to be. But some of

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Speaker 9: the other package food companies that we have seen, they

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Speaker 9: take some margin head they try to are not putting

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Speaker 9: that on the consumer because they have been increasing prices

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Speaker 9: for the past couple of years, so they already think

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Speaker 9: that lasticity is getting there.

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Speaker 5: Right, So what.

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Speaker 2: Are these companies like smockers. What are they saying about

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Speaker 2: the consumer out there? How is the consumer? Are they

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Speaker 2: switching down? Are they more price sensitive than usual and

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Speaker 2: maybe switching to store product store brands.

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Speaker 9: Yes, So we're seeing a private label to get some

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Speaker 9: market share in the past six to eight months, and

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Speaker 9: that obviously has been a headwind for packaged food companies.

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Speaker 9: They're becoming more competitive, not necessarily Smucker, but you know,

437
00:23:47,720 --> 00:23:51,480
Speaker 9: we're seeing others such as Campbell's and The Light saying

438
00:23:51,520 --> 00:23:54,080
Speaker 9: that they're going to be more price competitive in twenty

439
00:23:54,119 --> 00:23:56,960
Speaker 9: twenty six. So we should probably experience a little bit

440
00:23:57,000 --> 00:24:01,120
Speaker 9: more of you know, mut at sales growth and margin contraction.

441
00:24:01,680 --> 00:24:06,199
Speaker 2: So you also follow the post company, right, tell me,

442
00:24:06,359 --> 00:24:08,600
Speaker 2: just remind me about their products.

443
00:24:08,640 --> 00:24:10,440
Speaker 5: I mean, that's that's primarily Cereal.

444
00:24:10,280 --> 00:24:15,399
Speaker 9: That's Premier Cereal. They also bought their pet you know

445
00:24:15,600 --> 00:24:19,000
Speaker 9: category from Smucker that has not done so well.

446
00:24:19,720 --> 00:24:20,480
Speaker 7: And they also have.

447
00:24:20,560 --> 00:24:24,960
Speaker 9: Some of the you know, like eggs, eggs product side

448
00:24:24,960 --> 00:24:27,720
Speaker 9: dishes and the like, and that has been a little

449
00:24:27,720 --> 00:24:30,960
Speaker 9: bit on the on the upswing, because again that's another

450
00:24:31,000 --> 00:24:34,560
Speaker 9: commodity that they can pass through price increases and they

451
00:24:34,560 --> 00:24:36,960
Speaker 9: have experienced that and they have been able to upset

452
00:24:37,240 --> 00:24:40,080
Speaker 9: some of the declines from cereal and even pet food.

453
00:24:40,480 --> 00:24:43,520
Speaker 2: So if you're a if you're doing coffee or even cocoa,

454
00:24:43,600 --> 00:24:46,919
Speaker 2: that's just the commodity and those in commodity, those prices

455
00:24:46,920 --> 00:24:48,760
Speaker 2: have been going up because there's been droughts in some

456
00:24:48,800 --> 00:24:51,160
Speaker 2: of the coffee growing places and cocoa growing places around

457
00:24:51,200 --> 00:24:55,199
Speaker 2: the world. So if you're smuckers, you just pass it along, right,

458
00:24:55,240 --> 00:24:56,919
Speaker 2: I mean, it's just if your commodity costs are going

459
00:24:57,040 --> 00:24:58,000
Speaker 2: you just got to pass out along.

460
00:24:58,240 --> 00:25:01,680
Speaker 9: Yes, and that is obviously the exact.

461
00:25:00,760 --> 00:25:03,679
Speaker 5: When coffee comes down. Did they cut the prices?

462
00:25:03,800 --> 00:25:08,120
Speaker 9: Yes, they actually do, which is you know, they anticipate

463
00:25:08,200 --> 00:25:11,280
Speaker 9: or they hope that, you know, price increases stop so

464
00:25:11,320 --> 00:25:14,720
Speaker 9: they can actually become more competitive. But we'll see. It's again,

465
00:25:14,800 --> 00:25:19,280
Speaker 9: it's a second quarter, second half of the year story.

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00:25:19,320 --> 00:25:19,560
Speaker 5: Now.

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