1 00:00:00,280 --> 00:00:11,440 Speaker 1: Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,520 --> 00:00:13,600 Speaker 1: with Scarletfoo and Paul Sweeney. 3 00:00:13,680 --> 00:00:15,760 Speaker 2: How do you think the FED is looking at tariffs? 4 00:00:15,960 --> 00:00:17,120 Speaker 2: The uncertainty of terriffs. 5 00:00:17,239 --> 00:00:20,080 Speaker 3: Let's take a look at the sectors and how they performed. 6 00:00:19,720 --> 00:00:22,200 Speaker 2: A lot of investors getting whipsaled every day by news. 7 00:00:22,079 --> 00:00:26,120 Speaker 1: Events, breaking market headlines, and corporate news from across the globe. 8 00:00:26,239 --> 00:00:28,760 Speaker 3: Could we see a market disruption of market event? 9 00:00:28,920 --> 00:00:30,960 Speaker 2: So people just too exuberant out there? 10 00:00:31,080 --> 00:00:33,640 Speaker 3: You see some so called low quality stocks driving this 11 00:00:33,720 --> 00:00:34,480 Speaker 3: short term rally. 12 00:00:34,520 --> 00:00:39,320 Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, 13 00:00:39,479 --> 00:00:41,400 Speaker 1: YouTube and Bloomberg Originals. 14 00:00:42,600 --> 00:00:44,879 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:44,880 --> 00:00:47,199 Speaker 2: business story is impacting Wall Street and the global markets. 16 00:00:47,400 --> 00:00:49,680 Speaker 3: Each and every week we provide in depth research and 17 00:00:49,760 --> 00:00:51,599 Speaker 3: data on some of the two thousand companies and one 18 00:00:51,680 --> 00:00:54,440 Speaker 3: hundred and thirty industries are analysts cover worldwide Today? 19 00:00:54,480 --> 00:00:56,400 Speaker 2: Well, look at why the retailer coals rates is full 20 00:00:56,480 --> 00:00:58,280 Speaker 2: year outlook for the second straight quarter. 21 00:00:58,400 --> 00:01:00,720 Speaker 3: Plus a look at why travelers may be eyeing similar 22 00:01:00,720 --> 00:01:02,680 Speaker 3: spending for vacations in twenty twenty six. 23 00:01:02,920 --> 00:01:05,479 Speaker 2: First, we move next to some news in the biotech space. 24 00:01:05,560 --> 00:01:07,440 Speaker 3: This week, we heard that a pill version of Danish 25 00:01:07,480 --> 00:01:10,840 Speaker 3: drug maker Novo Nordisk's ozempic failed to slow the progression 26 00:01:10,840 --> 00:01:12,600 Speaker 3: of Alzheimer's in a pair of studies. 27 00:01:12,800 --> 00:01:15,840 Speaker 2: Nova said this was based on a cognitive assessment for 28 00:01:15,959 --> 00:01:18,240 Speaker 2: patients who took the medicine. The drug maker will now 29 00:01:18,280 --> 00:01:21,080 Speaker 2: discontinue a plan one year extension of the studies. 30 00:01:21,120 --> 00:01:23,759 Speaker 3: As a result, Novastock plummeted to its lowest in more 31 00:01:23,760 --> 00:01:26,920 Speaker 3: than four years. We were joined by Sam Fazzelli, Bloomberg Intelligence, 32 00:01:26,959 --> 00:01:30,119 Speaker 3: Director of Research for Global Industries and senior pharmaceuticals analysts. 33 00:01:30,160 --> 00:01:32,840 Speaker 2: We first asked Sam to break down Nova's recent studies. 34 00:01:33,360 --> 00:01:37,200 Speaker 4: Is not about OBCD. It's about a drug, semaglutide in 35 00:01:37,280 --> 00:01:41,600 Speaker 4: a pill form that they've tested in Alzheimer's disease. And 36 00:01:41,880 --> 00:01:44,640 Speaker 4: the theory was, and there was some evidence that people 37 00:01:44,640 --> 00:01:48,000 Speaker 4: who were taking the very first version of the GLP 38 00:01:48,080 --> 00:01:52,320 Speaker 4: one brug so victosa or liro glue tide, they had 39 00:01:52,360 --> 00:01:56,600 Speaker 4: a lower risk of developing Alzheimer's when you looked at 40 00:01:56,800 --> 00:02:00,840 Speaker 4: historic or rect prospective data and there's animal models, et cetera. 41 00:02:00,920 --> 00:02:03,720 Speaker 4: So they thought that it's worth a try and it 42 00:02:03,720 --> 00:02:07,320 Speaker 4: didn't work out. They said that they're seeing some impacts 43 00:02:07,360 --> 00:02:10,399 Speaker 4: in some biomarkers, et cetera. And we'll find out next 44 00:02:10,440 --> 00:02:14,160 Speaker 4: week what biomarkers. But the trial didn't work out. And 45 00:02:14,560 --> 00:02:17,560 Speaker 4: the question here is was the theory wrong or is 46 00:02:17,600 --> 00:02:20,120 Speaker 4: the drug not good enough? Is it pill enough? And 47 00:02:20,240 --> 00:02:22,839 Speaker 4: we know the pill doesn't do as well in obesity 48 00:02:23,120 --> 00:02:25,760 Speaker 4: as the injection. Should they have tested the injection? 49 00:02:27,080 --> 00:02:29,640 Speaker 3: That's a good question. And you mentioned that the ingredient 50 00:02:29,680 --> 00:02:32,600 Speaker 3: here that we're paying attention to is some maglitude, which 51 00:02:32,680 --> 00:02:35,160 Speaker 3: I hope I'm pronouncing correctly there. Does that mean that 52 00:02:35,200 --> 00:02:37,840 Speaker 3: this ingredient and Alzheimer's are just a no go from 53 00:02:37,880 --> 00:02:39,840 Speaker 3: here on out? Or does there need to be more 54 00:02:39,840 --> 00:02:41,240 Speaker 3: testing before we can determine that? 55 00:02:42,120 --> 00:02:43,880 Speaker 4: Yeah, there needs to be more testing, But who's going 56 00:02:43,919 --> 00:02:47,640 Speaker 4: to do that? I mean, having failed, now, who's going 57 00:02:47,680 --> 00:02:51,160 Speaker 4: to put the money into test it? Now? Linly does 58 00:02:51,240 --> 00:02:55,239 Speaker 4: have an Alzheimer's business in a completely different with different 59 00:02:55,240 --> 00:02:59,040 Speaker 4: set of drugs, and they have a more party product 60 00:02:59,360 --> 00:03:04,440 Speaker 4: once weekly with a relatively easily administered pen that would 61 00:03:04,440 --> 00:03:07,560 Speaker 4: be interested to see whether that helps, and you know, 62 00:03:07,800 --> 00:03:09,560 Speaker 4: so that you get more much more drug in the 63 00:03:09,560 --> 00:03:12,360 Speaker 4: body or maybe redesign it a bit. So it really 64 00:03:12,360 --> 00:03:15,600 Speaker 4: does depend on how much appetite for risk these companies have. 65 00:03:15,919 --> 00:03:19,480 Speaker 4: And literally now with just over literally just over trillion 66 00:03:19,480 --> 00:03:21,640 Speaker 4: dollar market cap, maybe they should give it a go. 67 00:03:22,639 --> 00:03:24,880 Speaker 4: You know, it would be magic if this thing, It 68 00:03:24,919 --> 00:03:27,440 Speaker 4: literally would be magic if this thing just helped so 69 00:03:27,440 --> 00:03:28,560 Speaker 4: many different diseases. 70 00:03:29,280 --> 00:03:31,720 Speaker 2: Sam talk to us about just the market for dementia. 71 00:03:32,480 --> 00:03:34,839 Speaker 2: Alzheimer's is one one part of it. I would think 72 00:03:34,920 --> 00:03:37,839 Speaker 2: that's a it's a big market and be it. It's 73 00:03:37,880 --> 00:03:40,080 Speaker 2: got to be a growing market with people living longer. 74 00:03:40,120 --> 00:03:42,200 Speaker 2: How do you guys think about it and and how 75 00:03:42,200 --> 00:03:42,640 Speaker 2: do you play it? 76 00:03:42,640 --> 00:03:45,960 Speaker 4: If you're an investor, Yeah, it's it's it is a 77 00:03:46,200 --> 00:03:50,400 Speaker 4: significant societal issue, number one. And you know, I think 78 00:03:50,400 --> 00:03:53,880 Speaker 4: there are many, not many families who would say that 79 00:03:53,960 --> 00:03:56,280 Speaker 4: they haven't experienced it. They have all the people in 80 00:03:56,320 --> 00:04:02,600 Speaker 4: their in their extended family. So the market has humongous potential. 81 00:04:02,680 --> 00:04:05,560 Speaker 4: But you need drugs that actually treat the disease. Remember, 82 00:04:05,560 --> 00:04:09,839 Speaker 4: by the time you have Alzheimer's, I eat a full 83 00:04:09,920 --> 00:04:13,520 Speaker 4: blown dementia of the Alzheimer's it's a bit late. That 84 00:04:13,640 --> 00:04:16,240 Speaker 4: means that a lot that's already happened, So you need 85 00:04:16,279 --> 00:04:19,919 Speaker 4: to go early, long expensive trials, and Lily is doing 86 00:04:19,920 --> 00:04:23,000 Speaker 4: that with their assets, So fingers crossed, we'll find out 87 00:04:23,000 --> 00:04:24,560 Speaker 4: in the next two or three years where they're going 88 00:04:24,560 --> 00:04:27,440 Speaker 4: early with these assets. Russia is doing it too. It 89 00:04:27,520 --> 00:04:29,720 Speaker 4: would be a beneficial right, I. 90 00:04:29,680 --> 00:04:32,320 Speaker 3: Mean, the tests with the pillar form of ozambic was 91 00:04:32,320 --> 00:04:34,839 Speaker 3: definitely a lottery ticket. If it worked, great, If not, 92 00:04:34,960 --> 00:04:37,839 Speaker 3: we're back to the drawing board. Are there any effective 93 00:04:37,880 --> 00:04:41,040 Speaker 3: treatments right now against dementia or Alzheimer's? 94 00:04:42,120 --> 00:04:44,840 Speaker 4: Well, by effective, I mean it's tough to say, but 95 00:04:44,920 --> 00:04:48,480 Speaker 4: there are drugs that lower this thing that is viewed 96 00:04:48,520 --> 00:04:53,120 Speaker 4: as a critical part of the Alzheimer's disease, which amyloid 97 00:04:53,160 --> 00:04:57,200 Speaker 4: plaques in your brain. If they do lower it, Lily's 98 00:04:57,200 --> 00:05:00,400 Speaker 4: got that drug, Biogen's got an equivalent drug, or she's 99 00:05:00,400 --> 00:05:05,520 Speaker 4: trying a similar approach, and you do slow down the degeneration. 100 00:05:05,880 --> 00:05:08,160 Speaker 4: You don't stop it, you slow it down. So what 101 00:05:08,200 --> 00:05:11,280 Speaker 4: we really want is to stop people getting to that degeneration. 102 00:05:11,560 --> 00:05:16,120 Speaker 4: Try and get them before they have full grown Alzheimer's 103 00:05:16,240 --> 00:05:19,479 Speaker 4: or dementia, so that's called mild cognitive impairerment. Try and 104 00:05:19,520 --> 00:05:22,320 Speaker 4: slow that down to give them another ten, twelve, twenty 105 00:05:22,400 --> 00:05:24,760 Speaker 4: years of dignified life. 106 00:05:25,839 --> 00:05:28,400 Speaker 2: So where do you think we are on a time 107 00:05:28,440 --> 00:05:32,000 Speaker 2: frame for something like that, sam Is that measured in 108 00:05:32,040 --> 00:05:33,800 Speaker 2: a couple of years or more than that? 109 00:05:34,760 --> 00:05:38,840 Speaker 4: Well, so Lily is literally trying that and we'll find 110 00:05:38,880 --> 00:05:42,320 Speaker 4: out whether and they have the better rug in this space. 111 00:05:42,360 --> 00:05:46,040 Speaker 4: So we'll find out whether in the next two or 112 00:05:46,080 --> 00:05:48,359 Speaker 4: three years. Do you remember, these things are trials that 113 00:05:48,400 --> 00:05:51,520 Speaker 4: need to be run until you start seeing a difference. 114 00:05:52,560 --> 00:05:55,360 Speaker 4: They get that to that point, and of course then 115 00:05:55,520 --> 00:05:57,400 Speaker 4: society has to decide, well, how we're going to pay 116 00:05:57,400 --> 00:06:01,120 Speaker 4: for this. How many people because there's a lot our market, right, 117 00:06:01,560 --> 00:06:04,159 Speaker 4: how many people are we going to want to treat 118 00:06:04,560 --> 00:06:06,800 Speaker 4: with the prices of these drugs whatever they are, even 119 00:06:06,839 --> 00:06:09,520 Speaker 4: if it's ten thousand dollars a year, right, and they 120 00:06:09,520 --> 00:06:12,280 Speaker 4: are on their way to becoming worse, and we want 121 00:06:12,320 --> 00:06:14,960 Speaker 4: to slow that down. You have ten million people, I mean, 122 00:06:15,000 --> 00:06:18,680 Speaker 4: this could be similar in terms of value to the 123 00:06:18,720 --> 00:06:22,039 Speaker 4: obesity market. But you need the drug to do that. 124 00:06:22,240 --> 00:06:25,520 Speaker 4: So let's wait and see. And RASH has got a 125 00:06:25,560 --> 00:06:27,159 Speaker 4: new way of trying to do it, and they're going 126 00:06:27,240 --> 00:06:29,360 Speaker 4: to go again and also to phase three to test 127 00:06:29,400 --> 00:06:29,760 Speaker 4: that out. 128 00:06:29,960 --> 00:06:32,599 Speaker 3: Our thanks to Sam Fazelli, Bloomberg Intelligence, director of Research 129 00:06:32,640 --> 00:06:34,960 Speaker 3: for Global Industries and senior pharmaceuticals analysts. 130 00:06:35,080 --> 00:06:36,800 Speaker 2: We move next to the restaurant industry. 131 00:06:37,080 --> 00:06:40,039 Speaker 3: Bloomberg Intelligence will release data for November restaurant sales in 132 00:06:40,080 --> 00:06:43,640 Speaker 3: early December, and according to bi US, restaurant same store 133 00:06:43,680 --> 00:06:46,039 Speaker 3: sales rose seven tens of one percent in October but 134 00:06:46,120 --> 00:06:48,400 Speaker 3: could drop in November because of the government shutdown. 135 00:06:48,680 --> 00:06:51,080 Speaker 2: For more on the industry, I was joined by Michael Halen, 136 00:06:51,120 --> 00:06:54,280 Speaker 2: Bloomberg Intelligence, Senior restaurant and food service analyst. I first 137 00:06:54,320 --> 00:06:56,760 Speaker 2: asked Michael to talk to us about how restaurants are 138 00:06:56,800 --> 00:06:59,000 Speaker 2: doing and whether it depends on the segment of the 139 00:06:59,040 --> 00:06:59,919 Speaker 2: market they're targeting. 140 00:07:00,600 --> 00:07:02,120 Speaker 5: That's definitely part of it. 141 00:07:02,200 --> 00:07:05,880 Speaker 6: We saw that in last month's data find dining had 142 00:07:05,920 --> 00:07:10,280 Speaker 6: a really nice rebound, and I think part of it 143 00:07:10,320 --> 00:07:13,800 Speaker 6: is because they're catering to hire income consumers who own 144 00:07:13,880 --> 00:07:17,480 Speaker 6: assets and are feeling pretty good about things moving forward. 145 00:07:18,000 --> 00:07:20,880 Speaker 6: Right now, you know November is going to be a 146 00:07:20,880 --> 00:07:24,640 Speaker 6: tough month. There's no doubt about it. The government shut 147 00:07:24,680 --> 00:07:27,680 Speaker 6: down has definitely impacted sales and traffic for the chains 148 00:07:27,680 --> 00:07:32,760 Speaker 6: we cover, especially in the DMV area as well as 149 00:07:32,840 --> 00:07:35,840 Speaker 6: in the South where there's a lot of government workers. Also, 150 00:07:36,600 --> 00:07:41,760 Speaker 6: last November restaurant sales had a nice boost from the election, 151 00:07:42,360 --> 00:07:43,040 Speaker 6: and so we're going to. 152 00:07:43,040 --> 00:07:44,600 Speaker 5: Be lapping tough comps. 153 00:07:44,640 --> 00:07:50,760 Speaker 6: So November is not looking great, but things should bounce 154 00:07:51,080 --> 00:07:53,880 Speaker 6: back a little bit here in December. And we're not 155 00:07:54,000 --> 00:07:57,440 Speaker 6: crazy bullish, but we're more bullish about the first half 156 00:07:57,520 --> 00:07:58,160 Speaker 6: of next year. 157 00:07:58,480 --> 00:08:00,920 Speaker 2: Let's start with quick quick service dining. Talk to just 158 00:08:01,000 --> 00:08:03,360 Speaker 2: about that marketplace. I think back to McDonald's of the 159 00:08:03,400 --> 00:08:05,800 Speaker 2: world and so on, how's that varing. 160 00:08:06,240 --> 00:08:08,920 Speaker 5: Quick service had a really difficult first half of the year. 161 00:08:08,960 --> 00:08:11,360 Speaker 6: They were lapping strong comps and they and they kind 162 00:08:11,400 --> 00:08:14,720 Speaker 6: of lost their way when it came to value, right. 163 00:08:14,760 --> 00:08:17,360 Speaker 5: They just had implemented too big of. 164 00:08:17,360 --> 00:08:20,720 Speaker 6: Price increases over the last few years, and customers started 165 00:08:20,720 --> 00:08:23,840 Speaker 6: to push back, especially low income consumers who have been 166 00:08:24,280 --> 00:08:27,240 Speaker 6: you know, who are really impacted by inflation to a 167 00:08:27,320 --> 00:08:30,440 Speaker 6: much greater degree than middle and higher income consumers. So 168 00:08:31,320 --> 00:08:34,200 Speaker 6: the first half was difficult, but here in the second 169 00:08:34,200 --> 00:08:37,079 Speaker 6: half of the year, things have gotten better, largely because 170 00:08:37,280 --> 00:08:41,280 Speaker 6: they've re established their value propositions. You know, McDonald's has 171 00:08:42,360 --> 00:08:46,000 Speaker 6: revamped its dollar menu this year. They also reintroduced snack 172 00:08:46,000 --> 00:08:49,720 Speaker 6: wraps out a three dollars price point, which have boosted 173 00:08:49,800 --> 00:08:54,120 Speaker 6: checks by you know, people adding them on to their orders, 174 00:08:54,120 --> 00:08:57,120 Speaker 6: as well as bringing in some low income consumer traffic. 175 00:08:57,200 --> 00:09:00,160 Speaker 5: But you know, low income consumers are pulling back at 176 00:09:00,200 --> 00:09:01,600 Speaker 5: a pretty big rate. 177 00:09:01,840 --> 00:09:04,640 Speaker 6: You know, we think part of that is the snap 178 00:09:04,800 --> 00:09:06,319 Speaker 6: benefit pullback. 179 00:09:06,440 --> 00:09:07,839 Speaker 5: But they've been able to. 180 00:09:07,760 --> 00:09:11,000 Speaker 6: Bring in some higher income consumers and middle income consumers. 181 00:09:11,040 --> 00:09:13,760 Speaker 5: So things are starting to look better. 182 00:09:13,960 --> 00:09:16,440 Speaker 6: McDonald's especially, I mean McDonald's is going to be lapping 183 00:09:16,440 --> 00:09:18,719 Speaker 6: the eat Coli or right now is lapping the eat 184 00:09:18,760 --> 00:09:22,360 Speaker 6: colip about them from last year, and so you know, 185 00:09:22,440 --> 00:09:24,880 Speaker 6: they're the eight hundred pound gorilla. And I think good 186 00:09:24,920 --> 00:09:27,400 Speaker 6: results out of McDonald's over the next few quarters should 187 00:09:27,440 --> 00:09:29,800 Speaker 6: boost the entire category. 188 00:09:30,040 --> 00:09:32,160 Speaker 2: How about the cost of beef, which you know consumers 189 00:09:32,200 --> 00:09:35,000 Speaker 2: complain about across the board. I know companies are dealing 190 00:09:35,040 --> 00:09:36,840 Speaker 2: with it, and what I understand is we're not going 191 00:09:36,880 --> 00:09:39,480 Speaker 2: to see a material improvement in the cattle herd till 192 00:09:39,480 --> 00:09:42,240 Speaker 2: maybe twenty twenty eight. So how does that factor into 193 00:09:42,320 --> 00:09:44,800 Speaker 2: the profit margins of all these restaurants. 194 00:09:45,559 --> 00:09:49,760 Speaker 6: The restaurants that are impacted the most are you know, 195 00:09:50,080 --> 00:09:55,560 Speaker 6: burger chains like Shakeshack, or steakhouses like Texas Roadhouse that 196 00:09:55,640 --> 00:09:58,400 Speaker 6: own and operate all of their stores. You know, to 197 00:09:58,440 --> 00:10:01,480 Speaker 6: your point, beef inflation for these chains is going to 198 00:10:01,480 --> 00:10:04,880 Speaker 6: be in the mid teens in the fourth quarter, so yeah. 199 00:10:04,720 --> 00:10:05,600 Speaker 5: Yeah, very high. 200 00:10:05,600 --> 00:10:09,679 Speaker 6: So definitely a lot of margin pressure for those chains. 201 00:10:10,800 --> 00:10:10,960 Speaker 2: You know. 202 00:10:11,040 --> 00:10:14,640 Speaker 6: Luckily, those two chains have driven traffic as of late 203 00:10:14,920 --> 00:10:18,240 Speaker 6: into the stores which you know, and driven higher sales 204 00:10:18,240 --> 00:10:20,840 Speaker 6: and been able to pass along price increases and that 205 00:10:20,880 --> 00:10:23,560 Speaker 6: has kind of helped their operating leverage, which has helped 206 00:10:23,600 --> 00:10:25,640 Speaker 6: offset the higher costs. 207 00:10:26,120 --> 00:10:27,040 Speaker 5: For the burger chains. 208 00:10:27,080 --> 00:10:29,320 Speaker 6: They there's less impact for the chains that we cover 209 00:10:29,360 --> 00:10:33,280 Speaker 6: for McDonald's, Wendy's, Jack in the Box because they're largely franchised, 210 00:10:33,280 --> 00:10:35,880 Speaker 6: so that the franchisees are the ones footing the bill 211 00:10:35,960 --> 00:10:37,080 Speaker 6: for the higher beef costs. 212 00:10:37,160 --> 00:10:40,920 Speaker 2: Why, like, why do not all changs do like the 213 00:10:41,000 --> 00:10:44,800 Speaker 2: McDonald's franchise e model. What's the benefits of franchising or 214 00:10:44,800 --> 00:10:46,760 Speaker 2: what's the benefit of owning versus a franchise. I think 215 00:10:46,760 --> 00:10:48,679 Speaker 2: I thought I would. I saw the movie. I think 216 00:10:48,720 --> 00:10:51,720 Speaker 2: I understand the economics and franchising. It seems pretty good. 217 00:10:52,080 --> 00:10:55,240 Speaker 6: Listen, the franchise business, that's a great business, you know, 218 00:10:55,280 --> 00:10:58,000 Speaker 6: and from where I sit as an analyst, you know, 219 00:10:58,040 --> 00:11:00,120 Speaker 6: we love it. It's easier to predict the earnings and 220 00:11:00,160 --> 00:11:03,720 Speaker 6: the free cash flow. It's it's a much more steady 221 00:11:03,760 --> 00:11:07,640 Speaker 6: business model. Franchising eliminates a lot of the operating leverage 222 00:11:07,640 --> 00:11:11,920 Speaker 6: and thus the risk to your margins out of the business. 223 00:11:12,000 --> 00:11:14,280 Speaker 5: Right. But if you are. 224 00:11:14,240 --> 00:11:18,679 Speaker 6: Running a full service restaurant chain where operations is very 225 00:11:18,840 --> 00:11:24,040 Speaker 6: core to your business, think Darden, think Texas Roadhouse, you 226 00:11:24,160 --> 00:11:26,559 Speaker 6: want to own and operate your source because you want 227 00:11:26,559 --> 00:11:28,280 Speaker 6: to have control over those operations. 228 00:11:28,320 --> 00:11:29,199 Speaker 5: You want to make sure. 229 00:11:29,040 --> 00:11:32,600 Speaker 6: People are getting a good experience, and they're just much 230 00:11:32,600 --> 00:11:36,040 Speaker 6: harder to run than a McDonald's or a Wendy's. And 231 00:11:36,080 --> 00:11:38,880 Speaker 6: then I'd say, on the last case would be somebody 232 00:11:38,920 --> 00:11:43,160 Speaker 6: like shake Shack or wink Stop or Cava. You know, 233 00:11:43,200 --> 00:11:47,840 Speaker 6: when your cash on cash returns are forty fifty sixty percent, 234 00:11:49,080 --> 00:11:50,840 Speaker 6: we don't think it's a bad thing to be greedy 235 00:11:50,880 --> 00:11:52,959 Speaker 6: and you want to open up as many stores as 236 00:11:53,000 --> 00:11:54,240 Speaker 6: possible are. 237 00:11:54,120 --> 00:11:57,080 Speaker 3: Thanks to Michael Helen, who covers restaurants and food services 238 00:11:57,080 --> 00:11:59,640 Speaker 3: for Bloomberg Intelligence. Coming up, look at why the tech 239 00:11:59,679 --> 00:12:02,320 Speaker 3: company Cisco maybe on a Goldilocks growth path. 240 00:12:02,480 --> 00:12:05,360 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 241 00:12:05,360 --> 00:12:07,520 Speaker 2: depth research and data on two thousand companies and one 242 00:12:07,600 --> 00:12:08,680 Speaker 2: hundred and thirty industries. 243 00:12:08,800 --> 00:12:11,840 Speaker 3: You can access Bloomberg Intelligence via Bigo on the terminal. 244 00:12:11,920 --> 00:12:13,080 Speaker 3: I'm Scarlett Foo. 245 00:12:12,920 --> 00:12:15,040 Speaker 2: And I'm Paul Sweeney, and this is Bloomberg. 246 00:12:20,400 --> 00:12:24,920 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 247 00:12:25,240 --> 00:12:26,560 Speaker 1: on Bloomberg Radio. 248 00:12:27,600 --> 00:12:30,120 Speaker 2: We moved next to more earnings in the retail sector 249 00:12:30,240 --> 00:12:32,280 Speaker 2: this week. We got third quarter earnings from Cohle's and 250 00:12:32,400 --> 00:12:35,640 Speaker 2: Abercrombing and Finch Coles raised its full year outlook for 251 00:12:35,679 --> 00:12:38,600 Speaker 2: the second straight quarter. It's a signed the chief executive officer, 252 00:12:38,640 --> 00:12:42,199 Speaker 2: Michael Bender, is helping to stabilize performance at the struggling retailer. 253 00:12:42,360 --> 00:12:44,839 Speaker 3: Separately, Abercromi and Fitch raised the low end of its 254 00:12:44,840 --> 00:12:47,719 Speaker 3: full year sales outlook as its Hollister brand continue to 255 00:12:47,760 --> 00:12:51,200 Speaker 3: gain momentum. We are joined by Mary Ross Gilbert Bloomberg Intelligence, 256 00:12:51,240 --> 00:12:53,040 Speaker 3: senior equity analyst covering retail. 257 00:12:53,240 --> 00:12:55,320 Speaker 2: We first asked Mary for her take on Cohle's most 258 00:12:55,320 --> 00:12:56,240 Speaker 2: recent earnings report. 259 00:12:56,640 --> 00:12:59,320 Speaker 7: They've kind of gone back to the basics. What's something 260 00:12:59,559 --> 00:13:02,480 Speaker 7: something that clos has always been known for SO One 261 00:13:02,679 --> 00:13:04,560 Speaker 7: is their private brand. So if you think about some 262 00:13:04,679 --> 00:13:08,240 Speaker 7: of the brands like SO and Juniors, Lauren Conrad for women, 263 00:13:09,000 --> 00:13:12,719 Speaker 7: and they brought those brands back because they actually sacrifice 264 00:13:12,760 --> 00:13:17,160 Speaker 7: some of those brands under the prior leadership and replace 265 00:13:17,280 --> 00:13:21,880 Speaker 7: them with some more name brands like Madden Girl, trying 266 00:13:21,920 --> 00:13:26,920 Speaker 7: to really attract the junior shopper there. And now that 267 00:13:26,960 --> 00:13:30,920 Speaker 7: they've brought the private brands back, they brought back petite sizing, 268 00:13:30,920 --> 00:13:33,800 Speaker 7: which was really important to their customer base. Now they're 269 00:13:33,840 --> 00:13:38,120 Speaker 7: really starting to see a recovery. But they're not out 270 00:13:38,120 --> 00:13:40,959 Speaker 7: of the woods yet, Scarlett, as you pointed out, I mean, 271 00:13:40,960 --> 00:13:44,280 Speaker 7: they're really cycling three years of declines, but we are 272 00:13:44,320 --> 00:13:47,800 Speaker 7: seeing encouraging results and given that they actually turned positive 273 00:13:47,920 --> 00:13:50,720 Speaker 7: in the latest month, it looks like they could actually 274 00:13:51,360 --> 00:13:54,800 Speaker 7: reach a break even in the fourth quarter, even though 275 00:13:54,800 --> 00:13:58,199 Speaker 7: they're guiding to a one point seven percent comp sales decline. 276 00:13:58,440 --> 00:14:02,440 Speaker 7: So it's very encouraging to see with Cohle's again not 277 00:14:02,480 --> 00:14:03,839 Speaker 7: out of the woods. And when you look at what's 278 00:14:03,840 --> 00:14:05,720 Speaker 7: going on with SO For, it's now a two billion 279 00:14:05,720 --> 00:14:08,440 Speaker 7: dollar business and as you were sort of highlighting, that 280 00:14:08,480 --> 00:14:10,840 Speaker 7: means they really lost you know, over the last four 281 00:14:10,920 --> 00:14:14,400 Speaker 7: years something like four to five billion in other categories, 282 00:14:14,880 --> 00:14:17,120 Speaker 7: so they have lost market share. We think they're losing 283 00:14:17,160 --> 00:14:20,280 Speaker 7: it to off price and some of the value players 284 00:14:20,320 --> 00:14:23,200 Speaker 7: in the specialty space such as Old. Maybe you know 285 00:14:23,280 --> 00:14:24,440 Speaker 7: a gap brand. 286 00:14:24,600 --> 00:14:26,640 Speaker 3: Mary, I will also want to ask you about Abercomie 287 00:14:26,640 --> 00:14:29,600 Speaker 3: and Fitch. It was the Darling two years ago because 288 00:14:29,640 --> 00:14:32,440 Speaker 3: the new CEO found a way to make the brand 289 00:14:32,520 --> 00:14:35,920 Speaker 3: relevant to a new audience. It was no longer targeting 290 00:14:35,960 --> 00:14:39,200 Speaker 3: teenage boys, for instance, and really targeting young working women. 291 00:14:39,600 --> 00:14:41,760 Speaker 3: But it's had a brutal twenty twenty five, a lot 292 00:14:41,800 --> 00:14:45,800 Speaker 3: of concerns about tariffs perhaps and maybe even a lack 293 00:14:45,840 --> 00:14:49,200 Speaker 3: of fresh ideas in terms of its offerings. What's the 294 00:14:49,320 --> 00:14:51,000 Speaker 3: narrative with Abercomie and Fitch right now? 295 00:14:51,400 --> 00:14:54,440 Speaker 7: Yeah, so Scarlett with Abercrombie and Fitch, their numbers came 296 00:14:54,480 --> 00:14:57,800 Speaker 7: in better than expected. So the namesake brand, as you 297 00:14:57,920 --> 00:15:01,280 Speaker 7: pointed out, I mean that had been double digit increases 298 00:15:01,640 --> 00:15:04,920 Speaker 7: over the last three years, so they're cycling those increases 299 00:15:05,400 --> 00:15:08,360 Speaker 7: and that's why their sales are coming in less than expected. 300 00:15:08,720 --> 00:15:11,800 Speaker 7: But this quarter the comp sales declined. There was about 301 00:15:11,800 --> 00:15:14,600 Speaker 7: three point three percent, so that was better than expected. 302 00:15:15,640 --> 00:15:19,000 Speaker 7: And when you look at Hollister, though, Hollister has been 303 00:15:19,000 --> 00:15:22,840 Speaker 7: coming in ahead of expectations and they've been posting double 304 00:15:22,920 --> 00:15:27,360 Speaker 7: digit increases. So as you were talking about sort of 305 00:15:27,400 --> 00:15:30,400 Speaker 7: the millennial women who really love and also the men, 306 00:15:30,880 --> 00:15:33,080 Speaker 7: but it does tend to favor more of the women 307 00:15:33,240 --> 00:15:37,240 Speaker 7: on the Abercrombie side, on the Hollister side, which really 308 00:15:38,320 --> 00:15:42,440 Speaker 7: caters to gen Z that has been on fire, and 309 00:15:42,560 --> 00:15:45,840 Speaker 7: so that's what's helping to kind of overcome the weakness 310 00:15:45,880 --> 00:15:48,880 Speaker 7: that they're seeing at Abercrombie. But also it's looking like 311 00:15:49,040 --> 00:15:52,320 Speaker 7: Abercrombie could turn positive in the fourth quarter with a 312 00:15:52,400 --> 00:15:55,120 Speaker 7: number of the initiatives that they have in place going 313 00:15:55,200 --> 00:15:58,000 Speaker 7: into the holiday quarter, even though they're cycling some pretty 314 00:15:58,040 --> 00:16:01,280 Speaker 7: strong gains in the prior year and the year before that. 315 00:16:01,680 --> 00:16:04,560 Speaker 3: Are Thanks to Mary Ross Gilbert, Bloomberg Intelligence, senior equity 316 00:16:04,560 --> 00:16:05,960 Speaker 3: analyst who covers retail, we. 317 00:16:06,080 --> 00:16:08,560 Speaker 2: Moved next to some research from Bloomberg Intelligence in the 318 00:16:08,640 --> 00:16:12,280 Speaker 2: tech space. It's titled Cisco and a Golden Locks growth path. 319 00:16:12,640 --> 00:16:15,920 Speaker 3: According to Cisco mayc twenty twenty six, sales above the 320 00:16:15,920 --> 00:16:18,560 Speaker 3: top end of its five to seven percent target, and 321 00:16:18,600 --> 00:16:21,080 Speaker 3: this comes as the company balances strong AI growth with 322 00:16:21,200 --> 00:16:22,160 Speaker 3: networking gains. 323 00:16:22,400 --> 00:16:24,600 Speaker 2: For more on this, we were joined by Wouchinho, Bloomberg 324 00:16:24,600 --> 00:16:26,280 Speaker 2: Intelligence senior technology analyst. 325 00:16:26,480 --> 00:16:28,960 Speaker 3: We began by asking Wooje to break down why Cisco's 326 00:16:28,960 --> 00:16:30,360 Speaker 3: shares have had a good run this year. 327 00:16:30,640 --> 00:16:32,520 Speaker 8: So there's a couple of things driving it. That they're 328 00:16:32,600 --> 00:16:37,960 Speaker 8: actually a massive forty three billion dollar a product upgrade 329 00:16:38,000 --> 00:16:41,400 Speaker 8: cycle that Cisco will potentially benefit from, which is going 330 00:16:41,440 --> 00:16:44,200 Speaker 8: to give them outsize growth in their core networking business. 331 00:16:44,760 --> 00:16:47,120 Speaker 8: But their AI store has actually been a lot better 332 00:16:47,160 --> 00:16:49,960 Speaker 8: than I thought. AI is going to be about three 333 00:16:49,960 --> 00:16:54,160 Speaker 8: billion dollars of sales tripling or three billion dollars in 334 00:16:54,200 --> 00:16:56,440 Speaker 8: sales in fiscal twenty twenty six tripling out of twenty 335 00:16:56,480 --> 00:16:59,360 Speaker 8: twenty five. So there are this goldly locks of good 336 00:16:59,400 --> 00:17:03,080 Speaker 8: AI store as well as an upgrade cycle tailwind. 337 00:17:03,560 --> 00:17:06,399 Speaker 3: Paul was asking Michael Casper earlier about a lot of 338 00:17:06,440 --> 00:17:10,480 Speaker 3: the tech companies issuing debt to pay for their AI buildout. 339 00:17:11,119 --> 00:17:13,760 Speaker 3: What does Cisco's debt profile look like and will it 340 00:17:13,920 --> 00:17:17,040 Speaker 3: also need to sell bonds to fund everything that's doing? 341 00:17:17,880 --> 00:17:21,479 Speaker 8: Yeah, hey' Carlo. So that's one of the great stories 342 00:17:21,520 --> 00:17:25,800 Speaker 8: about about Cisco. I mean, they have roughly about twenty 343 00:17:25,800 --> 00:17:29,600 Speaker 8: billion dollars in debt and roughly thirty billion dollars in cash, 344 00:17:30,119 --> 00:17:34,560 Speaker 8: so look their net cash positive, they don't need to 345 00:17:34,560 --> 00:17:37,240 Speaker 8: take on debt. If anything, they've been very active buyers 346 00:17:37,240 --> 00:17:41,359 Speaker 8: of their stock, very good stewards of the cash, strong 347 00:17:41,440 --> 00:17:45,760 Speaker 8: cash flow profile, and if anything, they're using their cash 348 00:17:45,760 --> 00:17:48,160 Speaker 8: as levers to build up the inventory for the AI 349 00:17:48,200 --> 00:17:49,320 Speaker 8: opportunity that's ahead of them. 350 00:17:49,880 --> 00:17:51,920 Speaker 2: So talk to us about just kind of the growth 351 00:17:52,000 --> 00:17:55,600 Speaker 2: drivers for this company, which what is he looked at 352 00:17:55,640 --> 00:17:58,560 Speaker 2: twenty twenty six, what kind of underpins their top line growth? 353 00:17:58,720 --> 00:18:03,200 Speaker 8: They got it to roughly the top of the top 354 00:18:03,280 --> 00:18:06,240 Speaker 8: end of their four to six percent growth. I think 355 00:18:06,240 --> 00:18:08,119 Speaker 8: they're going to do roughly about seven to eight percent 356 00:18:08,160 --> 00:18:11,000 Speaker 8: growth for this year. So if we think about the 357 00:18:11,320 --> 00:18:14,680 Speaker 8: AI story itself trippling from one billion to three billion, 358 00:18:15,359 --> 00:18:17,640 Speaker 8: that's going to be the incremental growth that gets you 359 00:18:17,680 --> 00:18:20,000 Speaker 8: above to the top end of their revenue growth guidance. 360 00:18:21,000 --> 00:18:24,080 Speaker 8: You know, the way I have networking flashed out right now, 361 00:18:24,600 --> 00:18:28,439 Speaker 8: the networking business, you know, Xai is growing roughly around 362 00:18:28,440 --> 00:18:31,359 Speaker 8: four percent, and that's probably towards the low end and 363 00:18:31,680 --> 00:18:33,960 Speaker 8: quite frankly, if the upgrade's coming stronger than a lot 364 00:18:33,960 --> 00:18:36,680 Speaker 8: better than we think. There's a little bit of upside. 365 00:18:36,720 --> 00:18:39,040 Speaker 8: Now there is a little bit of drag. The security 366 00:18:39,040 --> 00:18:42,200 Speaker 8: business hasn't panned out as as strongly as they hoped, 367 00:18:42,720 --> 00:18:45,880 Speaker 8: primarily because it is going through this business model transition. 368 00:18:46,359 --> 00:18:48,479 Speaker 8: But you know, it would have been a story at 369 00:18:48,480 --> 00:18:52,200 Speaker 8: another time. But the two stories AI as well as 370 00:18:52,200 --> 00:18:55,440 Speaker 8: a core networking upgrade cycle. I mean, that's doing very 371 00:18:55,520 --> 00:18:57,720 Speaker 8: very well in twenty six and if anything, I would 372 00:18:57,800 --> 00:18:59,760 Speaker 8: argue we'd probably be better in twenty twenty seven. 373 00:19:00,720 --> 00:19:03,560 Speaker 3: Is Cisco part of this whole circular deal making, circular 374 00:19:03,600 --> 00:19:08,120 Speaker 3: funding concern that has investors worried that if one company 375 00:19:08,119 --> 00:19:11,040 Speaker 3: in this link stops spending or maybe slows down spending, 376 00:19:11,119 --> 00:19:13,000 Speaker 3: everyone else will get affected. 377 00:19:13,359 --> 00:19:14,280 Speaker 4: To some degree. 378 00:19:14,359 --> 00:19:18,520 Speaker 8: Yeah, Scarlett, And that's why I think if you look 379 00:19:18,560 --> 00:19:20,560 Speaker 8: at some of the AI stories there, it's one of 380 00:19:20,560 --> 00:19:24,480 Speaker 8: the safe bets, right. They are exposed to some of 381 00:19:24,520 --> 00:19:26,879 Speaker 8: the I would say the hyperscale names, but a very 382 00:19:26,920 --> 00:19:29,760 Speaker 8: small exposure to it, as well as some of the 383 00:19:31,240 --> 00:19:34,119 Speaker 8: neo clouds. They do sell some routing products and some 384 00:19:34,160 --> 00:19:38,679 Speaker 8: of the sovereigns. Now, if that business disappears, you know, 385 00:19:39,320 --> 00:19:42,639 Speaker 8: the cashflow story is still well intact. Right, If I 386 00:19:42,680 --> 00:19:46,920 Speaker 8: calculate the amount of AI revenue relative their total total 387 00:19:46,960 --> 00:19:49,800 Speaker 8: revenue base. We're only talking about, you know, six to 388 00:19:49,800 --> 00:19:53,040 Speaker 8: seven percent of total sales, right, So if the AI 389 00:19:53,119 --> 00:19:57,720 Speaker 8: story collapse, I mean, AI evaporates, they're still in very 390 00:19:57,760 --> 00:19:58,320 Speaker 8: good standing. 391 00:19:58,840 --> 00:20:00,920 Speaker 3: Not to mention the fact that they out a dividend too. 392 00:20:00,960 --> 00:20:02,760 Speaker 3: I mean it's not a huge one, but a tech 393 00:20:02,800 --> 00:20:05,679 Speaker 3: company with a two percent dividend yield to something and 394 00:20:05,720 --> 00:20:06,440 Speaker 3: they've been steadying. 395 00:20:06,520 --> 00:20:09,160 Speaker 4: The sock was lower. Yeah, the soccer just to be three. 396 00:20:09,280 --> 00:20:11,600 Speaker 8: So yeah, there we go. I mean, it's not the 397 00:20:11,760 --> 00:20:14,000 Speaker 8: like stock bog backs and a dividendil and an a 398 00:20:14,160 --> 00:20:15,240 Speaker 8: story if it works out. 399 00:20:15,440 --> 00:20:18,600 Speaker 2: Our thanks to Wou Jinho, Bloomberg Intelligence senior technology analyst. 400 00:20:19,040 --> 00:20:21,359 Speaker 2: We move next to the news in the media space. 401 00:20:21,680 --> 00:20:24,200 Speaker 2: US President Donald Trump recently said in a social media 402 00:20:24,240 --> 00:20:27,280 Speaker 2: post that no television networks should be able to expand. 403 00:20:27,359 --> 00:20:30,080 Speaker 3: Trump cited the potential growth of what he considers left 404 00:20:30,080 --> 00:20:32,679 Speaker 3: wing news outlets. Trump's post was in response to a 405 00:20:32,720 --> 00:20:35,800 Speaker 3: NEWSMAC story that said the FCC head Brendan Carr is 406 00:20:35,840 --> 00:20:39,000 Speaker 3: moving to give television networks massive reach and push through 407 00:20:39,000 --> 00:20:41,440 Speaker 3: a merger of Next Our Media Group and TAGNA for 408 00:20:41,560 --> 00:20:41,960 Speaker 3: more on this. 409 00:20:42,000 --> 00:20:46,000 Speaker 2: We were joined by Matthew Shuttenhelm, Bloomberg Intelligence media litigation analyst. 410 00:20:46,160 --> 00:20:48,800 Speaker 3: We began by asking Matthew if he was surprised about 411 00:20:48,800 --> 00:20:50,399 Speaker 3: President Trump's recent comments. 412 00:20:50,680 --> 00:20:53,360 Speaker 9: It's a moderate surprise, So it's it's not a complete 413 00:20:53,400 --> 00:20:59,959 Speaker 9: surprise because Newsmax has participated before the FCC and had 414 00:21:00,000 --> 00:21:02,040 Speaker 9: it has been one of the few voices that said, 415 00:21:02,080 --> 00:21:07,159 Speaker 9: don't do this, don't deregulate this space. And what you 416 00:21:07,280 --> 00:21:10,239 Speaker 9: really see here is President Trump latching on to an 417 00:21:10,320 --> 00:21:15,040 Speaker 9: article written on Newsmax's platform opposing the easing of this 418 00:21:15,160 --> 00:21:19,680 Speaker 9: national ownership cap. What's in play here is that there's 419 00:21:19,880 --> 00:21:24,560 Speaker 9: current FCC regulation says no company can reach more than 420 00:21:24,600 --> 00:21:30,040 Speaker 9: thirty nine percent of US households, and companies like Nextstar 421 00:21:30,560 --> 00:21:33,639 Speaker 9: and Sinclair want to go way beyond thirty nine percent. 422 00:21:33,720 --> 00:21:36,679 Speaker 9: In fact, Nextstar has a pending deal before the FCC. 423 00:21:36,720 --> 00:21:40,800 Speaker 9: They just filed their application last week to acquire Tegna 424 00:21:41,160 --> 00:21:44,800 Speaker 9: that would take them to seventy eighty percent of the country, 425 00:21:44,840 --> 00:21:48,639 Speaker 9: and it depends on the FCC deregulating in this space. 426 00:21:48,680 --> 00:21:54,520 Speaker 9: So Trump latching on to Newsmax's opposition because he's concerned 427 00:21:54,520 --> 00:21:59,360 Speaker 9: about the TV networks growing larger is a concern. It's 428 00:21:59,400 --> 00:22:01,800 Speaker 9: a real risk. I'm not convinced yet that it's going 429 00:22:01,800 --> 00:22:04,760 Speaker 9: to lead to real FCC policy. I think this FCC 430 00:22:04,800 --> 00:22:07,800 Speaker 9: wants to deregulate in this space, and I think there's 431 00:22:07,800 --> 00:22:09,960 Speaker 9: going to be a pushback against Trump's view on this. 432 00:22:10,760 --> 00:22:13,520 Speaker 3: Okay, so the FCC is headed by Brendan Carr, who's 433 00:22:13,600 --> 00:22:16,240 Speaker 3: been very active in making sure that he's out there 434 00:22:16,320 --> 00:22:19,320 Speaker 3: doing the president's bidding. Are you saying that Brendan Carr 435 00:22:19,400 --> 00:22:20,879 Speaker 3: is going to defy President Trump? 436 00:22:21,160 --> 00:22:25,880 Speaker 9: Yeah, So that's the big question here. The FCC used 437 00:22:25,920 --> 00:22:29,199 Speaker 9: to operate as an independent agency, meaning even if the 438 00:22:29,200 --> 00:22:32,200 Speaker 9: President had a view on something, the FCC could could 439 00:22:32,280 --> 00:22:35,480 Speaker 9: chart its own course. That doesn't that's not going to 440 00:22:35,520 --> 00:22:38,720 Speaker 9: work anymore the way this FCC is operating. If the 441 00:22:38,760 --> 00:22:43,159 Speaker 9: President takes a firm view on something, the FCC is 442 00:22:43,240 --> 00:22:46,479 Speaker 9: not going to defy it because effectively, the President can 443 00:22:46,560 --> 00:22:50,159 Speaker 9: fire the FCC chairman then and you know, there's no 444 00:22:50,160 --> 00:22:53,360 Speaker 9: no future job prospect if you defy the president. What 445 00:22:53,400 --> 00:22:56,400 Speaker 9: I'm not convinced about is, you know, this was one 446 00:22:56,680 --> 00:23:00,080 Speaker 9: social media post from President Trump, and you know, talk 447 00:23:00,160 --> 00:23:04,760 Speaker 9: about concerns about letting the broadcast networks ABC, CBS, Fox 448 00:23:04,800 --> 00:23:07,240 Speaker 9: get bigger. What I think there could be now in 449 00:23:07,720 --> 00:23:10,520 Speaker 9: you know, on in back channels, is some education from 450 00:23:10,600 --> 00:23:13,160 Speaker 9: the FCC to the White House that says, hey, easing 451 00:23:13,200 --> 00:23:16,360 Speaker 9: the national ownership cap, it would let Sinclair Next Star 452 00:23:16,560 --> 00:23:19,840 Speaker 9: get bigger, probably, but it doesn't necessarily mean the broadcast 453 00:23:19,920 --> 00:23:23,000 Speaker 9: networks will get bigger. There's still an independent check on 454 00:23:23,040 --> 00:23:27,800 Speaker 9: that even if we ease this this cap. So ultimately, 455 00:23:27,840 --> 00:23:30,800 Speaker 9: if Trump is against this, the SEC is not going 456 00:23:30,800 --> 00:23:33,080 Speaker 9: ahead with it in my view, But I think there's 457 00:23:33,119 --> 00:23:36,199 Speaker 9: still room for Trump's position to evolve on this. 458 00:23:36,840 --> 00:23:39,440 Speaker 2: So, I mean, the reality is, I mean, this is 459 00:23:39,480 --> 00:23:42,639 Speaker 2: an industry, the broadcast television industry that is arguably on 460 00:23:42,760 --> 00:23:46,439 Speaker 2: life support visa VI. Forget about cable television, which itself 461 00:23:46,480 --> 00:23:49,280 Speaker 2: is on life support. They survive that on slot. Now 462 00:23:49,320 --> 00:23:52,320 Speaker 2: it's just all about digital and social media. And I 463 00:23:52,359 --> 00:23:55,959 Speaker 2: would think the industry would have an open would have 464 00:23:56,040 --> 00:23:58,600 Speaker 2: an effective argument not just to the DJ but to 465 00:23:58,640 --> 00:23:59,440 Speaker 2: the President as well. 466 00:24:00,320 --> 00:24:02,679 Speaker 9: I mean, that's the case that the National Association of 467 00:24:02,720 --> 00:24:07,119 Speaker 9: Broadcasters has made to the FCC that these ownership restrictions, 468 00:24:08,080 --> 00:24:10,600 Speaker 9: you know, which come from the nineteen seventies or even 469 00:24:10,680 --> 00:24:13,760 Speaker 9: earlier than that really make no sense in the world 470 00:24:13,880 --> 00:24:17,399 Speaker 9: we live in today, where where so much video that 471 00:24:17,600 --> 00:24:21,000 Speaker 9: is consumed doesn't come from from broadcast, it comes over 472 00:24:21,040 --> 00:24:25,880 Speaker 9: the Internet, and there are no artificial caps on how 473 00:24:25,960 --> 00:24:30,439 Speaker 9: much those companies can reach, and broadcasters are left to 474 00:24:30,480 --> 00:24:33,040 Speaker 9: try to fight with one hand tied behind their back 475 00:24:33,520 --> 00:24:37,000 Speaker 9: with these these you know, ancient FCC rules on the books, 476 00:24:37,320 --> 00:24:41,879 Speaker 9: and the Republicans at the FCC, Brendan Carr included, strongly 477 00:24:41,920 --> 00:24:46,000 Speaker 9: agree with that message. And so it's it's going to 478 00:24:46,000 --> 00:24:48,760 Speaker 9: be I think a little bit of a communication effort 479 00:24:48,840 --> 00:24:51,359 Speaker 9: that needs to happen between the FCC and the White 480 00:24:51,359 --> 00:24:54,680 Speaker 9: House too, and the real question will be how does 481 00:24:54,720 --> 00:24:58,639 Speaker 9: that play out. Does Trump's social media post actually translate 482 00:24:58,680 --> 00:25:02,160 Speaker 9: to real policy. I'm not convinced that it will yet. 483 00:25:02,440 --> 00:25:06,439 Speaker 2: Our thanks to Matthew Schultenhelm, Bloomberg Intelligence media litigation Analyst. 484 00:25:06,600 --> 00:25:09,000 Speaker 3: Coming up, we'll break down corporate earnings at the retailers, 485 00:25:09,040 --> 00:25:10,320 Speaker 3: Calls and Abercrome and Fitch. 486 00:25:10,440 --> 00:25:13,320 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 487 00:25:13,359 --> 00:25:15,479 Speaker 2: depth research and data on two thousand companies and one 488 00:25:15,560 --> 00:25:16,600 Speaker 2: hundred and thirty industries. 489 00:25:16,640 --> 00:25:19,520 Speaker 3: You can access Bloomberg Intelligence through Bigo on the terminal. 490 00:25:19,600 --> 00:25:20,760 Speaker 3: I'm Scarlett Foe. 491 00:25:20,560 --> 00:25:22,560 Speaker 2: And I'm Paul Sweeney, and this is Bloomberg. 492 00:25:30,240 --> 00:25:34,760 Speaker 1: This is Bloomberg Intelligence. With Scarlett Foo and Paul Sweeney 493 00:25:35,080 --> 00:25:36,399 Speaker 1: on Bloomberg Radio. 494 00:25:37,280 --> 00:25:39,359 Speaker 2: We move next to more earnings in the retail sector. 495 00:25:39,520 --> 00:25:41,480 Speaker 2: This week we got third quarter earning some Dick Sporting 496 00:25:41,520 --> 00:25:45,640 Speaker 2: Goods and best Buy. Dick Sporting Goods raised its outlook again, However, 497 00:25:45,720 --> 00:25:48,840 Speaker 2: investors were disappointed by costs related to turning around the 498 00:25:48,840 --> 00:25:50,640 Speaker 2: foot locker chain it recently acquired. 499 00:25:50,800 --> 00:25:53,439 Speaker 3: Separately, best Buy raised its guidance for the current fiscal 500 00:25:53,480 --> 00:25:56,520 Speaker 3: year as demand for the latest consumer tech drove revenue 501 00:25:56,520 --> 00:25:57,600 Speaker 3: and profit last quarter. 502 00:25:57,920 --> 00:25:59,560 Speaker 2: For more on this, we were joined by Lindsay Dutch 503 00:25:59,560 --> 00:26:03,400 Speaker 2: Bloomberg Intelligence Consumer Hardlines senior analysts. Let's start with Dick's 504 00:26:03,359 --> 00:26:06,440 Speaker 2: Sporting Goods. They raised their outlook again, but I guess 505 00:26:06,520 --> 00:26:09,119 Speaker 2: investors are focused on I guess some of the costs 506 00:26:09,119 --> 00:26:11,679 Speaker 2: trying to turn around foot locker. Talk to us about 507 00:26:11,960 --> 00:26:13,359 Speaker 2: Dick Sporting Goods at Lindsay. 508 00:26:13,880 --> 00:26:17,560 Speaker 10: The legacy business remained very strong in the third quarter, 509 00:26:17,720 --> 00:26:21,320 Speaker 10: strong back to school, clear demand momentum heading into the 510 00:26:21,359 --> 00:26:24,560 Speaker 10: fourth quarter. That's where the raised outlook came, it was 511 00:26:24,560 --> 00:26:27,600 Speaker 10: really for the legacy business. But when we look at 512 00:26:27,600 --> 00:26:30,520 Speaker 10: foot Locker, you know, the deal closed early September. The 513 00:26:30,560 --> 00:26:33,280 Speaker 10: outlook for the fourth quarter is mid to high single 514 00:26:33,320 --> 00:26:38,040 Speaker 10: digit same source sales decline. Dix is also looking to 515 00:26:38,160 --> 00:26:42,520 Speaker 10: expedite the turnaround there, which means offloading old inventory steep 516 00:26:42,560 --> 00:26:45,360 Speaker 10: markdowns in that fourth quarter, which is going to really 517 00:26:45,440 --> 00:26:49,080 Speaker 10: hurt the margin as well. So foot Locker, you know, 518 00:26:49,119 --> 00:26:51,119 Speaker 10: needs a lot of work. Fourth quarter is going to 519 00:26:51,160 --> 00:26:54,399 Speaker 10: be weak, and investors are really looking to see how 520 00:26:54,480 --> 00:26:56,359 Speaker 10: quickly they can turn that business around. 521 00:26:56,640 --> 00:26:58,520 Speaker 3: Yeah, and probably they'll need to put some money into 522 00:26:58,560 --> 00:27:02,960 Speaker 3: it as well to reorganize stores and freshen up the display. 523 00:27:03,800 --> 00:27:06,960 Speaker 3: How much of this deal Dick's buying foot Locker was 524 00:27:07,000 --> 00:27:09,960 Speaker 3: predicated on Nike and what it was doing with this 525 00:27:10,240 --> 00:27:14,119 Speaker 3: shift back to its wholesale channels and away from solely 526 00:27:14,160 --> 00:27:17,240 Speaker 3: relying on its direct to consumer offerings and its own stores. 527 00:27:17,760 --> 00:27:21,600 Speaker 10: So full Looker was, I would argue, over exposed to Nike. 528 00:27:21,960 --> 00:27:24,000 Speaker 10: You know, several years ago they had been working that 529 00:27:24,119 --> 00:27:28,840 Speaker 10: exposure down. I think Dix will remain focused on being diversified, 530 00:27:29,160 --> 00:27:33,000 Speaker 10: just given that their own assortment where they're leaning into 531 00:27:33,040 --> 00:27:36,600 Speaker 10: lots of other brands, new up and coming brands like 532 00:27:36,640 --> 00:27:40,800 Speaker 10: Hoca and on. They did discuss though, that Footlocker will 533 00:27:40,800 --> 00:27:43,719 Speaker 10: sort of remain sort of a hub for basketball, and 534 00:27:43,800 --> 00:27:47,000 Speaker 10: Nike does have a stronghold in the basketball market, so 535 00:27:47,240 --> 00:27:50,040 Speaker 10: I expect Nike to be, you know, a strong vendor 536 00:27:50,560 --> 00:27:53,360 Speaker 10: with foot Locker, but Dix is looking to make sure 537 00:27:53,400 --> 00:27:56,640 Speaker 10: that they have that right assortment, the newest stuff, the 538 00:27:56,640 --> 00:27:59,440 Speaker 10: hottest lines coming from Nike and others. 539 00:28:00,240 --> 00:28:05,200 Speaker 2: What is Di saying about tariffs in their business, so. 540 00:28:05,440 --> 00:28:09,120 Speaker 10: They are going to feel higher costs in this back 541 00:28:09,119 --> 00:28:12,720 Speaker 10: half of the year and even into next year. Dix 542 00:28:13,240 --> 00:28:16,240 Speaker 10: has since the pandemic, since they've been able to see 543 00:28:16,280 --> 00:28:19,200 Speaker 10: sort of an increase in demand for their premium assortment. 544 00:28:19,680 --> 00:28:23,360 Speaker 10: They're not really a huge discounter for the holiday. They 545 00:28:23,560 --> 00:28:28,160 Speaker 10: like to sell their product fully through, so I don't 546 00:28:28,200 --> 00:28:30,720 Speaker 10: expect them to sort of discount and they have taken 547 00:28:30,800 --> 00:28:35,240 Speaker 10: prices up selectively but certainly not across the board, and 548 00:28:35,280 --> 00:28:38,200 Speaker 10: their higher income consumer is sort of accepting those increases. 549 00:28:38,320 --> 00:28:41,240 Speaker 10: I think Footlocker is a little bit of a different story, 550 00:28:42,280 --> 00:28:45,280 Speaker 10: and you might see that impact a little bit bigger 551 00:28:45,360 --> 00:28:49,240 Speaker 10: on that business, just because they don't have those premium products, 552 00:28:49,640 --> 00:28:53,800 Speaker 10: and they're already going to need to offload older inventory 553 00:28:53,880 --> 00:28:57,400 Speaker 10: with steep discounts, so you sort of have that turnaround 554 00:28:57,560 --> 00:29:02,120 Speaker 10: compounded with these rising costs into the next year. Something 555 00:29:02,160 --> 00:29:02,960 Speaker 10: for them to work on. 556 00:29:03,480 --> 00:29:05,400 Speaker 3: Lindsy, I also want to ask you about best Buy 557 00:29:05,520 --> 00:29:08,120 Speaker 3: consumer electronics retailer, how to beat and raise quarter. It 558 00:29:08,120 --> 00:29:10,440 Speaker 3: looks pretty good and it looks like it's on the 559 00:29:10,520 --> 00:29:14,200 Speaker 3: usual strains sales of mobile phones and sales of computer equipment. 560 00:29:15,120 --> 00:29:18,240 Speaker 10: Yeah, so best Buy had a strong third quarter, better 561 00:29:18,320 --> 00:29:21,560 Speaker 10: as better than expected, as you mentioned. I think, you know, 562 00:29:21,680 --> 00:29:24,680 Speaker 10: the stock isn't getting a full bump because there is 563 00:29:24,760 --> 00:29:28,760 Speaker 10: definitely some conservatism and a low guide for the fourth quarter, 564 00:29:28,840 --> 00:29:31,200 Speaker 10: and investors are trying to figure out, you know, is 565 00:29:31,200 --> 00:29:33,880 Speaker 10: it just conservatism, are they just worried about the consumer, 566 00:29:34,000 --> 00:29:36,000 Speaker 10: or is there something really there that there's going to 567 00:29:36,040 --> 00:29:39,600 Speaker 10: be a slowdown in that fourth quarter. But the business 568 00:29:39,600 --> 00:29:43,920 Speaker 10: looks good. Demand looks strong, as you mentioned, computing, phones, 569 00:29:44,120 --> 00:29:47,360 Speaker 10: gaming all looking solid, and they're also seeing an improvement 570 00:29:47,440 --> 00:29:49,719 Speaker 10: in home theater, which is really big because that has 571 00:29:49,760 --> 00:29:52,680 Speaker 10: been a weaker category for the last couple of years. 572 00:29:52,720 --> 00:29:55,520 Speaker 10: So if that comes to fruition, I definitely think there 573 00:29:55,520 --> 00:29:57,040 Speaker 10: will be strength in the fourth quarter. 574 00:29:57,640 --> 00:29:59,840 Speaker 2: So you think about a best Buy, I mean some 575 00:29:59,880 --> 00:30:03,040 Speaker 2: of the those are big ticket items here, and that 576 00:30:03,080 --> 00:30:05,480 Speaker 2: would suggest that they go to a part of the 577 00:30:05,560 --> 00:30:08,560 Speaker 2: case shaped economy made me that is doing better. Is 578 00:30:08,560 --> 00:30:10,600 Speaker 2: that a typical best Buy customer. 579 00:30:11,840 --> 00:30:15,239 Speaker 10: So bez buy. Definitely, promotions are going to be a 580 00:30:15,240 --> 00:30:17,760 Speaker 10: big piece of the fourth quarter. They're sort of leaning 581 00:30:17,800 --> 00:30:21,800 Speaker 10: into those promotional events. That's what worked last year, and 582 00:30:21,880 --> 00:30:24,200 Speaker 10: I think they're trying to lean into the things that 583 00:30:24,280 --> 00:30:26,560 Speaker 10: worked last year for this year. And I do think 584 00:30:26,600 --> 00:30:30,959 Speaker 10: the consumer backshop is quite similar when we do that compare. 585 00:30:32,040 --> 00:30:35,160 Speaker 10: I also, they also recently launched a marketplace and they 586 00:30:35,160 --> 00:30:38,560 Speaker 10: seem to have a stronger focus on marketing and advertising, 587 00:30:38,560 --> 00:30:41,800 Speaker 10: and so they're really trying to meet the consumer where 588 00:30:41,840 --> 00:30:44,120 Speaker 10: they are and make sure that best Buy is top 589 00:30:44,160 --> 00:30:48,080 Speaker 10: of mind when you're shopping for a wide array of things, 590 00:30:48,320 --> 00:30:52,640 Speaker 10: not just those big ticket items like TVs or appliances. 591 00:30:53,200 --> 00:30:56,240 Speaker 10: So they're trying to have a bigger wallet share with 592 00:30:56,320 --> 00:30:59,400 Speaker 10: consumers across the board, and they're leaning on that marketplace 593 00:30:59,440 --> 00:31:01,880 Speaker 10: and advertise to do it and then hopefully get you 594 00:31:01,920 --> 00:31:04,120 Speaker 10: into the store and that's where they can bring their 595 00:31:04,120 --> 00:31:06,560 Speaker 10: customer service and experience as well. 596 00:31:06,800 --> 00:31:10,200 Speaker 3: That was Lindsay Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst. 597 00:31:10,760 --> 00:31:12,720 Speaker 2: We move next to the travel and leisure sector. We 598 00:31:12,760 --> 00:31:15,480 Speaker 2: recently took a look at a survey from Bloomberg Intelligence 599 00:31:15,640 --> 00:31:19,240 Speaker 2: entitled Consumers Maintain Vacation Budgets in twenty twenty six. 600 00:31:19,360 --> 00:31:22,240 Speaker 3: According to the survey, over two thirds of respondents to 601 00:31:22,320 --> 00:31:25,280 Speaker 3: bi's proprietary Travel survey said that they will spend more 602 00:31:25,320 --> 00:31:27,440 Speaker 3: to go places in twenty twenty six, about the same 603 00:31:27,440 --> 00:31:30,760 Speaker 3: as last year. And this comes even with rising economic concerns. 604 00:31:30,880 --> 00:31:32,600 Speaker 2: For more on this, we were joined by Jody Lorie, 605 00:31:32,600 --> 00:31:35,840 Speaker 2: Bloomberg Intelligence, Senior Credit Analyst. We first asked Jody to 606 00:31:35,880 --> 00:31:37,760 Speaker 2: break down what she learned from BI survey. 607 00:31:38,280 --> 00:31:38,840 Speaker 5: So we do the. 608 00:31:38,880 --> 00:31:41,920 Speaker 11: Survey every half a year and so we just got 609 00:31:41,960 --> 00:31:44,840 Speaker 11: the results out for the most recent one. And what's 610 00:31:44,960 --> 00:31:48,680 Speaker 11: interesting is that we're seeing more people planning on keeping 611 00:31:48,720 --> 00:31:52,360 Speaker 11: their budgets the same. But what's more interesting is that 612 00:31:52,600 --> 00:31:56,080 Speaker 11: if costs succeed budgets, fewer people than last year said 613 00:31:56,080 --> 00:31:58,720 Speaker 11: they'd increase their budget. And that's on the back of 614 00:31:59,080 --> 00:32:02,480 Speaker 11: them knowing that inflation is a much higher risk for 615 00:32:02,560 --> 00:32:03,640 Speaker 11: them for their portfolio. 616 00:32:03,960 --> 00:32:06,600 Speaker 3: So in other words, people are making room for time off, 617 00:32:06,680 --> 00:32:09,760 Speaker 3: but they're going to have to scrimp more in order 618 00:32:09,840 --> 00:32:13,560 Speaker 3: to make it happen because their money is not going 619 00:32:13,640 --> 00:32:16,360 Speaker 3: to take them as far as it used to correct. 620 00:32:16,080 --> 00:32:19,000 Speaker 11: And Scarlett, I mean, I think to piggyback on that, 621 00:32:19,440 --> 00:32:24,240 Speaker 11: if you look the eating out, anticipation of spending is 622 00:32:24,400 --> 00:32:26,440 Speaker 11: higher this year than last year, and I think that's 623 00:32:26,520 --> 00:32:28,800 Speaker 11: lesser reflection of people wanting to eat out, but more 624 00:32:28,840 --> 00:32:31,680 Speaker 11: that they're expecting eating out is going to be more expensive. 625 00:32:32,040 --> 00:32:35,400 Speaker 11: And so even though we're seeing people want to spend 626 00:32:35,440 --> 00:32:37,800 Speaker 11: on paid activities and experiences. 627 00:32:37,240 --> 00:32:39,160 Speaker 12: Which could bode well for the cruise. 628 00:32:38,920 --> 00:32:42,160 Speaker 11: Lines and the theme parks, at the end of the day, 629 00:32:42,360 --> 00:32:45,800 Speaker 11: when cost succeed budgets, more people this year over last 630 00:32:45,840 --> 00:32:49,000 Speaker 11: year are planning on cutting and looking at free options. 631 00:32:49,040 --> 00:32:52,000 Speaker 11: So going to the free museums, going to low cost. 632 00:32:51,720 --> 00:32:53,960 Speaker 3: Options, well, now that the government is open, DC is 633 00:32:54,000 --> 00:32:57,280 Speaker 3: an option once again. How about in terms of destination, 634 00:32:58,200 --> 00:33:01,200 Speaker 3: maybe staying closer to home, maybe not going quite as 635 00:33:01,200 --> 00:33:02,680 Speaker 3: far Internationally. 636 00:33:02,400 --> 00:33:06,280 Speaker 11: Yes, and staying closer to home is very very much key. 637 00:33:06,680 --> 00:33:07,880 Speaker 12: If we see the. 638 00:33:07,840 --> 00:33:12,640 Speaker 11: Data, the international trend is to Canada. Canada bumped up 639 00:33:12,640 --> 00:33:15,800 Speaker 11: to the second spot. So we saw that in the midyear, 640 00:33:15,840 --> 00:33:18,920 Speaker 11: and it was pretty curious for US, particularly because when 641 00:33:18,920 --> 00:33:21,200 Speaker 11: you look at it the opposite way, and we did 642 00:33:21,240 --> 00:33:24,480 Speaker 11: this analys a few months ago. Canada is not coming 643 00:33:24,480 --> 00:33:26,040 Speaker 11: to the US. They don't want to come to the US. 644 00:33:26,040 --> 00:33:28,480 Speaker 11: It's too expensive for them, they don't really like the 645 00:33:28,520 --> 00:33:31,800 Speaker 11: current government situation. And on top of it, I think 646 00:33:31,800 --> 00:33:34,800 Speaker 11: they're scared about crossing the border and what it means 647 00:33:34,880 --> 00:33:35,600 Speaker 11: for immigration. 648 00:33:35,760 --> 00:33:37,840 Speaker 12: So we're seeing Canadians not. 649 00:33:37,880 --> 00:33:39,480 Speaker 11: Come to the US, and we're seeing a lot of 650 00:33:39,480 --> 00:33:42,040 Speaker 11: companies comment on that. But we are seeing a lot 651 00:33:42,040 --> 00:33:44,840 Speaker 11: of Americans go to Canada. And I am curious how much, 652 00:33:44,880 --> 00:33:47,239 Speaker 11: and this is going to come in further reports, how 653 00:33:47,360 --> 00:33:50,280 Speaker 11: much of the Canada move is a reflection of the 654 00:33:50,320 --> 00:33:52,600 Speaker 11: World Cup next year. There's a lot of people going 655 00:33:52,600 --> 00:33:54,840 Speaker 11: to Vancouver, for instance, for the World Cup. I'll actually 656 00:33:54,880 --> 00:33:56,640 Speaker 11: be there during the World Cup, but not going to 657 00:33:56,640 --> 00:33:57,160 Speaker 11: the World Cup. 658 00:33:57,800 --> 00:34:01,080 Speaker 2: Why people are going to be there. 659 00:34:01,080 --> 00:34:01,560 Speaker 12: We might be. 660 00:34:01,520 --> 00:34:04,360 Speaker 11: Doing a very family friendly cruise to Alaska. 661 00:34:04,520 --> 00:34:04,760 Speaker 5: Nice. 662 00:34:05,040 --> 00:34:06,880 Speaker 12: It just works out that that's the same time as 663 00:34:07,640 --> 00:34:08,400 Speaker 12: it was bad timing. 664 00:34:08,920 --> 00:34:12,440 Speaker 2: It's bad time, all right, talk to me. This is 665 00:34:12,480 --> 00:34:15,000 Speaker 2: when I go to Aruba, we go to an all inclusive. 666 00:34:16,400 --> 00:34:18,239 Speaker 2: How come I didn't know about this all inclusive thing 667 00:34:18,280 --> 00:34:19,400 Speaker 2: when I had four little kids? 668 00:34:19,960 --> 00:34:22,200 Speaker 12: I mean, were they were they a thing back then? 669 00:34:22,400 --> 00:34:24,160 Speaker 2: I don't know, But I mean I would get the 670 00:34:24,200 --> 00:34:27,200 Speaker 2: bill which would be five inches thick with like smoothies 671 00:34:27,239 --> 00:34:29,239 Speaker 2: and chicken fingers and all that kind of crap that 672 00:34:29,239 --> 00:34:31,799 Speaker 2: they'd eat throughout the day four kids. Man, if I had, 673 00:34:31,840 --> 00:34:33,400 Speaker 2: if I knew about the all inclusive, that would have 674 00:34:33,440 --> 00:34:36,359 Speaker 2: been a savior for me. What are people doing when 675 00:34:36,360 --> 00:34:38,760 Speaker 2: they are they willing to still pay it for travel? 676 00:34:38,760 --> 00:34:42,440 Speaker 2: Because I still here people going to Europe and stuff 677 00:34:42,520 --> 00:34:44,600 Speaker 2: like that. I mean they're not going to Poughkeepsie, They're 678 00:34:44,600 --> 00:34:46,160 Speaker 2: going to Parish and things. 679 00:34:46,400 --> 00:34:49,400 Speaker 11: Yeah, I mean Japan is certainly a popular destination. Strong 680 00:34:49,440 --> 00:34:51,600 Speaker 11: dollar there, yeah, very much increased. 681 00:34:51,640 --> 00:34:53,000 Speaker 12: Italy has increased. 682 00:34:53,200 --> 00:34:56,520 Speaker 11: We're seeing among the upper income level, you know, Portugal 683 00:34:56,520 --> 00:35:00,160 Speaker 11: and Spain as popular destinations. And I think probably it's 684 00:35:00,200 --> 00:35:03,560 Speaker 11: even more interesting is onboard spending for cruises is still 685 00:35:03,560 --> 00:35:06,919 Speaker 11: continuing to have momentum. At the moment, I think where 686 00:35:06,960 --> 00:35:10,160 Speaker 11: we're watching is when that onboard spending shifts and then 687 00:35:10,200 --> 00:35:13,400 Speaker 11: the cruise lines, for example, don't get that gravy for 688 00:35:13,520 --> 00:35:16,239 Speaker 11: cash flow. And to your point, Paul, I mean, even 689 00:35:16,280 --> 00:35:18,719 Speaker 11: though you have something called all inclusives, even though you 690 00:35:18,760 --> 00:35:21,160 Speaker 11: have the cruise lines, that they all are considered these 691 00:35:21,440 --> 00:35:24,480 Speaker 11: package deal what every company is doing, and we're talking 692 00:35:24,560 --> 00:35:27,600 Speaker 11: the rental car companies. You know, Abus is doing this too, obviously, 693 00:35:27,640 --> 00:35:30,600 Speaker 11: the airlines is they're all doing these premium products. 694 00:35:30,640 --> 00:35:33,200 Speaker 12: These you know, you do different tiers. 695 00:35:32,800 --> 00:35:34,759 Speaker 11: Of products, so the add on so you can get 696 00:35:34,760 --> 00:35:37,719 Speaker 11: the base level, which is really the skeleton package. But 697 00:35:37,880 --> 00:35:41,000 Speaker 11: anyone from cruise lines to you know, theme parks to 698 00:35:41,000 --> 00:35:44,520 Speaker 11: some extent, to the all inclusives, to the airlines, to 699 00:35:44,560 --> 00:35:47,600 Speaker 11: the rental car companies are all segmenting to give you know, 700 00:35:47,640 --> 00:35:48,920 Speaker 11: the lower income consumer the. 701 00:35:48,880 --> 00:35:50,399 Speaker 12: Ability to say that they traveled and. 702 00:35:50,360 --> 00:35:53,400 Speaker 11: The higher income consumer the ability to travel luxury. 703 00:35:53,920 --> 00:35:55,839 Speaker 3: And in terms of the add ons, what are these 704 00:35:55,960 --> 00:35:58,719 Speaker 3: add ons are they? You know, things that they used 705 00:35:58,760 --> 00:36:00,880 Speaker 3: to offer for free and now charge. 706 00:36:00,680 --> 00:36:01,759 Speaker 12: You for for some of it. 707 00:36:01,760 --> 00:36:04,399 Speaker 11: It is so you know, a good example I have 708 00:36:04,680 --> 00:36:07,200 Speaker 11: is anecdotally, I know that some of the cruise lines 709 00:36:07,239 --> 00:36:10,080 Speaker 11: that used to not charge to get people into the 710 00:36:10,120 --> 00:36:12,720 Speaker 11: center of a city, say in Europe, you're on European Cruise, 711 00:36:13,040 --> 00:36:15,640 Speaker 11: they used to get that for free. Now they say no, 712 00:36:15,760 --> 00:36:17,040 Speaker 11: you have to be a part of one of our 713 00:36:17,320 --> 00:36:20,719 Speaker 11: you know, expeditions, one of our one of our excursions 714 00:36:20,719 --> 00:36:22,480 Speaker 11: in order to get that for free. Otherwise we charge 715 00:36:22,480 --> 00:36:24,839 Speaker 11: you twenty dollars to get into the center's clown in 716 00:36:24,880 --> 00:36:26,919 Speaker 11: you know, Czechoslovakia and not Czechosvakia. 717 00:36:27,040 --> 00:36:27,600 Speaker 12: Check republic. 718 00:36:27,640 --> 00:36:31,080 Speaker 3: He our Thanks to Jody Lorie, Bloomberg Intelligence Senior credit Analyst. 719 00:36:31,400 --> 00:36:34,080 Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 720 00:36:34,200 --> 00:36:36,680 Speaker 2: providing in depth research and data on two thousand companies 721 00:36:36,680 --> 00:36:38,040 Speaker 2: and one hundred and thirty industries. 722 00:36:38,120 --> 00:36:40,719 Speaker 3: And remember you can access Bloomberg Intelligence YEA, B I 723 00:36:40,840 --> 00:36:43,000 Speaker 3: go on the terminal. I'm Scarlett Foo and. 724 00:36:42,960 --> 00:36:45,360 Speaker 2: I'm Paul Sweeney. Stay with us. Today's top stories and 725 00:36:45,360 --> 00:36:50,280 Speaker 2: global business headlines are coming up right now