Boeing Deliveries Trail Airbus

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So Southwest, so take our LUV is down fourteen percent, So the company plans to cut capacity this year, halt most hiring and review it spending plans and response to reduced aircraft deliveries from Boeing. Here's my question. Is this going to be as simple over the next year? All the airlines are going to raise their fees and they're going to say it's not our fall, we gotta cut capacity because of Boeing. I wonder if that's what we're

So not everyone will be able to blame Boeing, right, So that there are airlines that are operating airbus aircraft companies like you know, Delta Jet Blue Frontier spirit. They won't have the problems that that airlines that are being supplied by Boeing will have, and they'll look to put as much capacity in the marketplace to take advantage of the fact that the airlines that are flying Boeing product aren't able to get all of the flying done that

Are flatish to maybe.

Going down for the year unless Boeing really curtails their deliveries for the year.

Yeah, it's interesting because if I read this issue about Boeing and I read this cutting capacity, but my first thought is going to be that that means higher prices for consumers. So what accounts for the difference there?

Well, first of all, I think the US market already had sufficient capacity last year, right, I think we're bouncing back from a pandemic.

We saw a bunch of sort of revenge.

Travel, you know, earlier in this in this bounce back, I don't and that was very leisure driven. I don't think we're going to see as much of the leisure driven travel this year, not that I got to pay whatever it's going to take to get down to Disney, so you'll see it maybe a small a smaller growth amount in leisure, and business isn't fully back.

We know that. So we've got twenty nineteen more.

Than twenty nineteen levels of capacity in the marketplace, less business and maybe a little more leisure. So when I add that all up again, I kind of see a market that looks like it's got plenty of capacity. If you look at the guidance that Southwest gave on revenue per available seat mile, they lowered that at this discussion, so tells me that the market is weaker. You know, at this guide's point, the market is weaker than they initially thought.

And at the same time, fuel prices were a little bit higher. So what it looks like to.

Me is Southwest numbers are going to come in lighter than we expected in one queue.

That's not a super healthy market.

That's on a market that's got so much constraint that they can price whatever they want to for airline tickets and make lots of profits.

Okay, so it's a trifecta. Like they do have a specific Boeing issue and the fuel prices and then the broader softer market that's a general airline issue. United also told Boeing to stop building seven thirty seven Max ten jets for the carrier. Okay, that sounds dramatic and bad. What does that actually mean?

You know, I think it sounds like Scott Kirby, the CEO of United, is just getting real about what he thinks Boeing can deliver in the near term. I guess you know, if you sit around and you kind of hope and hope and hope they're going to get the Max ten certified, and you wait on those deliveries based on that hope, and the certificatetion keeps getting pushed out and it's really hard to plan. So Scott Kirby said, hey, look, stop worrying about the Dash ten. Just bring me dashed on.

The seven thirty seven.

There's just almost no way they're going to get pushed out longer than what we expect given the problems in manufacturing and Boeing right now.

And what is that? So is there any redacross that we should start thinking about for Airbus?

Well, I mean, here's the challenge of this industry right the readacross is look, Airbus ought to be able to go get a lot more.

Orders for its Airbus A three twenty one.

But the problem Scott has, and he's a really good customer and they're working hard to find him slots, is that they probably can't get him three twenty one's for four or five years from now. Wow, So that doesn't fix his near term problems, and customers that would be smaller than United have an even larger problem because the air bus isn't going to work as hard to try to get him into the delivery cadence. The industry is definitely is operating at sort of max capacity.

Now.

It's pushing its supply chains to do better, but we just don't see increases of you know, build rates kind of more than ten percent per year at best.

It's really hard to bring up that supply chain.

So I think the duopoly means that Airbus can't really capitalize that well.

On this just anecdotally. I flew to Houston for like a day last week, and I flew there on a new Boeing jet for United and back on an old one and a man that was different, a very different experience.

Bring a wrench with you, Okay.

I did text my husband and I was like, hey, so I'm on this Boeing plane just in case something happens. What did I know? I'm like that, what is the floor though? George? For Boeing, I mean the stock is literally dropping like a knife. Here are we looking at the October low? Is what we have to be watching, Like, where's the support and where is the support gonna actually come from?

So like it's you know, Boeing has been through some real troubles and the bad news sort of keeps coming. Like it's hard to say what a price would be on that floor. I will say that I think they're purchase a Spirit that they've proposed could start to put a floor underneath their problems. I see that direct line of management from the Spirit floor in Wichita, Kansas, all the way up to Boeing in rent and Washington as being the ultimate solution to improving quality, you know, oversight.

I mean, if you think about what the challenges are facing Boeing, is there much of a difference to the company if we get a soft economic landing, a hard economic landing, or no landing.

Honestly, I think for all the air framers there isn't. Right.

So again, Airbus and Boeing building aircraft at rates much lower than their customers are demanding right now. You know, customers like Scott Kirby want to come in and buy a three twenty one's next three or four years.

Can't get them. So I think even in a.

Hard landing, soft landing, no recession environment, these folks just keep working on making the supply chain better, so the supply chain can put more of the components on the factory floor and build more aircraft.

Although I would.

Say maybe in a harder economic landing it might free up some of the labor that they need and keep some of the labor more stable at their suppliers. And that's really the challenge right here, is labor at the suppliers. Stabilizing it. You need smart people there who've been doing the process for a long time, so they do it right all the time, know the right processes and procedures.

Hey, George, if anyone listens to the show or watches TV with me, I am a deal person. I like me deals. I like all the deals, whatever the deals. If I want to look for deals for flying, where am I going to get that? Like, is it literally going to have to be sort of regional companies exposed to Boeing? Am I going to have to get that granular here?

Well? No, right way? I mean airline seats.

I mean that all the CEOs would complain that I say this, but I really find them largely as commodities, right, and so if you're going to find lower fares, I think you're typically going to find them lower across the board we are seeing. You know, it does seem to me that non premium leisure is an area of especially good you know, a lot of seats available, especially good prices.

That's good.

Oh man, fine, George ferguson Boomberg Intelligence and your aerospace, defense and airlines analysts. And let's be fair. I mean, like I want to sit in the front of the plane.

Who doesn't.

I mean, you know you want to pay, you want first class, but you want to pay Coach.

Boom He gets me.

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Small business optimism dropped nine month low. There's that. Also a CPI month on month coming in at four tens of one percent for February, so slightly higher sequentially. For the year, you're looking at three point two percent, also higher sequentially as well. So warmer wasn't hot, but did prove that January maybe wasn't a blip. I was calling it warm. Let's get the take now from Jeffrey Cleveland,

Maybe spicy, still say still too hot to handle?

Okay?

For Paul Makers, I think, I think, I think they're going to be unhappy with this sort of reading. So you know, maybe maybe one of those monikers would would work here.

I like spicy, Yeah, I mean, especially in food, but maybe not so much in inflation readings. So can you talk a little bit to us a little bit about why, you know, you've got this concern about the what seems to me just to be a little bit of a over an overshoot versus expectations for inflation, because there's a lot of, you know, enthusiasm in the equity markets, for example, that the FED might be on track.

Yeah, okay, So I think the context here is Powell appeared on Capitol Hill last week and he reiterated his view that we need to see monthly readings like we saw in the second half of last year.

So I think he's referring there to core.

PCE, not so much Core CPI, but we had some soft month to month change readings in the core measures in the second half of last year, so we need to see more of those, not necessarily better, but more, and a number like point four for core CPI month to month for January and again in February.

For me, that's too that's too hot.

So it's it's going to disappoint policy makers from that perspective because they want to be convinced that inflation is going to sustainably return to two percent.

I think this raises some questions. January could have been a fluke, but two months in a row not so much.

So does that mean we have to lower our expectations for inflation like it's a trajectory, it's not the final destination kind of thing, as I think Powell's been alluding to.

I think investors should imagine that the FED probably will cut rates this year, but it will happen later and.

There'll be fewer cuts. So we have the first cut.

In September and we have only two cuts for the year. That's going to be disappointing for only.

Two cuts for the year.

Okay, that's interesting, that's right, and that's looking at the destination where we think core inflation will end the year, but also thinking about the path to get there. You know, I think, well, there's not a one for one here between core CPI and core PCEE could imply that when we do see the core PCE numbers later this month, they will also be a bit spicy, and so that that's going to be again disappointing for policy makers.

What do you make of the markets reaction? I mean, we had very little movement and bond youill to start with, but now equities are very firmly up.

Yeah, yeah, I don't know.

Maybe investors had a hint that things the inflation would come in stronger, That could be possible, or maybe it's just going to take a bit more time to digest the implications here.

I also, I know, you know, just from talking to.

Colleagues and co workers and competitors, you know, you hear kind of some positive spin here, the fact that February's core reading wasn't as bad or wasn't as hot as January's. So we did see we did see a little bit of a cooling relative to January.

So maybe some good hints in there.

But you know, I like to look just you know, looking at core CPI month a month, but also looking at median CPI. The median CPI just looking at the median price change that just dropped from Cleveland FED and that was also.

Point four month to month after a point five.

So I still think underlying core inflation is a bit too strong. Market probably will wake up to this over the over the next few days.

Okay, so market wakes up to it. I appreciate your an economists, but what happens, Like, we've already seen some selling across the bond market. We've seen sort of the back end catch up a little bit here with yesterday is selling in the front end. What's going to be the ramification?

Yeah, I think higher, higher bond yields across the curve.

Implication would be, you know, pricing of fewer cuts, pushing out the timing of cuts. That could also have an impact on risk assets, equity prices, credit spreads in the bond market. I think that could ripple through as well. So you know, really it's the bond market that is the key driver here of everything else. So the implication is higher, higher bond fields for longer.

So now I want to ask you about a theme

Well, I just think back to twenty sixteen we saw rate hike at the end of the election year. There's been some other instances, you know, twenty eighteen we had four rate hikes throughout the year despite we had midterm elections. I think investors like to talk about elections, they love to talk about politics, but really I think it's going to be the inflation trajectory that determines what happens with

I think that's the key story the election.

What happens there is not I don't think it's going to change that now for twenty twenty five, that's where the election really matters, right, because that could change the tone of fiscal policy in the coming year. So I do think if the Republicans take back the White House, then you could have a more aggressive or expansionary fiscal policy in twenty twenty five. And again that could have some some BONDI old implications, but it's probably a story for late twenty four and into twenty five.

Let's put that aside for a second. So you see two this year, and then how many cuts? Then are you sort of mapping out for twenty twenty five, like the whole rate I think cut cycle.

I think it's possible that you could see one, you know, sort of a pace per quarter in twenty twenty five of one cut per quarter, so you get an additional three or four in twenty twenty five, something like that. So certainly no slashing of the Fed funds rate, not

So the FED funds rate stayed.

In a pretty narrow range from say, nineteen ninety five until nineteen late nineteen ninety eight.

And there's nothing more like that.

There's no dramatic falloff. Then, in that depective, the.

Question is, how would you get a dramatic falloff? To me, it has to be an economic downturn. It has to be a recession, so you have to have that in your your forecast. We're more upbeat. We think the economy will continue to grow out over the next year.

Doesn't he He is here even like looking about on YouTube, like his energy is like he's into it.

He's he's He's still California. The California vibe here makes sense.

The good weather, Yeah I know. But now look, let me ask you about consumer sentiment, because you know, there's the inflation squeeze pinches everyone's pockets, and yeah, inflation is easy, but the prices are still a heck of a lot higher than they were before. And this is something that we've been well established has been weighing on enthusiasm for the Joe Biden economic program. So how do you see consumer development, consumer sentiment developing.

Well, just talking to virtually, you know, all clients, they say, hey, Jeffery, you're saying that inflation is cooling off. But you know, I still see prices elevated at the pump, or I still see expensive food prices. So I mean, the difference there is just rates versus level. Central bankers are focused on the rate of inflation. I think the average consumer is focused on the level of inflation. So that's the disconnect you see as a result, that's weighing on consumer sentiment.

And so that's just a fact. I don't think there's any way around that.

But this was brought to the attention here knows this, but Jerome Powell was asked about this last week on Capitol Hill and he said, look, we're we're not expecting to see price level fall, the average price level fall. That only happens in very adverse you know, economic scenarios like a recession. You know, what they're trying to achieve is a slowdown in the rate of increase, trying to get that back to two percent. But we've already talked

All right, really good stuff. Appreciate the positivity. Jeffrey Cleveland, chief economist at Paydon and Regal. He joins us there, but then the flip side, you have more, you know. Morgan Stanley's Mike Wilson says he doesn't see a need to raise the S and P five hundred target. There's no justification in the absence of broad earnings growth.

Now.

That is in contrast with an idea that maybe it's okay, like we're not going to need a huge downturn in order to get fed cuts. You can make do with five maybe six for the total cycle.

I mean, going back to the nineteen nineties rates around five percent or so, that's very long way from what it was at twelve thirteen percent or what have you. And so if you think where are we right now, this is definitely an area that we can live with.

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Let's take another look from an investor perspective, what do you do now? Like we got through CPI, it was a little bit of a sell into the news and then buy the news kind of situation. We're still going to grind higher here. So it seems Bank of America now upgrading their earnings forecast, really looking at a hyper investment cycle when it comes to the big tech guys.

So what do you do?

Margie Pateel is senior portfolio manager at all Spring Global Investments and she joins us. Now, Margie, do you buy into this now?

Like?

Is there again? It feels like we just can't sell so you have to throw in the towel here and buy no matter what and hold on.

Well, yes, because fundamental ad economy looks in good shape. It looks as if we're growing, say between two and three percent, which is good enough to have earnings up say ten or twelve percent for the year. So that's really pre attractive for equity investors. And you can see the FED is really betook between that'd like to cut rates, but they really can't when inflation is so stubbornly a little bit about their target.

So that's why you're seeing mixed signals.

Bottom markets are down a little bit in price, but equities up a little bit in price.

Can you talk to me a little bit about your take on the equity market. Where do you see investors should be concentrating, Where do you see that they should be staying away a little bit?

Well, I think it's still the same themes that we had last year. Although the market might be broadening out a little bit, it's still sticking with companies. It's fundamentally look like they have above average long term secular growth. So that says to me the tech sector is still going to be one of the strongest. Is certainly volvable as short term traders change their settlements here and there.

Basically, I think.

The trend is still your friend in technology, and I think in industrials, particularly those companies are going to benefit from shoring from higher capital investment in certain areas. I think those companies are going to do well, their price reasonably, and they should have growth that's actually pretty competitive even

What about industrials, We just heard Techer talk about three M changing CEOs. That has been a really rough ride for three M. They pretty much like make everything, and they have so many parts of their business that sometimes that winds up hurting them. Where in the industrial space might you be looking.

Well, I think three M is really a special case. You have to look at the company, the fundamentals. They just have a new CEO and look at it afresh. But as far as the rest of the industrials, I think that they should on balance look pretty attractive because a lot of them will benefit from higher capital expenditures.

What's your view on more consumer facing companies. We've still seen inflation quite powerful and consumers get still feeling squeezed, but at the same time it's a hot job market, hot salaries.

Well, I think in the consumer sector, I think that the discretionary sector is likely to do it a bit better than the staples sector, simply because people do have more people have jobs. We have sours going up small enough, maybe not enough to totally compensate for inflation, and the staples I think is a sector that.

I'm sort of warm on. I think it's going to be hard to there's.

Excess capacity, they don't have pricing power, and fundamentally those markets are rather slow growth. So unless a company can reinvest himself in the stable side, we think the discretionaire is a better place to be for consumers.

Hey, Margie, do my homework for me. I try and come up with a couple of themes every day, like these are the main questions that we're all thinking about. These are the main themes. I gotta tell you, I don't have one today. It might be me. I mean, I'll put it out there, it could very well be me. But what's my question today? What are the main questions we have.

Now, Well, I think it's just more of the same and really do nothing because there's really not a lot of productive things to do here.

Okay, so it's not my fault. My takeaway is that that's not my fault.

Oh no, position, because they would love the cut rates, but they really can't when inflation is stubbornly high, trends coming down but not enough to justify cutting rates, and they're well aware of the interest rate burden with the huge deficit, so they really betwixt in between, and so they really can't do much except maybe, you know, talk every now and then, and the companies are just motoring right along. Our earnings are once again surprisingly good in

You know, there's one theme that will never fail us and Alex, I think we can always have this in our back pocket. Is the election coming up, and I think it would be an interesting thing for you to talk a little bit about how you see these trends developing in this and half of the year, Bearing in mind that I think it's pretty safe to say that we're all gearing up for a very hardly closely faught election.

Yes, well, I thought coming into the year that the first half of the year would be very chopping up and down and not really make a lot of.

Headway either way.

It's surprising me with how well we've done in the in nasdak and standard pours up well over six percent, dal Jones up maybe close to three percent, so that's a.

Little better than I would have fought this point.

My thinking is we may still chalk around with worries about slower growth, inflation or whatnot, but typically inflation in election years or good years for the equity market. So I think in the second half of the year, maybe towards the end part of the year, we should see a rather strong rally into the finish, regardless of which candidate wins, because I think that it'll just reflect the lack of uncertainty and the fact the economy still has

But to your point also, Jen, you know, if you played the themes the last election, they didn't do anything for you, Like clean energy stocks fell after President Biden, I mean taking went in office despite the IRA for example, right, Like, so even if you play those themes like doesn't always work out.

Yeah, I mean you can have a theme, but what it does for you is a separate and.

Very different story. Yeah. Hey, MARGI you sound really positive, you sound really bullish. I mean, why would the FED cut.

Well, because I'd like to cut because they would like they would like to see inflation come down.

It hasn't a blow actud. I think it's been a slow go on.

Inflation and as I said, they really are aware of the burden that interest rates are going to have as they go higher for financing the federal deficit. It's it's not a small factor, So I think they have to be well aware of that, particularly when likely to continue to have definite financing as far as God can see.

I think companies have shown they're pretty resilient.

They've restructured their balance sheet, and they're relatively insensitive to as particularly moves in short term rates and really long rates aren't high enough to do real corporate profits. So we think you really have to be positive. If you look at the history books, you'd say, yes, if that is going to cause a recession, but they haven't now in two years, and I don't think that that's they

Yeah, all right, Margie, thanks Lott, We appreciate it. Thanks for Geponoma. That's margat Patel, senior portfolio manager at Allspring Global Investments.

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Oracle stock of eleven percent so shares a rally at the infrastructure software A company reporting third quarter results the beat expectations on some key metrics. Here, we want to get more with Brody Ford Bloomberg, a tech reporter joining us. Hey Brody, why why was the street so surprised?

There's been a big debate over the last year. Can Oracle transform from this kind of old school on premise, come to your office and install it on your servers kind of company to really offering cloud infrastructure the way we think about Amazon or Microsoft doing. The last couple of quarters, they were disappointing and people were starting to wonder is this a flash in the pan? Is their growth sustained? Yesterday they said, hey, no, we actually got

But I guess you know, they've been having their ups and downs. Their shares got really badly hit relatively speaking, and so do you feel like the recovery today is for real or what's going to be the next waystation that investors have to look for.

So what's convinced them is that when you're offering cloud services, people forget the cloud isn't in the sky, it's in data centers in Virginia and they need.

To build them quote of the day.

Yeah, and so Oracle said that they're going to spend ten billion dollars next year is building up these data centers. And keep in mind a couple of years back they were spending two billion new year on capex. Now it's ten. That's a real difference, and that's convincing investors that, hey, they are actually building out their physical infrastructure. In the AI era, everyone needs more cloud, everyone needs more of this computing power, and Oracle does seem prime to actually

I thought we didn't like it when companies spend a lot of money on stuff.

We like it if it's going to come back and give us something else, right, I mean, what was that time?

So they're gonna in mess all this money? When do they make money off of the money they just spent.

Yeah, it seems like it'd be pretty quick, because if you believe the executive's on the call, you know, executive grand stand Sometimes what they say that demand outpaces supply. They've been saying this for a while that with the AI era, everyone's rushing to get more computing power. They can't provide it. So the second these data centers go live, in theory, they should be able to convert that into revenue very quickly.

Are they good at doing that quickly relative to other companies?

They are known for ruthless operational efficiency, so they should they should be good at this, right, I mean, of course the market could change. Right, Everything looks rosy with AI right now be able to train their own models. Could we see a sea change? Hard to say, but yesterday they got eighty billion in bookings. Once you book you can't get out of it, so it's for a while.

So I as some find it's interesting if we're gonna see cloud computing and AI be a cyclical industry or not, Like, clearly it's a structural shift. But will we see a ton of data centers come on at the same time, like from different companies, and then their core prices go down so the revenue isn't as hot, Like will it be cyclical like chips are, for example, or not?

It's a good question. There's one rule of software compared to hardware that software is a lot stickier, right, I mean, you buy chips, you have them, you don't send me to buy more. Once you start giving money to solvetware providers, you plan on x amount of come you know, computational power that usually doesn't go down. I mean, is there a point where the growth will level off? Probably? I struggle to see it being like hardware, where hey, everybody

Anymore, and then it's all they've got you on the subscriptions basically like what we all have at home. But now, can you talk a little bit more about how Oracle is benefiting from AI.

Yeah.

Well, and that's the big question for a lot of software makers. Every software maker when they have positive results, they say in their commentary, this is due to AID anything. They call their new cloud version the Gen two AI. Is everybody using it for AI? No, But what we know is that AI requires a ton of computing power, and Oracle has marketed there specifically for being good at training AI models. And so there's reason to believe that

So it's still the cloud. It's still it's the cloud, the data centers building all that up.

Yeah, you know, think about you know, any company's running all these you know, records, the terminal or anything like that. Just it's more that kind of tradition stuff at this point than it is training models, though that's probably part of it.

I did want to point out too that maybe you can comment on this one that Bank America, the reason why they upgrade their earnings in part was because of an investment cycle from big tech Microsoft, Amazon, Google, Meta spending one hundred and eighty billion dollars in cap X. They're in that reinvestment cycle, and I'm assuming you guys like Oracle are going to be beneficiaries. Is that a link I can make?

I think it is probably more that they're all riding similar trends. You know, Amazon, Microsoft, they've spoken also in recent quarters that their customers are really focused on cutting costs. That for the most part, everybody had transported a bunch of things to the cloud and then they wanted to cut costs, and that behavior was starting to change, you know, the twenty twenty four budgets got approved. They started feeling

You know, let me ask you something internally about Oracle. Who's running the company? Is it Larry Ellison?

It's crazy, right because you think about somebody like a Bill Gates that's the same generation. He hasn't been there for a decade or more. But yeah, Larry's still running that. I mean, he's his title is not CEO, but he's chairman and his CTO he's you know, on the earnings call talking back and forth with analysts. For someone of his age and his generation, it's rare to see him still running the company. But he continues to and there's

What's the deal with that, though, I mean, why is he still around?

Haven't you know you found a company, it's your life. And for the most part, investors still like him.

People still see.

Him as this kind of tech visionary type. You know, every single analyst day he takes questions for multiple hours. It always goes over time. It's almost like the you know, Putin's annual address when he goes with her reporters.

It's great comparison. We definitely want to live with that comparison. But nonetheless, I do feel like the cloud is not in the sky, it is in Virginia, and data centers in Virginia might be the best line I've ever heard, which kind falling up yesterday when eq t he bought the Midstream company, they did say that they're like, all the data centers are going to be built in the South, and we need the natural gas to power them, so

I did not because my stab body knows his onions, as they.

Say, and he knows where the cloud is not in the sky in Virginia.

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Other stock that we're watching today is Cole's ticker kas ort Kiss. That stock is down by about two and a half. It's operating margin forecast for the year did trail consensus estimates, and the midpoint of its annual earnings target range also fell short. To be honest, I've been to a Cole's once, but they send out.

The coals bucks, which you know, big discount. I'm surprised at you you don't get that in the mail. No, Cole's bucks. They're like little you know.

I mean, I appreciated the store when I went in there, but I ordered a pair of shoes for my daughter and they came in completely the wrong size. There was a small chance I mis understood the size. But let's just blame Coles. I've been there once.

I've never been Tucker.

Oh yeah, this is where Tucker shops my pants. That maybe this is maybe this is Cole's problem. All right, let's get more insight. They need Jen and myself to get.

There.

Nobody would shop at a place I go shopping.

No, just that they also need us to go All right, Mary Ross, Gilbert b But we'reg intelligence in your equity analyst who covers retail joins us. Now, is that the problem? Jenna and I need to go shop there and not just John Tucker.

Well, Jena and Alex. They do have so Fora, and I'm sure that Sofa carries the brands that you care about. So so for has been a key driver for Coals, and that's the reason why their sales aren't that bad. You know, if you look at the comp sales, they fell one percent in the quarter at the stores, so total comp sales were down four point three percent, worse than consensus three percent estimate, but digital sales were down

But I guess if we talk about what's good in their future, it sounds like it's a lot of stuff.

That is not Coals.

It's so far it's babies are us. What's the issue with the fundamental core coals offering.

So they're revamping the merchandise because that was part of it, is just not having the right assortment. They're redoing shoes and they're going to be bringing in sketchers. They already have Nike, they have Audi Doos and now you're also going to see them bring in some youth brands. So they're going to bring in Quicksilver, Errol, Postall Madden limited to in Roxy, So those are also going to be

Yeah, that's so interesting. When I went and I was looking in you know, kids grow like weeds, right my daughter's nines. I was looking for pants and I was like, oh my god, they have Nike. I was like, genuinely like it. I had lots of those moments whilst walking around.

I'm gonna have to check it out.

It's also a place where I think you could still bring back your Amazon stuff.

Yes, yes, yes, yes that too. That's an excellent point. So okay, we're listing the good stuff. So Mary, why why is a stock down two point six percent? Like, I just feel like it's getting beat up a little bit, and I'm wondering then the why.

You know, So you were you raised a good point. You you brought up earlier that they're going to be missing consensus estimates for operating margin next year. And part of that is because we had a new ruling that came out from the Consumer Financial Bureau saying okay, we're going to cap late fees on credit cards to eight dollars.

So what's the consumer favorite these days? I mean, we see you've listed all these interesting brands turning up at Coal's, but is that enough to get the consumers through the door, or you know, can you think more broad Can you tell us a little bit more broadly about the retail space. Is there are there other shops that consumers are preferring these days?

Yeah, well, clearly off price and when you think about what's happening here with Coals, they're buying more frequently, which is more of an off price strategy. They're all the buying occurs on a weekly Basis's ing Tom Kingsbury who's the CEO. He is the one who turned Burlington Stores into the fast growing off price retailer that it is, so has he lends a lot of credibility and a number of the initiatives that he's already employed is already

True, really good stuff. Really appreciate that, Mary Ross Gilbert, Bloomberg Intelligence and Equity analysts covering retail. Right, you go return something, you go buy something. I mean that's literally my mom's entire life shopping.

It's a very solid business strategy and.

Return it and then I'm going to buy something when I'm also there.

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