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Official dirge banks to limit purchases of US government bonds and instructed those with high exposure to pare down their positions. The directive, though, does not apply to China stateholdings of US treasuries, and this move, Carol framed around diversifying market risk rather than anything to do with geopolitical maneuvering or a fundamental loss of confidence in US credit worthiness.
Yeah, it makes me think about this idea in this argument that the US is increasingly becoming uninvestable. But let's see what Stuart Kaiser has to say about all this. He's head of equity trading strategy over at City. He joins us here in studio. Stuart, good to have you here, welcome back, thank you, good to be here. Hey, we were just talking with our Stuart Paul about Kevin Walsh's past support of a new accord between the Treasury and the Fed. This has to do with the balance sheet,
which sounds like increased cooperation. We know in the past that Kevin Walsh has wanted the FED to shrink its balance sheet.
So we're trying to make sense of what it is.
And then we just talked about the Chinese regulators advising their financial institutions to rein in the holding of US government bonds. Are treasuries undergoing a reboot in your view on the world stage when it comes to you know, the United States being kind of a sure thing, if you will, in the financial world, And if so, what are the implications of that?
I mean, look, I don't know if there's any real alternative for a lot of these countries to invest their.
Reserves and size and the liquidity right hands down.
And look, there is a risk out there in the long end of the government bond curves.
I think that that's globally.
We've seen that happen in the UK gilts, we've seen the German bones, We've seen it happen in Japanese JGB. So I don't think really concerned about the impact of fiscal spending on the long end of the YEO curve is unique to the US, nor is it something that's kind of snuck up on people.
But it is a risk, and.
If you look at what has triggered those kind of events in other countries, it's generally been things related to fiscal policy, tax cuts, things of that nature. So it's something that's on our radar, has probably been our radar since about last July when all of those thirty year bonds globally got above three percent. You know, as an equity guy, I'm going to let the bond markets tell me.
You know, when and if this becomes a risk.
But for now, the equity guys keep a watch on the bond marsh.
We do, but I would say if an equity guy knows when the bond auction is, you're in trouble. But big picture, in this case, I think, you know, we have not seen the long end of the curve move significantly. We haven't seen bond volatility increased materially either, So for now people seem pretty comfortable with things.
Well, speaking of the equity side of things, you were plenty busy last week with the rotation that we saw the volatility that we saw the moves down, then the moves up. A week that's sort of ended really close to where it started, but a lot happened in between, with some big moves lower. When it comes to companies like software. What is your view on where where to be optimistic right now and where to stay away from?
Yeah, I mean so we're still pretty positive US equity risks in general. We've been pretty bullish on the cyclical parts of the of the equity market since the beginning of the year. I think if you took a little bit of a step back, though, you'd see that this quote unquote rotation sort of add of tech and growth and into value and cyclicals actually started back in November. It's not a new phenomenon. What happened last week is the moves accelerated and it got quite volatile, and I
think that impacted the way that folks matage risk. And it's also, to be honest with you, a pretty simple math question, right. You know, if you take the mag seven plus broadcomm and a few others, you pretty quickly get close to you about fifty percent of S and
P market cap. So when you're selling those stocks, you have to find a home for them, and I think just the absolute size of the moves is really what concerned people last week rather than a change to like the underlying US ex The outlook, I mean, US GDP according to the Fed is tracking kind of mid four percent range. Our Economic Surprise Index is kind of off the chart. Earnings were solid, You're expecting some good tax refunds coming up. So the sort of fundamental underpaintings of
the market look pretty good. What you're going through with some indigestion after two years of buying tech and growth stocks, you're now kind of repositioning not whether you want to own US equities, but how and that process has been a little bumpy at least.
Well.
We talked too about the overperformance or performance of small caps last week. They're up about two point two percent, certainly outperforming the large cap in disease. The other thing is, you know, if you look at the equal weight, S and P is easily outperforming the S and P five hundred and five and a half percent year to date for the equal weight to just under two percent for
the widely quoted S and P five hundred. So again that plays into what you're saying that we're seeing money go elsewhere, but what's to stop the money going back to big cap tech or those hyperscalers, because it feels like the last two or three years, everyone's like no, no, no, time to diversify, and yet that's where the overperformance has been for outperformance.
I mean, I think back in sort of October and November earning season, you started to see a little bit of a change in this reaction function. Meta back then was the key one where they announced this very large capex spending program and the stock sold off, and that was probably the first time in the last couple of years where a company had been punished for spending more on AI and look.
Low and behold. This quarter we saw that repeat with a number of companies.
So Meta did well right off of their earnings because they're showing the you know, the ROI on on this AI spend.
They are, And that's that's the key, right This capex spending is undergoing an auditor or some other form of very invasive invasive examination. And but you know Microsoft and Amazon, we're both kind of punished for more capex spending this quarter. So I think what you're really seeing is within the tech trade the shift is moved kind of away from the spenders and to the beneficiarias of that spending. We like power generation and the AI data center build out
as the way to express that. And then more broadly, to your point, you're also getting a little bit of a rotation out of growth into these cyclicals. So again, these things aren't necessarily negative for the market collectively, but they do cause a lot of pain in some positions that people have had in their portfolios for twenty four months minimum.
Alphabet embarks on a global bond spree to fund records spending, borrowing far and wide to finance unprecedented spending plan on its AI ambitions. Twenty billion dollars a US dollar bond offering on Monday, more than fifteen billion dollars than initially expected. Is this a signal of something? I mean, it's the same thing you're just talking about.
You know, it's a signal that they have a lot of spending to do. I think, you know, you must send a lot of money. They do.
But you know, Amazon though, looks like free, negative free cash full after their announcement, So I think what folks are doing is you can generally carve out the mag seven and say their balance sheets are so big and strong that they can sustain their spending.
They're all double A rated or better.
You take a step, even a slight step down in credit rating to let's say an oracle that trip will be and that examination is a little more harsh.
So I think what you're from Google.
Frankly, Look, they're viewed us the current winner in the AI trade. Now clearly those winners are changing quarter to quarter, So I think folks are maybe a little more comfortable with them spending. Just to your point, they have the ROI, they currently have the best AI model. If you can demonstrate acceptable return on the investment, the markets are okay with this.
If it looks like it's going to be roe.
Destructive, then right now you're getting punished for that a little bit. And I wouldn't expect that to change as this year goes on. I mean there's a higher bar right now for what you're going to spend this money on.
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With the rundown on the latest headlines and sizing up the competitive landscape on GLP one's our guru, Bloomberg News
Health reporter Madison large Fazacy in the studio. I just want to start with the lawsuit because I was pretty surprised last week when we got the news that they were going to do this, because I thought there was no more It wasn't legally allowed by the FDA to compound, for companies to compound medicine anymore, well, not any medicine, but GLP one is because there's no longer a shortage. Wasn't that the loophole that these companies were using exactly?
So it was a big, I mean, kind of a risky bet that Hyms was taking that the FDA just wouldn't do anything about it. But that is sort of what we've seen happen the last couple of years since the shortage ended. There's been really very little action from the FDA in terms of cracking down on this proliferation of compounded GLP one drugs, and so Hyms has continued doing it.
A lot of other companies have continued.
So they're breaking the law by doing it, that is the assumption.
Yes, they but the problem is that the FDA really hasn't said much of anything, so it was kind of up to these companies to interpret the law themselves. So in this gray area they've continued doing it. And that's part of the problem is that it was a little bit unclear, at least to maybe the general public or to some people like what the FDA was really going to do, and so they've just continued to do it.
Some companies have pulled back, like Row for example, stopped compounding after the shortage has ended, and Hyms has kept doing it. And so far, I mean until now, there has been really little action either from Novo from the FDA, And finally, I think both of them said enough is enough, all right.
So NOVA files this lawsuit. All right, So I guess it's going to play out in the court. So there's going to be negotiating or what.
We don't really know.
The FDA have to come in here and make a ruling to like figure out what the real ruler law is.
Right.
So the NOVA is suing on the grounds of patent infringement, which is something we haven't seen before. Nova and Lily have both filed lawsuits against compounding pharmacies, telehealth companies, medspots that are selling these knockoff versions of the drugs, but they haven't gone after anyone for patent infringement yet. So this is actually the drug semaglue tide, which is the active ingredient in both Ozembic and wagov Nova saying that Hams is violating that patent in the United States.
So that's a big deal. That's a big.
Escalation, and it sort of shows the more aggressive strategy that Novo's taking because they really are under a lot of pressure right now.
Why are they under pressure? And Eli Lilly is not as under much pressure.
As much pressure, I mean Novo.
So we're gonna talk about some deal news a little later, but yeah.
Yeah, Novo, they've had different problems even though the market, you know, they're the only two players really in this market. Novo has had more difficulty because one, their drugs are a little bit older, meaning that they do come off of patent outside of the US sooner, whereas Lily has another decade of patent life on its drugs. Nova also has had more difficulties with these compounders because it did not get a handle on this supply shortage as soon
as Lily did. So both companies drugs were in short supply. Novo had more issues, couldn't get a handle on it. Lily got a handle on it more quickly and was more aggressive really right off the bat, going after these compounders, whereas sort of I mean they're Danish, they're a little bit more less aggressive I think than an American pharmaceutical company,
but they've had to change that recently. And then in terms of next generation drugs, their pipeline is not quite as exciting as Lily's, and so that doesn't set them up for the future quite as well.
I am stuck that we're already talking about, like maybe a move towards generics or their patents coming up. When did they start, I'm like, I feel like it was just a few years.
Ago, right, I mean, that's the thing.
So Novo's drug Ozempic was approved I think in twenty seventeen twenty launched in twenty eighteen, and so that's the same drug technically as wov Wigov's, just a higher dose version of that. So it's that was the thing. It didn't really come onto the scene. People didn't start talking about it until a couple of years ago. But really the drug has been around for a while, and so the clock has been ticking in that time.
So we talk about the Eli Lilly deal. Yeah, okay, so this is not a non GLP one deal, which kind of speaks to the idea of these companies diversifying. The company agreed to buy the closely held US biotech Orna Therapeutic up to two point four billion dollars in cash, second deal in as many days, as the country looked to expand its pipeline beyond zet bound. What does this do?
I mean, this drug that found no like this.
Like it kind of speaks to this idea of going beyond, of going beyond this industry because I kind of.
Thought they were going to be living off this a long time.
But I guess that's why we're not running a drug company.
That's exactly why we're not.
Because I had the same reaction as you did. I thought, like, Okay, there they got it.
They're going to tweak it, they're going to make a pill, they're going to just kind of keep going.
Well, Lily has learned the hard way that resting on your laurels, which is sort of the problem that Novo's facing right now, doesn't work. I mean, drug companies are always should always be looking toward the next big thing because patents expire, and that's the problem with you know, the drug industries. You always have to be thinking about the next thing. Lily is the one that brought Prozac
to the market back in the nineteen nineties. That was a massive drug and for a while Lily was in a similar position where it was riding high on the Prozac fortune. And then after that they really were so ultra focused on like, we're going to be a company that develops neuropsychiatric drugs and for psychiatric conditions, whatever we're going this is what we're going to do. And then they didn't have a second act to follow it up.
And so I've talked to the executives at Lily who have said they're really being purposeful about we have to be thinking outside of just obesity. They're looking at immunology, cancer, genetic medicines, a third of their portfolio as gene therapies now, so they're trying to they're still extremely focused on obesity and they have. They're testing drugs for basically like everything in the obesity landscape, you know, from five percent weight loss to thirty percent weight loss. They want to have
something for everyone. But they're also looking outside of obesity, and that's a really important part of their strategy.
Can I ask you something going back to because Nova's going to come off patent sooner, so should we assume that so then there'll be all these copycats that folks that maybe were taking zep bound.
Or something like we've talked with you, that they're not all the.
Same, that they're just going to run to the generics because they'll be cheaper, or they're not going to be able to medically because things are.
Different, and say they hypothetically would be able to I'm consulting with their doctor. If their doctors like, yeah, you know generic semaglue tide is fine for you.
Sure that's great.
If that's the most affordable option, that's what your insurance covers.
But we also have this other side of.
This industry where there's a huge cash pay component, and the drug makers Novae Lily have both worked with the Trump administration to bring down prices for patients in Medicare
and also cash pay prices. I think it's something like a third of patients in this market in general right now in the US at least are cash pay patients, so they're not going through insurance and they're paying these lower discounted prices that the drug makers offer through direct to consumer websites, and so the prices have come down much, much faster than we would normally see in such an ultracompetitive market usually that it doesn't happen this way.
So patients maybe are already.
Used to paying two hundred dollars a month for their zep bound and they don't want to switch because that's what works for them. Even though there's a cheaper option on the market. It's sort of a question mark as to what happens next.
So we're talking about this in the context of the way that Americans are looking for ways to lose weight. We'd be remiss if we didn't talk about some of the messaging in the Super Bowl last night. Mike Tyson ad from It was like a Maha ye ad out there talking about how processed food kills and he's eating an apple at the end, and he talks about his
own struggle his sister's struggle. Is there any I mean, I know it's kind of a crazy question, but is there any chance that the messaging with that starts to work and it attacks the problem that some argue is where it starts, right, this idea that we're not necessarily eating healthy and therefore there won't be as much of a demand for these trucks moving forward.
I mean, it would be great if I think, like everyone hopes, even Lilyanovo say that they hope that people will eat healthier or move more, like they say that that's an important part of these drugs too. But I think it's hard because it does their obesity is a disease. And that's the message that these drug makers are also putting out, is that, like, this is a thing that for some people, eating healthy doesn't fix. And even if you eat healthy, exercise whatever, for some people that just doesn't.
They have a certain genetic makeup or it's whatever, like they can't lose weight or it's really really difficult for them to lose weight. So I think it's like not an either or situation. Both things should be happening, and hopefully both things will help bring down the obesity rates in this country.
But I wanted to ask you because I feel like when we started talking with you that we you know, are like, this is the drug that's.
Going to solve everything. Can these drug makers get indigital indications for the medications that expands their patents or something like? Does that help?
I mean it helps with getting more insurance companies to cover it so to pay for it. There are some things like if you have a different formulation for the drug, like those types of things. Sometimes pediatric indications will help give you a couple more years of patent life. But at the same time, it's like it's always the clock
is always ticking. It's not going to add much at this point, and you have patents at least for some glue tyde for azempic, and we'll go be falling sort of all over the world within the next year, and so you will have those generic generics out there in the world, even if the US patent hasn't expired yet. It's kind of only a matter of time before we get there.
I almost feel sorry, like I know it like the R and D that goes into this stuff, Like you kind of understand that argument. Having a brother that used to be in formal, like we used to talk about this all the time, but you.
Know, right, and that's what I think.
They're also like they've really had a hard time with the compounding because it's sort of circumvented that a little bit.
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I want to bring in Joy Swang, senior client portfolio manager at American Century Investments. The firm has about three hundred fifteen billion dollars in assets under management. She's back here in our Bloomberg Interactive Broker's studio. We haven't had a chance to speak to you since Kevin Walsh was announced as President Trump's pick to chair the FED. Perhaps he gets confirmed, perhaps he does replace j Powell. How does that change her outlook for the Central Bank?
It doesn't really change her outlook because we did believe that it probably would have been one of the Kevins, and you know the other one was kind of eliminated a few weeks ago, so we did have a strong feeling that it would be Kevin Walsh. And the good thing is is, unlike some of the other candidates, he does have a pretty long public history of his views
and things like that. So if we anticipate that he continues to follow some of those pads with maybe a little bit more of a dubbish bias, given.
His history doesn't necessarily align with what he said over the last couple of years.
Yes, but I do think that he is a pragmatic banker right. He has experience on both sides, so I do think that he will understand how the FED does have a pretty narrow, tight rope to walk. So we do believe that with him being confirmed as FED chair, he is likely to cause yield curve steepening. So we are cautious about being very long in the yield curve. But at the same time, I think the last time I was here, we were talking about being on the
short end. Given that, we do think even with Kevin Walsh being confirmed, there probably won't be as many cuts as people are thinking.
I think what was interesting is we've been talking about this most red story on the Bloomberg about Kevin Walsh and maybe kind of redefining the accord between the Fed and the Treasury, and that has been a little bit unsettling to the bond But what's interesting is it would basically involve, you know, the FED balance sheet and maybe being kind of a buyer when the Treasury needed the
Fed to do that. At the same time, Kevin Warsh has been out there, as you say, there's a history where he has looked to reduce the FED balance sheet. So like, which is it, how do you read between the tea leaves about really what kind of a FED chair he ultimately will be yes.
And also we have to put forth the fact that you know, since eight the Fed's balance sheet has grown many, many times, right, So it's not even just cutting back a little bit to pre COVID. Even going into COVID, the balance sheet was very bloated, right. So that's why it's kind of like I can see his point where previously he said some things, now he's saying something else. It kind of makes sense. So I think it's to be determined exactly how it's going to play out, But overall,
I think it is still positive for yields. They should remain higher, and so from the investor's perspective, it's great time to buy bonds.
Higher because inflationary pressures.
So inflationary pressures, we do think that inflation, while it's down, you know, there's a chance it could remain closer to three than two. We'll see how January CPI comes out. Historically that's been a pot month, so you know, we'll see how that plays out. But we do think yields are going to stay higher for longer. Is it?
Also some of it has to do with I feel like people keep coming in and talking about the US economy doing okay, and that with some of the stimulus that's coming as a result of President Trump's the tax cuts and so on and so forth, and that's just going to provide more stimulus into the economy, which also means probably some inflationary pressures. But an economy that's doing okay.
Yes, it's actually shockingly okay. It's better than okay. In fact, it's pretty strong.
It's not we expected probably a year ago.
It is not so this time last year, American Center was definitely thinking more of a slowdown. Now we are sort of on the more positive side. We see, like you pointed out a lot of tailwinds for this reacceleration story. Yeah, I mean, especially you know it's tax season soon. I think a lot of people are starting to calculate how big of a refund they're getting. Yeah. I don't think
I'm in that camp, but some people are. So those tax effects from one big, beautiful bill should start to flow through, and towards the second half of this year, I think there will be stronger growth.
How do you look at companies such as Alphabet today embarking on this global bond spree of fund records spending, So Alphabet borrowing far and wide to finance the unprecedented spending planned to its AI ambitions. Set to raise twenty billion dollars from a US bond offering on Monday, more than fifteen billion dollars initially expected. It's also a rare
sale of one hundred year bonds. It's the first time a tech company has tried such an offering in the dot com since the dot com frenzy at the late nineteen nineties. How do you look at that?
I think that speaks to the fact that companies also see yields possibly moving up right because they want a lot They're issuing and coming to the market now because they anticipate in a year, two three years it'll be higher. And one thing that we're thinking about is certainly Alphabet has the business and the cash flows to repay these bonds. However, we have seen a lot of AI related names making loans in the COLO market. In the private debt market.
A lot of those loans are going to technology companies, which may not be a solid.
I don't know, maybe you can convince me just twenty billion dollars it's it's a lot of money, but if they're spending last week, Alfabet said it's planning as much as eight one hundred and eighty five billion dollars on capex this year, So that's like, it doesn't seem a small part.
Well, it just shows that they're using the debt market to do a.
Little bit of it.
Kind of like during COVID when yields were basically at zero, Apple went to the bond market borrowed. They had plenty of cash on hand, but when the market is going to rearge it, you might as well borrow.
Well, my money costs so little, right, Like, why not why not tap into what do you think is the best play in the fixed income world right now? And I am also curious. We were talking before we got going, you're traveling. I am curious what clients and investors are kind of saying. Here's what I want to know about right now.
A lot of investors are being opportunistic. So while I think passive investing has made significant headwinds in the fixed income space, a lot of investors are seeing historically tight spreads across investment grade corporates, highyield corporates, securitize credit. It's all very tight. So active managers really have the edge here. We're thinking this year you're not going to see a big credit event where you're going to have this obvious
opportunity to add lots of risk. So we're being strategic and when you get little blips, we have a shopping list ready to go. So our portfolio managers are being active. They're being opportunistic at these small spread widenings because, like we said, over the course of this year, I think that will be rewarded.
So are they largely in a wait and see mode at this point, ready to act if things start to.
Targets scenario.
But we still favor higher quality corporates over high yields. But strategically adding to some of the high yield names SaaS names.
Do you like no, I mean the SaaS company goes to the debt market. Are you a little bit more suspect?
Yes, yes, for sure. No, it doesn't have the same effect. We haven't seen the same spread windening is on the equity side. But of course, again, there are tech names we feel comfortable with and there are some that we don't.
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I'm looking at shares of Sally Beauty. They climbed as much as nine point three percent earlier in the session, close hire by five point two percent after the company reported it justin internings per share net sales for the first quarter that beat the average analyst estimate. Gross margin came into fifty one point two percent. That's what analysts we're expecting. We got with us. Denise Palonis, president and CEO of Sally Beauty Holdings, it's the one point seven
billion dollar market cap company. She joins us from Plain Out, Texas. Denise, Welcome back, Welcome back. We spoke to you a few months ago. Just remind everybody professional beauty supplies products for hair color, hair care, skincare, nails and more. You've got a team that does direct sales. You've got stores to Armstrong, McCall cosmoprof. We like talking to you because you've got a really good idea of what this economy looks like
in many parts of the country. Just give us what you're seeing.
Yeah, thanks for having me back on you know, first of all, I think we're seeing a very resilient customer base. Right for all the trials and tribulations, they are still spending and in our world, they're buying a lot of hair color. Hair color was up eight percent for us in our Sally business, So our retail business in the quarter and campaigns like save some money, Skip the salon are really resonating with customers out there who are trying to stretch their dollar.
That's interesting.
So you said revenue was up because there's more being purchased, or because the cost is higher, or is it a little bit of both.
Now on the color front, it's actually more being purchased. Units are up. It's not an au R challenge, it's more people are out there and engaging. We see growth in vivid colors as well as great coverage and a lot of people figuring out that they can DIY it themselves and save some money versus the salon.
I am curious does weather matter for you guys, Like do people then order stuff and say I'm just going to do stuff at home.
Yeah, we don't get We don't get a lot of help from the weather. We get some hurt from the weather when our stores are closed, so you know, we're not one of those big benefitters. But we do see a little bit of mix of maybe people getting ready to do their treatments while they're stuck at home.
Can you explain the proprietary brands you have and sort of the relationship that you have with the companies that that make the other products that you sell, because you have this interesting model where you do you have your own brands Ion, bondbar Strawberry, Leopard and others, but then you also sell some of the other name brands that people recognize in your stores. Like what's the relationship there and what are you seeing with what people are buying?
Are they trading up? Are they trading down? You say they're resilient, but talk to us about like actually what they're buying.
Yeah, On the own brands front, about thirty eight percent of our business is our own proprietary brands. You just listed a few of them, and so then the rest of our branded business on our retail side certainly comes from great partners like Wela and others. It's a good relationship.
You know.
We play in a specific niche in space where we can bring value and give people a convenient set of solutions with some great products, great prices. But we grow our with our vendor partners as well, so they when they bring great innovation, we love getting behind that and growing that for us. The benefit with our own brands, it's a nice gross margin business for us that comes through and our stores really know those products well to
sell them to our customer and offer value. You know, we see customers really sticking with most of their routines. The one place where we've seen them trading down a bit is shampoo and conditioner. When you're that lower middle income consumer, you might not trade out hair color. It's really important to you, but you might trade out a little bit more of the basics where you can fill in with other things.
Where's the growth in the business the most, And I'm just curious because you play into the commercial side, you have your stores. I'm just I'm trying to understand exactly where the growth is.
Yeah, the growth is in the retail business right now. Our pro business that we operate is a great, steady eddy business, great business, great profitability. Also saw nice growth in color, but the outsize performance really was with our Sally US business. It grew one point three percent in the quarter, which might not sound like a lot, but we did go through a government shutdown that wasn't the easiest time period for some of our customers. So that
growth in Sally is we see it. We also entered the fragrance category in Sally in one thousand stores last quarter. Our e commerce business at Sally is up twenty percent in the quarter. And then we continue to grow on programs like licensed Colorist on demand, which is really a free one on one consultation to get the right color for your hair. And we saw color customer count up three percent in the quarter. So lots of great strength on that sali retail side.
So the probe is is just like a nice steady Eddy, right, And you just like, what percentage is that of.
The business you said outside is the retail correct?
Yeah, so the pro business is about forty five percent of our business, Steady Eddy being a nice single digit grower, good, good profitability, a lot of innovation there. So our stylists really love hair care innovation in particular. So we continue to see growth with brands like K eighteen as well as strongholds like Moroccan Oil and color Wow, where that set of product and portfolio and newness is really important to them.
But again, you don't own Moroccan Oil. You you team up, you know, you distribute or or sell their products.
We do on the pro side of our business. It's one hundred percent of vendors supported. That own brand is only on the retail side of our business.
What it's interesting is like color Wow, where full transparency, it's something we use in our makeup room. Like but you know, and it's certainly something I've used and I feel like a newer product. But these products are constantly changing and I see it, like I said, in our makeup, hair room like things just kind of all right, we're in this, and we're that for a couple of months or something, then something new comes out. You know how
competitive this landscape is. I mean the business too though in retail is having a relationship with your suppliers, But are you constantly having to kind of flip and change and just go kind of where the consumer's going.
We always are following the consumer. And the great news is many of our suppliers are the suppliers who keep bringing out new innovations. So Shortstof, one of our great color suppliers on the pro sides, has fantastic product lineup has been growing like crazy with us, and we're really excited to keep that partnership going. We certainly introduce new brands and new partners, whether that be through a color Wow or a Moroccan oil or K eighteen and the
parent companies behind all of those. So it is a constant chasing of innovation, just like you think across the cosmetic space that exists in hair as well. And the key is maintaining great partnerships. It's win win relationships. When we grow, they grow, and all of that translates into good business.
You know, looking at the fagopage on the Bloomberg terminal where I can see a breakdown of geographies in terms of revenue, the US and other countries has really stood kind of totally stable really since twenty eighteen. Eighty one point eight percent of revenue last year came from the US, eighteen point one eighteen point two coming from outside of the US. Are you looking to grow your business outside of the US.
You know, we have good business outside of our outside the US that we're looking to grow where we are. So, we have a great business in Mexico and in Chile that we continue to grow, and we see store expansion in our Mexico market in particular, and then our European business. We play mainly in the UK, Belgium, France, and we like those businesses quite a lot. That business is very different where the pro and the retail customers shop in the same store for the same product, a very different
demand profile than the US. We'll keep growing those businesses in place, versus necessarily expanding into more countries.
Hey just got about twenty thirty seconds here. I'm just curious, Denise, I'm looking at about eighteen percent of your float is short, so it looks like investors are betting that your stock's going to go down. It's up almost twenty percent year to date. What do investors kind of press you on the most as quickly?
You know, I think they're looking for top line growth. They absolutely want to see us low, mid single digit growth. That's what we're very focused on driving and what we want to deliver in coming quarters.
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