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Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries are analysts cover worldwide Today?
Well, look at why the retailer coals rates is full year outlook for the second straight quarter.
Plus a look at why travelers may be eyeing similar spending for vacations in twenty twenty six.
First, we move next to some news in the biotech space.
This week, we heard that a pill version of Danish drug maker Novo Nordisk's ozempic failed to slow the progression of Alzheimer's in a pair of studies.
Nova said this was based on a cognitive assessment for patients who took the medicine. The drug maker will now discontinue a plan one year extension of the studies.
As a result, Novastock plummeted to its lowest in more than four years. We were joined by Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analysts.
We first asked Sam to break down Nova's recent studies.
Is not about OBCD. It's about a drug, semaglutide in a pill form that they've tested in Alzheimer's disease. And the theory was, and there was some evidence that people who were taking the very first version of the GLP one brug so victosa or liro glue tide, they had a lower risk of developing Alzheimer's when you looked at historic or rect prospective data and there's animal models, et cetera. So they thought that it's worth a try and it
didn't work out. They said that they're seeing some impacts in some biomarkers, et cetera. And we'll find out next week what biomarkers. But the trial didn't work out. And the question here is was the theory wrong or is the drug not good enough? Is it pill enough? And we know the pill doesn't do as well in obesity as the injection. Should they have tested the injection?
That's a good question. And you mentioned that the ingredient here that we're paying attention to is some maglitude, which I hope I'm pronouncing correctly there. Does that mean that this ingredient and Alzheimer's are just a no go from here on out? Or does there need to be more testing before we can determine that?
Yeah, there needs to be more testing, But who's going to do that? I mean, having failed, now, who's going to put the money into test it? Now? Linly does have an Alzheimer's business in a completely different with different set of drugs, and they have a more party product once weekly with a relatively easily administered pen that would be interested to see whether that helps, and you know, so that you get more much more drug in the
body or maybe redesign it a bit. So it really does depend on how much appetite for risk these companies have. And literally now with just over literally just over trillion dollar market cap, maybe they should give it a go. You know, it would be magic if this thing, It literally would be magic if this thing just helped so many different diseases.
Sam talk to us about just the market for dementia. Alzheimer's is one one part of it. I would think that's a it's a big market and be it. It's got to be a growing market with people living longer. How do you guys think about it and and how do you play it?
If you're an investor, Yeah, it's it's it is a significant societal issue, number one. And you know, I think there are many, not many families who would say that they haven't experienced it. They have all the people in their in their extended family. So the market has humongous potential. But you need drugs that actually treat the disease. Remember, by the time you have Alzheimer's, I eat a full
blown dementia of the Alzheimer's it's a bit late. That means that a lot that's already happened, So you need to go early, long expensive trials, and Lily is doing that with their assets, So fingers crossed, we'll find out in the next two or three years where they're going early with these assets. Russia is doing it too. It would be a beneficial right, I.
Mean, the tests with the pillar form of ozambic was definitely a lottery ticket. If it worked, great, If not, we're back to the drawing board. Are there any effective treatments right now against dementia or Alzheimer's?
Well, by effective, I mean it's tough to say, but there are drugs that lower this thing that is viewed as a critical part of the Alzheimer's disease, which amyloid plaques in your brain. If they do lower it, Lily's got that drug, Biogen's got an equivalent drug, or she's trying a similar approach, and you do slow down the degeneration. You don't stop it, you slow it down. So what we really want is to stop people getting to that degeneration.
Try and get them before they have full grown Alzheimer's or dementia, so that's called mild cognitive impairerment. Try and slow that down to give them another ten, twelve, twenty years of dignified life.
So where do you think we are on a time frame for something like that, sam Is that measured in a couple of years or more than that?
Well, so Lily is literally trying that and we'll find out whether and they have the better rug in this space. So we'll find out whether in the next two or three years. Do you remember, these things are trials that need to be run until you start seeing a difference. They get that to that point, and of course then society has to decide, well, how we're going to pay
for this. How many people because there's a lot our market, right, how many people are we going to want to treat with the prices of these drugs whatever they are, even if it's ten thousand dollars a year, right, and they are on their way to becoming worse, and we want to slow that down. You have ten million people, I mean, this could be similar in terms of value to the obesity market. But you need the drug to do that.
So let's wait and see. And RASH has got a new way of trying to do it, and they're going to go again and also to phase three to test that out.
Our thanks to Sam Fazelli, Bloomberg Intelligence, director of Research for Global Industries and senior pharmaceuticals analysts.
We move next to the restaurant industry.
Bloomberg Intelligence will release data for November restaurant sales in early December, and according to bi US, restaurant same store sales rose seven tens of one percent in October but could drop in November because of the government shutdown.
For more on the industry, I was joined by Michael Halen, Bloomberg Intelligence, Senior restaurant and food service analyst. I first asked Michael to talk to us about how restaurants are doing and whether it depends on the segment of the market they're targeting.
That's definitely part of it.
We saw that in last month's data find dining had a really nice rebound, and I think part of it is because they're catering to hire income consumers who own assets and are feeling pretty good about things moving forward. Right now, you know November is going to be a tough month. There's no doubt about it. The government shut down has definitely impacted sales and traffic for the chains we cover, especially in the DMV area as well as
in the South where there's a lot of government workers. Also, last November restaurant sales had a nice boost from the election, and so we're going to.
Be lapping tough comps.
So November is not looking great, but things should bounce back a little bit here in December. And we're not crazy bullish, but we're more bullish about the first half of next year.
Let's start with quick quick service dining. Talk to just about that marketplace. I think back to McDonald's of the world and so on, how's that varing.
Quick service had a really difficult first half of the year.
They were lapping strong comps and they and they kind of lost their way when it came to value, right.
They just had implemented too big of.
Price increases over the last few years, and customers started to push back, especially low income consumers who have been you know, who are really impacted by inflation to a much greater degree than middle and higher income consumers. So the first half was difficult, but here in the second half of the year, things have gotten better, largely because they've re established their value propositions. You know, McDonald's has
revamped its dollar menu this year. They also reintroduced snack wraps out a three dollars price point, which have boosted checks by you know, people adding them on to their orders, as well as bringing in some low income consumer traffic.
But you know, low income consumers are pulling back at a pretty big rate.
You know, we think part of that is the snap benefit pullback.
But they've been able to.
Bring in some higher income consumers and middle income consumers.
So things are starting to look better.
McDonald's especially, I mean McDonald's is going to be lapping the eat Coli or right now is lapping the eat colip about them from last year, and so you know, they're the eight hundred pound gorilla. And I think good results out of McDonald's over the next few quarters should boost the entire category.
How about the cost of beef, which you know consumers complain about across the board. I know companies are dealing with it, and what I understand is we're not going to see a material improvement in the cattle herd till maybe twenty twenty eight. So how does that factor into the profit margins of all these restaurants.
The restaurants that are impacted the most are you know, burger chains like Shakeshack, or steakhouses like Texas Roadhouse that own and operate all of their stores. You know, to your point, beef inflation for these chains is going to be in the mid teens in the fourth quarter, so yeah.
Yeah, very high.
So definitely a lot of margin pressure for those chains.
You know.
Luckily, those two chains have driven traffic as of late into the stores which you know, and driven higher sales and been able to pass along price increases and that has kind of helped their operating leverage, which has helped offset the higher costs.
For the burger chains.
They there's less impact for the chains that we cover for McDonald's, Wendy's, Jack in the Box because they're largely franchised, so that the franchisees are the ones footing the bill for the higher beef costs.
Why, like, why do not all changs do like the McDonald's franchise e model. What's the benefits of franchising or what's the benefit of owning versus a franchise. I think I thought I would. I saw the movie. I think I understand the economics and franchising. It seems pretty good.
Listen, the franchise business, that's a great business, you know, and from where I sit as an analyst, you know, we love it. It's easier to predict the earnings and the free cash flow. It's it's a much more steady business model. Franchising eliminates a lot of the operating leverage and thus the risk to your margins out of the business.
Right. But if you are.
Running a full service restaurant chain where operations is very core to your business, think Darden, think Texas Roadhouse, you want to own and operate your source because you want to have control over those operations.
You want to make sure.
People are getting a good experience, and they're just much harder to run than a McDonald's or a Wendy's. And then I'd say, on the last case would be somebody like shake Shack or wink Stop or Cava. You know, when your cash on cash returns are forty fifty sixty percent, we don't think it's a bad thing to be greedy and you want to open up as many stores as possible are.
Thanks to Michael Helen, who covers restaurants and food services for Bloomberg Intelligence. Coming up, look at why the tech company Cisco maybe on a Goldilocks growth path.
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We moved next to more earnings in the retail sector this week. We got third quarter earnings from Cohle's and Abercrombing and Finch Coles raised its full year outlook for the second straight quarter. It's a signed the chief executive officer, Michael Bender, is helping to stabilize performance at the struggling retailer.
Separately, Abercromi and Fitch raised the low end of its full year sales outlook as its Hollister brand continue to gain momentum. We are joined by Mary Ross Gilbert Bloomberg Intelligence, senior equity analyst covering retail.
We first asked Mary for her take on Cohle's most recent earnings report.
They've kind of gone back to the basics. What's something something that clos has always been known for SO One is their private brand. So if you think about some of the brands like SO and Juniors, Lauren Conrad for women, and they brought those brands back because they actually sacrifice some of those brands under the prior leadership and replace them with some more name brands like Madden Girl, trying
to really attract the junior shopper there. And now that they've brought the private brands back, they brought back petite sizing, which was really important to their customer base. Now they're
really starting to see a recovery. But they're not out of the woods yet, Scarlett, as you pointed out, I mean, they're really cycling three years of declines, but we are seeing encouraging results and given that they actually turned positive in the latest month, it looks like they could actually reach a break even in the fourth quarter, even though they're guiding to a one point seven percent comp sales decline. So it's very encouraging to see with Cohle's again not
out of the woods. And when you look at what's going on with SO For, it's now a two billion dollar business and as you were sort of highlighting, that means they really lost you know, over the last four years something like four to five billion in other categories, so they have lost market share. We think they're losing it to off price and some of the value players in the specialty space such as Old. Maybe you know a gap brand.
Mary, I will also want to ask you about Abercomie and Fitch. It was the Darling two years ago because the new CEO found a way to make the brand relevant to a new audience. It was no longer targeting teenage boys, for instance, and really targeting young working women. But it's had a brutal twenty twenty five, a lot of concerns about tariffs perhaps and maybe even a lack of fresh ideas in terms of its offerings. What's the narrative with Abercomie and Fitch right now?
Yeah, so Scarlett with Abercrombie and Fitch, their numbers came in better than expected. So the namesake brand, as you pointed out, I mean that had been double digit increases over the last three years, so they're cycling those increases and that's why their sales are coming in less than expected. But this quarter the comp sales declined. There was about three point three percent, so that was better than expected.
And when you look at Hollister, though, Hollister has been coming in ahead of expectations and they've been posting double digit increases. So as you were talking about sort of the millennial women who really love and also the men, but it does tend to favor more of the women on the Abercrombie side, on the Hollister side, which really caters to gen Z that has been on fire, and so that's what's helping to kind of overcome the weakness
that they're seeing at Abercrombie. But also it's looking like Abercrombie could turn positive in the fourth quarter with a number of the initiatives that they have in place going into the holiday quarter, even though they're cycling some pretty strong gains in the prior year and the year before that.
Are Thanks to Mary Ross Gilbert, Bloomberg Intelligence, senior equity analyst who covers retail, we.
Moved next to some research from Bloomberg Intelligence in the tech space. It's titled Cisco and a Golden Locks growth path.
According to Cisco mayc twenty twenty six, sales above the top end of its five to seven percent target, and this comes as the company balances strong AI growth with networking gains.
For more on this, we were joined by Wouchinho, Bloomberg Intelligence senior technology analyst.
We began by asking Wooje to break down why Cisco's shares have had a good run this year.
So there's a couple of things driving it. That they're actually a massive forty three billion dollar a product upgrade cycle that Cisco will potentially benefit from, which is going to give them outsize growth in their core networking business. But their AI store has actually been a lot better than I thought. AI is going to be about three billion dollars of sales tripling or three billion dollars in sales in fiscal twenty twenty six tripling out of twenty
twenty five. So there are this goldly locks of good AI store as well as an upgrade cycle tailwind.
Paul was asking Michael Casper earlier about a lot of the tech companies issuing debt to pay for their AI buildout. What does Cisco's debt profile look like and will it also need to sell bonds to fund everything that's doing?
Yeah, hey' Carlo. So that's one of the great stories about about Cisco. I mean, they have roughly about twenty billion dollars in debt and roughly thirty billion dollars in cash, so look their net cash positive, they don't need to take on debt. If anything, they've been very active buyers of their stock, very good stewards of the cash, strong cash flow profile, and if anything, they're using their cash as levers to build up the inventory for the AI opportunity that's ahead of them.
So talk to us about just kind of the growth drivers for this company, which what is he looked at twenty twenty six, what kind of underpins their top line growth?
They got it to roughly the top of the top end of their four to six percent growth. I think they're going to do roughly about seven to eight percent growth for this year. So if we think about the AI story itself trippling from one billion to three billion, that's going to be the incremental growth that gets you above to the top end of their revenue growth guidance.
You know, the way I have networking flashed out right now, the networking business, you know, Xai is growing roughly around four percent, and that's probably towards the low end and quite frankly, if the upgrade's coming stronger than a lot better than we think. There's a little bit of upside. Now there is a little bit of drag. The security business hasn't panned out as as strongly as they hoped, primarily because it is going through this business model transition.
But you know, it would have been a story at another time. But the two stories AI as well as a core networking upgrade cycle. I mean, that's doing very very well in twenty six and if anything, I would argue we'd probably be better in twenty twenty seven.
Is Cisco part of this whole circular deal making, circular funding concern that has investors worried that if one company in this link stops spending or maybe slows down spending, everyone else will get affected.
To some degree.
Yeah, Scarlett, And that's why I think if you look at some of the AI stories there, it's one of the safe bets, right. They are exposed to some of the I would say the hyperscale names, but a very small exposure to it, as well as some of the neo clouds. They do sell some routing products and some of the sovereigns. Now, if that business disappears, you know, the cashflow story is still well intact. Right, If I calculate the amount of AI revenue relative their total total
revenue base. We're only talking about, you know, six to seven percent of total sales, right, So if the AI story collapse, I mean, AI evaporates, they're still in very good standing.
Not to mention the fact that they out a dividend too. I mean it's not a huge one, but a tech company with a two percent dividend yield to something and they've been steadying.
The sock was lower. Yeah, the soccer just to be three.
So yeah, there we go. I mean, it's not the like stock bog backs and a dividendil and an a story if it works out.
Our thanks to Wou Jinho, Bloomberg Intelligence senior technology analyst. We move next to the news in the media space. US President Donald Trump recently said in a social media post that no television networks should be able to expand.
Trump cited the potential growth of what he considers left wing news outlets. Trump's post was in response to a NEWSMAC story that said the FCC head Brendan Carr is moving to give television networks massive reach and push through a merger of Next Our Media Group and TAGNA for more on this.
We were joined by Matthew Shuttenhelm, Bloomberg Intelligence media litigation analyst.
We began by asking Matthew if he was surprised about President Trump's recent comments.
It's a moderate surprise, So it's it's not a complete surprise because Newsmax has participated before the FCC and had it has been one of the few voices that said, don't do this, don't deregulate this space. And what you really see here is President Trump latching on to an article written on Newsmax's platform opposing the easing of this
national ownership cap. What's in play here is that there's current FCC regulation says no company can reach more than thirty nine percent of US households, and companies like Nextstar and Sinclair want to go way beyond thirty nine percent. In fact, Nextstar has a pending deal before the FCC. They just filed their application last week to acquire Tegna that would take them to seventy eighty percent of the country, and it depends on the FCC deregulating in this space.
So Trump latching on to Newsmax's opposition because he's concerned about the TV networks growing larger is a concern. It's a real risk. I'm not convinced yet that it's going to lead to real FCC policy. I think this FCC wants to deregulate in this space, and I think there's going to be a pushback against Trump's view on this.
Okay, so the FCC is headed by Brendan Carr, who's been very active in making sure that he's out there doing the president's bidding. Are you saying that Brendan Carr is going to defy President Trump?
Yeah, So that's the big question here. The FCC used to operate as an independent agency, meaning even if the President had a view on something, the FCC could could chart its own course. That doesn't that's not going to work anymore the way this FCC is operating. If the President takes a firm view on something, the FCC is not going to defy it because effectively, the President can fire the FCC chairman then and you know, there's no
no future job prospect if you defy the president. What I'm not convinced about is, you know, this was one social media post from President Trump, and you know, talk about concerns about letting the broadcast networks ABC, CBS, Fox
get bigger. What I think there could be now in you know, on in back channels, is some education from the FCC to the White House that says, hey, easing the national ownership cap, it would let Sinclair Next Star get bigger, probably, but it doesn't necessarily mean the broadcast networks will get bigger. There's still an independent check on
that even if we ease this this cap. So ultimately, if Trump is against this, the SEC is not going ahead with it in my view, But I think there's still room for Trump's position to evolve on this.
So, I mean, the reality is, I mean, this is an industry, the broadcast television industry that is arguably on life support visa VI. Forget about cable television, which itself is on life support. They survive that on slot. Now it's just all about digital and social media. And I would think the industry would have an open would have an effective argument not just to the DJ but to the President as well.
I mean, that's the case that the National Association of Broadcasters has made to the FCC that these ownership restrictions, you know, which come from the nineteen seventies or even earlier than that really make no sense in the world we live in today, where where so much video that is consumed doesn't come from from broadcast, it comes over the Internet, and there are no artificial caps on how much those companies can reach, and broadcasters are left to
try to fight with one hand tied behind their back with these these you know, ancient FCC rules on the books, and the Republicans at the FCC, Brendan Carr included, strongly agree with that message. And so it's it's going to be I think a little bit of a communication effort that needs to happen between the FCC and the White House too, and the real question will be how does that play out. Does Trump's social media post actually translate to real policy. I'm not convinced that it will yet.
Our thanks to Matthew Schultenhelm, Bloomberg Intelligence media litigation Analyst.
Coming up, we'll break down corporate earnings at the retailers, Calls and Abercrome and Fitch.
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries.
You can access Bloomberg Intelligence through Bigo on the terminal. I'm Scarlett Foe.
And I'm Paul Sweeney, and this is Bloomberg.
This is Bloomberg Intelligence. With Scarlett Foo and Paul Sweeney on Bloomberg Radio.
We move next to more earnings in the retail sector. This week we got third quarter earning some Dick Sporting Goods and best Buy. Dick Sporting Goods raised its outlook again, However, investors were disappointed by costs related to turning around the foot locker chain it recently acquired.
Separately, best Buy raised its guidance for the current fiscal year as demand for the latest consumer tech drove revenue and profit last quarter.
For more on this, we were joined by Lindsay Dutch Bloomberg Intelligence Consumer Hardlines senior analysts. Let's start with Dick's Sporting Goods. They raised their outlook again, but I guess investors are focused on I guess some of the costs trying to turn around foot locker. Talk to us about Dick Sporting Goods at Lindsay.
The legacy business remained very strong in the third quarter, strong back to school, clear demand momentum heading into the fourth quarter. That's where the raised outlook came, it was really for the legacy business. But when we look at foot Locker, you know, the deal closed early September. The outlook for the fourth quarter is mid to high single
digit same source sales decline. Dix is also looking to expedite the turnaround there, which means offloading old inventory steep markdowns in that fourth quarter, which is going to really hurt the margin as well. So foot Locker, you know, needs a lot of work. Fourth quarter is going to be weak, and investors are really looking to see how quickly they can turn that business around.
Yeah, and probably they'll need to put some money into it as well to reorganize stores and freshen up the display. How much of this deal Dick's buying foot Locker was predicated on Nike and what it was doing with this shift back to its wholesale channels and away from solely relying on its direct to consumer offerings and its own stores.
So full Looker was, I would argue, over exposed to Nike. You know, several years ago they had been working that exposure down. I think Dix will remain focused on being diversified, just given that their own assortment where they're leaning into lots of other brands, new up and coming brands like
Hoca and on. They did discuss though, that Footlocker will sort of remain sort of a hub for basketball, and Nike does have a stronghold in the basketball market, so I expect Nike to be, you know, a strong vendor with foot Locker, but Dix is looking to make sure that they have that right assortment, the newest stuff, the hottest lines coming from Nike and others.
What is Di saying about tariffs in their business, so.
They are going to feel higher costs in this back half of the year and even into next year. Dix has since the pandemic, since they've been able to see sort of an increase in demand for their premium assortment.
They're not really a huge discounter for the holiday. They like to sell their product fully through, so I don't expect them to sort of discount and they have taken prices up selectively but certainly not across the board, and their higher income consumer is sort of accepting those increases.
I think Footlocker is a little bit of a different story, and you might see that impact a little bit bigger on that business, just because they don't have those premium products, and they're already going to need to offload older inventory with steep discounts, so you sort of have that turnaround compounded with these rising costs into the next year. Something for them to work on.
Lindsy, I also want to ask you about best Buy consumer electronics retailer, how to beat and raise quarter. It looks pretty good and it looks like it's on the usual strains sales of mobile phones and sales of computer equipment.
Yeah, so best Buy had a strong third quarter, better as better than expected, as you mentioned. I think, you know, the stock isn't getting a full bump because there is definitely some conservatism and a low guide for the fourth quarter, and investors are trying to figure out, you know, is it just conservatism, are they just worried about the consumer, or is there something really there that there's going to be a slowdown in that fourth quarter. But the business
looks good. Demand looks strong, as you mentioned, computing, phones, gaming all looking solid, and they're also seeing an improvement in home theater, which is really big because that has been a weaker category for the last couple of years. So if that comes to fruition, I definitely think there will be strength in the fourth quarter.
So you think about a best Buy, I mean some of the those are big ticket items here, and that would suggest that they go to a part of the case shaped economy made me that is doing better. Is that a typical best Buy customer.
So bez buy. Definitely, promotions are going to be a big piece of the fourth quarter. They're sort of leaning into those promotional events. That's what worked last year, and I think they're trying to lean into the things that worked last year for this year. And I do think the consumer backshop is quite similar when we do that compare.
I also, they also recently launched a marketplace and they seem to have a stronger focus on marketing and advertising, and so they're really trying to meet the consumer where they are and make sure that best Buy is top of mind when you're shopping for a wide array of things, not just those big ticket items like TVs or appliances.
So they're trying to have a bigger wallet share with consumers across the board, and they're leaning on that marketplace and advertise to do it and then hopefully get you into the store and that's where they can bring their customer service and experience as well.
That was Lindsay Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst.
We move next to the travel and leisure sector. We recently took a look at a survey from Bloomberg Intelligence entitled Consumers Maintain Vacation Budgets in twenty twenty six.
According to the survey, over two thirds of respondents to bi's proprietary Travel survey said that they will spend more to go places in twenty twenty six, about the same as last year. And this comes even with rising economic concerns.
For more on this, we were joined by Jody Lorie, Bloomberg Intelligence, Senior Credit Analyst. We first asked Jody to break down what she learned from BI survey.
So we do the.
Survey every half a year and so we just got the results out for the most recent one. And what's interesting is that we're seeing more people planning on keeping their budgets the same. But what's more interesting is that if costs succeed budgets, fewer people than last year said they'd increase their budget. And that's on the back of them knowing that inflation is a much higher risk for them for their portfolio.
So in other words, people are making room for time off, but they're going to have to scrimp more in order to make it happen because their money is not going to take them as far as it used to correct.
And Scarlett, I mean, I think to piggyback on that, if you look the eating out, anticipation of spending is higher this year than last year, and I think that's lesser reflection of people wanting to eat out, but more that they're expecting eating out is going to be more expensive. And so even though we're seeing people want to spend on paid activities and experiences.
Which could bode well for the cruise.
Lines and the theme parks, at the end of the day, when cost succeed budgets, more people this year over last year are planning on cutting and looking at free options. So going to the free museums, going to low cost.
Options, well, now that the government is open, DC is an option once again. How about in terms of destination, maybe staying closer to home, maybe not going quite as far Internationally.
Yes, and staying closer to home is very very much key.
If we see the.
Data, the international trend is to Canada. Canada bumped up to the second spot. So we saw that in the midyear, and it was pretty curious for US, particularly because when you look at it the opposite way, and we did this analys a few months ago. Canada is not coming to the US. They don't want to come to the US. It's too expensive for them, they don't really like the current government situation. And on top of it, I think they're scared about crossing the border and what it means for immigration.
So we're seeing Canadians not.
Come to the US, and we're seeing a lot of companies comment on that. But we are seeing a lot of Americans go to Canada. And I am curious how much, and this is going to come in further reports, how much of the Canada move is a reflection of the World Cup next year. There's a lot of people going to Vancouver, for instance, for the World Cup. I'll actually be there during the World Cup, but not going to the World Cup.
Why people are going to be there.
We might be.
Doing a very family friendly cruise to Alaska.
Nice.
It just works out that that's the same time as it was bad timing.
It's bad time, all right, talk to me. This is when I go to Aruba, we go to an all inclusive. How come I didn't know about this all inclusive thing when I had four little kids?
I mean, were they were they a thing back then?
I don't know, But I mean I would get the bill which would be five inches thick with like smoothies and chicken fingers and all that kind of crap that they'd eat throughout the day four kids. Man, if I had, if I knew about the all inclusive, that would have been a savior for me. What are people doing when they are they willing to still pay it for travel? Because I still here people going to Europe and stuff like that. I mean they're not going to Poughkeepsie, They're going to Parish and things.
Yeah, I mean Japan is certainly a popular destination. Strong dollar there, yeah, very much increased.
Italy has increased.
We're seeing among the upper income level, you know, Portugal and Spain as popular destinations. And I think probably it's even more interesting is onboard spending for cruises is still continuing to have momentum. At the moment, I think where we're watching is when that onboard spending shifts and then the cruise lines, for example, don't get that gravy for
cash flow. And to your point, Paul, I mean, even though you have something called all inclusives, even though you have the cruise lines, that they all are considered these package deal what every company is doing, and we're talking the rental car companies. You know, Abus is doing this too, obviously, the airlines is they're all doing these premium products.
These you know, you do different tiers.
Of products, so the add on so you can get the base level, which is really the skeleton package. But anyone from cruise lines to you know, theme parks to some extent, to the all inclusives, to the airlines, to the rental car companies are all segmenting to give you know, the lower income consumer the.
Ability to say that they traveled and.
The higher income consumer the ability to travel luxury.
And in terms of the add ons, what are these add ons are they? You know, things that they used to offer for free and now charge.
You for for some of it.
It is so you know, a good example I have is anecdotally, I know that some of the cruise lines that used to not charge to get people into the center of a city, say in Europe, you're on European Cruise, they used to get that for free. Now they say no, you have to be a part of one of our you know, expeditions, one of our one of our excursions in order to get that for free. Otherwise we charge you twenty dollars to get into the center's clown in you know, Czechoslovakia and not Czechosvakia.
Check republic.
He our Thanks to Jody Lorie, Bloomberg Intelligence Senior credit Analyst.
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