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The Nike putting up some good results.
The stock is up fifteen percent here today. That's got a market kappa north of one hundred billion dollars.
Put them oil.
She covers all the retailers for Bloomberg Intelligence. She joins us now pooh them. The street likes what bloom What Nike? You had to say? What did you hear on their earnings?
Yeah, you know, it kind of seems like we hit the bottom, so I think, you know, there's only upside from here, is what it seems like. The results weren't spectacular. Sales still fell twelve percent, but they're expected to fall mid single digits in the first fist whole quarter, which was ahead of consensus. And it seems that things are working. The holiday order book is up, so you know, positive things going forward, and still a choppy environment. We're not
at positive sales. It's still going to take time, but I think we've hit the bottom.
Hey, put on what is it?
Though?
We were breaking it down with you last night after the earnings broke and the stock was kind of bouncing around, you know, and so obviously some stuff got clarified on the call with.
Analysts and investors.
What is it in particular did they say or say over and over again that kind of gave investors hope and saying that, Okay, yeah, maybe the worst is over.
Yeah. The first thing is on the inventory, and we spoke about yesterday inventories were basically just flat right, and you expected to see them down more. They talked a little bit about that, and they talked about how the order book is stronger heading into the holiday season. So that is why they're building up some of the inventory. They're continuing to clear out access inventory of things like the dunk, which they have too much of and they
actually do want to get rid of. But then they're building inventory of new things which are selling, which there is demand for. Store sales were positive, the holiday order book is positive. Those were really good indications as we move forward, and their guidance, of course was better than expected. So I think all of that together just kind of sent the message that we're going up from here, things are going to get better.
Pudin What are they saying about the impact of tariffs, either on their cost structure or on consumer demand.
Yeah, so tariffs definitely have an impact on their cost structure. We sought in the margin guidance, which there's one hundred basis point hit from tariffs. It's a billion dollars in additional costs, So there is definitely implications from that. They are able to offset a lot of it through price increases, internal efficiencies, supplier negotiations, but it's still going to hit the margin line. In terms of demand, it's not clear
that it's actually pulled back any demand yet. And the way the Nike is strategically taking up these price increases five dollars on shoes that are over one hundred dollars, no increase on kids, et cetera. I think their customer can absorb that without pushing back meaningfully unless things deteriorate in the consumer macro world from here onward.
But am I going to tell you Paul's got a pretty snazzy pair of loafers on.
I'm just going to say I love the color. They're pretty cool. I don't know if he has snowfers yet from Nike, but I mean these are not inexpensive.
We talked about that last night too, and the resale of some of them going for like five hundred dollars. I mean, this is a company that does continue to have the ability to innovate and really capture consumers and you know, really be a product in demand.
Yeah, you said it absolutely right. You know, Nike just needs to innovate. It needs to bring performance product, it needs to bring style more of it. It's not that they never did it. They did, but they just needed to continue to be at the cutting edge of it. And they're coming back to that. They're coming back to their roots, they're coming back to sports, They're coming back to innovation and being the brand that cuts out the
newness first. So I think this is one example of it. Clearly, it's not going to be you know, the shoe that's going to be made in you know, millions of quantity. So that's why you're seeing it on the resale platforms. But as long as they stay true to performance and sports, I think they will continue to do better.
Hey put them in in the sneaker business.
How important is the athletic endorsement, getting signing up the newest pro that kind of thing. I think a Cooper flag, the number one draft pick in the NBA. Do g Red wondering if that's still a thing.
It is a thing. I mean, Nike definitely has a deep pockets to get the athletes that are already some of the biggest athletes. But when you think about the rookies are the ones that are coming up. If Nike could secure the best ones, it definitely helps them because they resonate and they connect better with shoppers. So creating a line for them or creating the shoe that they're wearing or their own shoe help to connect with the shopper. And that's how some of these other rivals of theirs
are making their mark and really taking shares. They're investing and they're getting these rookies and they're able to draw these connections that help them. So I do think endorsements in sports and getting the right athlete is still very very important to the game and to any athletes.
Share brand, all right.
Put them Oyle, thank you so much. We appreiate it. Put them Oyle.
She covers all the retail companies for Bloomberg Intelligency based down there.
At Princeton and New Jersey.
A great quarter from the perspective of the market stocks of fifteen percent.
It had been down, you know, kind of on the year or so.
As Punham suggested, it seems like the market's saying these guys have kind of hit bottom.
They've kind of now have some runway to go. So we keep an eye on that.
Even with that bump up, as you said, sixteen percent or so, it's still done about four percent yeter date.
Just shows you what it's been coming back on.
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Carol Masher Paul Sweeney, We're live here at the home of Michael Lobe out here in Southampton and New York at the annual Uncharted Summit where they get together a whole bunch of entrepreneurs, funders and they talk about creating business, creating value. We're joining right now by our co host Michael Lowe, founder and CEO of lob dot NYC and no Freedom, CEO of Uncharted.
Gents, thanks so much for joining us. Got the light blue and the dark blue.
We're looking solid here Hampton's Casual.
I got my support, cooks, my best effort I can do.
Michael, talk to us about what this conference is about.
What do you guys really look to do here.
So we're not going to talk about your wardrobe.
We're not going to go there because got great flowers.
On it looks amazing. Check busses.
Yeah, somebody dressed you in the morning exactly. So what the intention is is that Noah and I started building Uncharted four years ago, was in the teeth of COVID when nobody was getting together with anybody else, and we started having dinners at my house in the city.
And was very popular.
And what the thesis is is that entrepreneurs need as much support as they can get, including emotional support, and the best way to do that is put entrepreneurs in a room with other entrepreneurs and they are as a class. They drive the economy, drive jobs, drive wealth, and yet there I think underappreciated, and as a serial entrepreneur myself and actually one or two things worked, I'm very empathetic and just with all the miles on the tires. I
am kind of a senior statesman by definition. Right, this is a young guy's game. I say that I have the privilege of working with people half my age and twice as smart. I used to say that. Now it's three as smart and one third of my age, but that was the intention. And it's grown to tribe of maybe twenty five hundred entrepreneurs, of which about a third of them show up to this, so we will have about eight hundred today.
No, come on in on this.
You're the CEO of Uncharted too, right, and so we're seeing things being set up. There's going to be a lot of great conversations and speakers going on. Tell us what it's been grown into and what kind of conversations are going to be happening later on.
The common thread of everything that we've done it Uncharted since the first dinner on May twenty, twenty twenty one. And I'll never forget it.
Was it just you too? By the way, Justice us.
To a dinner. Yeah, it was just us too. We just sat and talked for four hours and here we go. No, not about it. We also held ounce we did all dance the whole time. Yeah, it's very romantic.
Now, we had about twenty entrepreneurs around the table, kind of yeah, eight of each of our friends and then
a couple of others. If you will look, the common thread of every single event we've done, whether it's our dinners or the past three summits of the breakfast we've done, has always been trying to create safe spaces for real entrepreneurs, founders, exceptional particips bent in the entrepreneuri community, as we say, to truly drop their guard, drop their hair, and trust that they're in an environment where they can speak openly and honestly any entrepreneur or anyone who's building and really
doing it, the real ones. Hopefully this will resonate when they hear it. It is really f and hard. It's very hard to build businesses. It's really hard to play this game at the high level. And I think if we can offer a rare environment where people can feel like they are amongst their true peers, or they can really drop their guard and connect with people in a place where no matter who you go talk to, they're all going to be exceptional.
It's special.
And so we've really tried to guard the energy. We've really tried to keep the sanctity of the fact that if you come to an uncharted event, you're going to meet someone amazing. And that's really been the common thread.
I just want to say, it's a reminder of that, like Google, Apple, all of these companies that are now you know, the biggest market caps that are out there and that we talk about and you know all the time. I mean, they all started as an idea an entrepreneur. And that's the point.
Yeah, one percent, And if you look at kind of success rates and everything else, if you're an entrepreneur, if you really knew all.
That stuff, why would you you do this?
Because the failure rate is incredibly high, hours are incredibly long, the pay you know, is dreadful until it's not until you have a big score.
But the number of big scores is very very small.
And there's so many forces and so many you know, so many exogenous things that are you know, anti entrepreneur that we wanted to have a sanctuary here that other entrepreneurs can meet other entrepreneurs. And Noah, you're fond of saying that not a week or two goes by where we don't get a phone call saying I met my co founder here two years ago.
Yep, No, who's a What are the areas that are most interested entrepreneurs today?
Is it technology? Is healthcare?
Are there certain industries that are getting most of the attention.
Look, I think the obvious buzzword that you can't go too far in any of the new cycles to that hearing is AI. And I think that unlike other cycles that have come and went and entered the Zeitgeison left, this one feels very real. I can tell you that amongst all my friends, whether they're in CpG, health tech, pure AI, deep tech, what have you tech, and all of them are thinking explicitly about how AI is going to impact their business if they're not already, and how
they're going to get into it. So I think we're certainly going to talk about that a lot today. I think it's top of mind for a lot of people. The movement is real. I think that the implications and repercussions are unclear how it's going to land right now, but everybody's thinking about it, and they should be.
But I think it's unclear, but it's going to be brought, It's going to be broad it's going to be brought and you mentioned cycles. I've been around for a few. This reminds me of the late nineties, where the Internet happened and we had a lot of false starts.
Two three years ago.
Everybody was talking about NFTs before that, blockchain before that, cannabis before that, you know, something else.
But this feels like another eruption.
This feels like another advent of the Internet, one that we haven't had in absolutely years.
Yeah, on the same level, no doubt about it, or even.
More I think on the same level.
Yeah.
I mean, you know, it's hard to project and predict, but I had breakfast with a heroic.
Entrepreneur a couple of days ago.
He has built a business now worth one point eight billion dollars, and over breakfast, he says, I have two hundred and seventy people by year end, it's going to be one twenty.
Yeah, okay, interesting.
I would add to that, if I'm may, sorry, I think that there's this interesting tension with AI right now where I think Michael's right, and I would even argue that this might I didn't live through the late nineties period of seeing it at least all right, let me see, thanks for having me guys, if.
You know, but I think that let your hair down shot.
Why.
I know, it's crazy everyone asked me that, But I think there's an inherent tension where I actually think it could be more disruptive and at the same time, I do think that there's a lot of people who are betting big dollars than AI that are going to get wiped out because I think there's going to be an absolute power law dynamic here where small select group of companies at the top end aggregate a ton of power and resource. I also think it's going to be a
Barbell warre on the bottom end. You know, I've invested personally in companies that have like two or three people on the team and have rocketed millions in are because they're able to get ten x productivity if it's a killer founder. So I think there's a Barbell thing happening right now where the killer founders who actually know how to leverage resources are going to crush it, as are the big businesses.
Well.
Because of that and what AI can do generative AI and so on, I mean, does it give entrepreneurs even more opportunities to start up? We talked about that after the pandemic. Basically create a website and you can go and then maybe that's simplifying things, But does AI kind of have a multiplier effect to on entrepreneurial.
Activities Without a doubt, I think that's opportunities.
I think that's right.
And if you just look at what has happened over the years, you know, it used to be that if you build a business, a brand new business.
In the Internet, you need it.
You needed hundreds of people, right, and now that's really compressed to just a few.
But to Noah's point, there's.
Going to be winners and there's going to be a lot of losers, and that's very hard to predict.
Michael, talk to us about monetization. I'm not seeing a lot of IPOs. I'm not seeing a lot of m and A. How do these great entrepreneurs monetize the value they've created?
That's a that's a great question.
I would I would say that everything you just mentioned is part of a cycle, and we're just in that type of cycle where everything is a little bit bollock stop uh, But you know it's it's we're going to be on the other side of that and there's going to be some great companies built, and there's going to be some great flameouts. A lot of people are going to lose a lot of money, and then there's going to be a few that are going to be extraordinarily successful.
But to your point, we can build it now with instead of three hundred people, three and there's been predictions that there's going to be a unicorn with all of three people.
Serious, Yeah, I do that.
Yeah, Okay, that kind of makes sense. And we've started to see IPOs actually in general come to market and it's a much more favorable market. I got to ask you, I think we'd be remiss of the macro that's going on and different policies in the world being upended in geopolitics. What does that do for the entrepreneur, entrepreneur who's trying to you know, we know it can be lean and mean in the beginning when it comes to a startup.
What about some of these macro issues, what would be more helpful to them?
What kind of.
Environment, well, anything that helps with capital formation, anything that kind of reduces regulation. I was hopeful that this administration would attack some of that stuff and maybe not terriffs, but anyway.
It's still early, it's still early.
We're here now.
They are very active and very proactive, and I'm just hopeful that what you really want to give is entrepreneurs just charter. I mean, let them do their thing as much as you can. And our hope is by the way that this environment, believe it or not, will put a dent in that world, right, that they will find support here in many different ways.
Well, I always think it's kind of amazing how much time we spend and obviously this is our world, right, the publicly held markets, right, this is what we track, you know, all the movements. But we talk constantly about the importance of small business and startups in terms of the backbone, and I just think it kind of gets lost a little bit.
Yeah.
I do think though that you're going to see AI up end just about every industry, and I think those big companies are going to find themselves woefully behind and they're going to have no choice but to make some acquisitions.
Well said, no, what capital is it out there for entrepreneurs today?
It is?
But I think that you're seeing an interesting dynamic with the vcs and private equity that they're chasing a lot of trends almost blindly. You know the fact that right now there are really good businesses that don't have the word AI that are struggling to raise money, whereas there's other businesses that have a deck and pre seed and barely an idea and or raising money at fifty million dollars pre money valuations, I think is indicative of what's going on.
Yeah, we saw venture raise. It's been really difficult.
It's been very difficult unless you're a credentialed AI founder have a good idea in the AI space, because there's a lot of VC funds chasing chasing ideas, and I think some of them will work, but the unfortunate realities, I think a lot of them are going to get absolutely smoked because they can't all work, especially not at fifty million dollar pre So to answer your question directly, sure, there's capital out there, I wish.
There was more.
I wish there was more going to more ideas that were based just on meritocracy and their actual traction versus the notion that they have AI and it as bullish as I am on AI and investing in it personally, to be of abundantly clear.
But it's an interesting moment right now, very interesting.
I will only add that that is not too much different than what we've always seen. True, there's always been the bright shiny object, and the investors feel like they got to follow that.
Did you really start working for you in high school?
Such fantastic got to start on?
Yeah, got us talk about that off air, exactly right, Michael, thank you so much, having founder CEO of lobe dot nyc it Noah Friedman, CEO of uncharged.
Thank you gentlemen for being having a great conference today.
I hope you have a lot of great ideas circle about and a lot of great deals.
Thanks for having men.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bluemberg Business app. Listen on demand wherever you get your podcasts, or watch us live on.
YouTube Powermaster and I we are here at the Hope of Michael Southampton. It's starting to pick up the activity, the weather's getting better. Of interesting folks coming through, and we're fortunate to get a few of them to come spend a few minutes with us, including Bill Howrid's former CEO of PayPal, joining us here. Bill Serial entrepreneur. Is that something we can go with to kind of start
the conversation here with you? Well, if you count eight of them, yes, all right, that's where we're going.
What does a conference like this mean to you?
And what does it mean to some of the young folks who are coming with ideas and energy and maybe the looking for a little bit of a guidance.
Would you hope to get done here?
Well, you know, I think I can encourage. I don't think I can guide because you know, there aren't a lot of rules to this.
Every time is different, and you.
Know, I'll tell you the thing that I will tell people what makes it hard to do a startup?
People think about, well.
There's the risk, there's the career risk, there's the financial risk. But that's not really the thing. But you need to be comfortable in ambiguity because you come to work every day and you really don't know what's happening next. You don't have a play book and so you have to love the thrill of making it up as.
You go along.
Does it get any easier like the second, third, fourth, fifth time around?
It doesn't get any easier from the point of view of you know, sort of knowing a formula, but it does get easier because you're more used to the thrill.
What's the challenge here for a young entrepreneur in today's market, Well, first.
Of all, you know, having the being able to understand yourself. Self awareness, that's the most important thing. Everybody for instance, Silicon Valley or this arena, everybody thinks of themselves as a change agent. In fact, the vast majority of humans are not. The vast majority of humans want to know when they get up, what they go to do and how they do it. And that is as it should be,
because that's how society moves forward. But if you have enough self awareness to know what you like and know what you're capable of and this is it, then you know have the courage to go ahead.
How much easier is it?
When I think for Evergreen Money, your wealth advisor that you've got on the website, it says you built this for yourself. So when you kind of identify something that's needed in the marketplace, is it easier to do?
And oh, it's much easier. Yeah, Because you don't have data, you don't have research. You really have to go from your gut at the very beginning. Then of course, you get the data and you have to adopt to it, but it works so much easier if you have just an innate sense of what's required. As an example, the company that I tried just before this one which failed. One of the reasons it failed is that the audience was it was an attempt to give great credit to
people who are under banked who need it desperately. But one of the problems is I didn't understand.
That market is this Mint.
Well, Mint is not that Mint is a personal finance manager.
I did have a hand in that.
I've done about three and a half personal finance managers in my time. But this was a subprime lender. But we tried to do lendings two people who did not have good credit ratings. But rather than doing it at five hundred percent, we tried to do it at less than thirty six percent. It didn't work for a variety of reasons. But now I'm back in my MILU. I know about this stuff. Not only do I know about managing money, but also, and most importantly, I know about taxes.
I ran TurboTax for ten years now. I've been doing a whole lot of stuff. And the thing about it is if you are an investor. My view, you can't beat the market, but you can harness it, so you need to harness it. That's the pre tax but much more important than pre tax return is your after tax return, because that's all you can put in the bank.
All I'm going to say is it's unfortunate though, because here's someone who has done several companies. You understand this world, and the underbank need representation and they need platforms. So it's a shame that it is so tough. It is kind of get these things going.
Yes, yeah, when do you know as an entrepreneur or when do you admit failure when you know it's just.
Not you're to pull the plug.
Never early enough, okay, never early enough. First of all, I've been I've been more frequently wrong by being too early than too late.
And so when you're really early, you're the pioneer.
You've got the arrows in your back, and you're just trying to do too much, break too much ground all at once, and the market's usually not ready for you. But if the market is on an upswing just starting, that's the time to get in.
What do you find interesting about fintech there's just been so many iterations and I think if you layer on now what's going on with AI, how does that kind of continue to disrupt that space.
Well, the great thing about financial technology and it's like media, those are the two industries that can be completely digitized. There is nothing physical about it, and so that's the cool thing. You can do so much new stuff so quickly because there's nothing physical that you have to either build or transport.
AI.
We're really on the forefront of bringing AI into the financial space because what you need to do is do more than simply go to GPT. You need to build a financial knowledge base, and then you have to build a client portrait because if it is only GPT, all
you're getting is information. If I know about you and your finances, now I can combine the information and the understanding of the client and build a true advice engine tell people in their particular circumstances what their consideration should be.
So Paul Sweeney gets an agent or agentic AI that's just built for him essentially.
Well, yes, first, let me just say we don't do only AI. We have what I think is the ideal combination of human professional advisors and the AI resources, combine them together. But yes, we know everything we can about you and your finances, including not only what you own both internally and externally, but also all of the conversations you've had with us, and we put all that stuff together and then apply the advice.
Engine to that.
Nomah Friedman, CEO of Uncharted, was our guest earlier this morning.
He made a comment about AI.
Yeah, that if you don't have AI in your story, it's tough to raise capital today.
And maybe that's.
A concern of his crowding out some other ideas besides.
That, something that's absolutely true.
Okay, the money, the money always chases the fat, and I'm not saying AI is a fat.
It is not.
It is here to stay, and it's powerful. I mean, I've been long enough, I'm old enough that I've been in this business long enough to see a series of revolutions. You know, the PC, the Internet, the mobile, now AI.
It's real.
However, when these things come in, there is such a fury and so much focus on on the thing that yes, it crowds everything else out and that's a shame, but it's going to.
Make it better in your view in terms of like wealth management and.
Oh, wealth management. Absolutely.
Most of the big firms are looking at AI to reduce cost. They look at their contact center. I've got five thousand people, sorry, five hundred people. Can I get it to fifty? We have the benefit of not having that objective, and so we can use AI actually to make the service better.
Other than AI, yeah, other than AI. Dare you where should.
I be looking?
If I were a funder and a VC. Where else can I see some opportunities? Do you think when I come here?
Who do I want a corner?
Well?
You know, gosh in the financial services arena. What I would say is anybody who is taking on a big, established giant, because increasingly it's always been the case in technology, but increasingly the people that I want to compete with are big, have strong reputations, have customers, have assets, have the whole thing. The problem is that they've got an
installed base. And the good Lord created the world in seven days, he didn't have an installed base, yep, And so they can't move and that's the opportunity.
Ohk ahead are the big banks.
When Karen and I.
Talked to the big financial institutions and go visit them, all they talk about is the investments they are making in AI to better serve their customers. That's tough for guys like you who want to kind of dissin intermediate.
Well, it's not really, it's not really.
I mean, what they're doing in many of them are doing very good work. However, it's a very different environment paradigm people process the whole thing. Let's just before AI. Let's just talk about software. They have thousands, if not tens of thousands of software engineers.
Here India, all around the world.
I'm looking at, you know, twenty five and yet when I really focus, I can move a heck of a lot faster than they can.
What's kind of interesting about today's environment investment, environment innovation. I'm just curious someone who's seen a lot of cycles, right seeing things really change, some things didn't always pan out, But I'm just curious.
Well, I don't think you can predict the cycle, but you have to be ready for it. And that means always always have enough funding to get through whatever would come at you in the next eighteen month. And you know, the time that you're taking a real risk is if you let yourself get down to six month funding or something of that nature. Right now, all of a sudden the market goes against you and your toast.
Is it a tougher cycle? How do you describe though?
I mean right now, well, we have seen in what three or four months has just been crazy, But we've been through tough times COVID great financial crisis other times.
Oh yeah, Listen, the tech world goes through incredible roller coasters.
Up and down all the time.
They're usually sort of multi year cycles, but nevertheless they're very high, very low. I mean, I'm old enough to have lived through the Internet bubble where the Nasdaq, you know, was reduced by eighty percent and a decade to get back. It took a decade to get back, and so you have to be ready for that. So get yourself funded, don't overspend, and be ready for whatever comes at you.
How long should I go before I think I'm going to have success? Is there any kind of blueprint?
Is it a year? Two years, three years?
Well, once again, I'm not sure that I'm the guy to answer, because I tend to stick with it longer than.
I probably should.
Got you, but if you don't have a significant you've got a lot of pivots along the way.
You're going to take some dark alleys.
But if you don't have something that really feels right and starts to move upward within two years, it's time.
To rethink it.
Listen, I think we only got about thirty forty seconds left here, Bill, and I do always wonder about someone like yourself, Like.
You know, always asks like what are you reading?
Who are you watching?
But is there somebody out there that you like kind of look to for cues about kind of where the world is going, what's next, pecially when it relates to your world.
Well there's a lot of them, but I'll just mention one person who's stuck their head up again is Mary Meeker. Yeah, Mary Meeker. For years and years and years, she did the book The Bible on the Internet. Then she went off and became a VC and we didn't hear from her. All of a sudden she's picked back up and she's done the book.
On a really interesting I have to look out for that because that is a question to read.
Yeah, go for four hundred pages of solid information.
That's why she was the best on the street for a long time. Bill, thanks so much for journey. Us really appreciate it. Bill Harris's former CEO of PayPal, getting his thoughts on entrepreneurship.
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to Nooneystern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal