Broadcasting live to New York Bloomberg eleventh Rio to Washington, d C, Bloomberg to Boston, Bloomberg Well under Its to San Francisco, Bloomberg n to the Country series ETAM General one nineteen and around the globe the Bloomberg Radio plus Appen Bloomberg dot com. This is taking stock in a world of retail doom and gloom. Walmart suddenly shines like a bright star. Its share price up nine percent today, in fact, shares up the most and more than seven years.
First quarter results beat analysts estimates. PIM. We're going to find out what's driving Walmart and if it's particular to them, or if maybe the retail industry overall is doing better than other retailers would have indicated. Yes, well, we've got results from American Eagle Outfitters as well as Perry Ellis International, both shares rallying today after topping first quarter earnings estimates.
Right now, let's go to Charlie Pelligan the Bloomberg news room for a Burger business LA and I thank you him, thank you, Kathleen. Let us begin with retail, because a lot going on there today. You mentioned Walmart up nine percent, right, now, American Eagles surging eighteen point eight percent, Urban outfitters up thirteen and a half percent. Perry Ellis International it is
up now by fifteen point one percent. This solid day, when the rest of the market is declining, stocks have paired declines as anxiety eases over the potential for higher rates as soon as next month. Commodity producers erasing losses, consumer shares extending their advance. Rick Reader is global chief investment Officer for fixed income at black Rock, and on Bloomberg Television this morning, he told us July is a better bet than June for the next interest rate increase
from the Federal Reserve. You've got between now and June, you have really the big piece of data, and arguably the only piece of data of major significance as a papal report. So you gotta watch that. Part of why I think July is more logical. Get through Brexit, then you get CPI data, then you get core PIEC, you get a series of retail sales, and you a good number of data prints, which is where I think it makes sense to wait a respectful effact. There's no press
conference in July. They like to go into the press countings. I don't think they've said it before. Non press conference meetings are live. Church and Dwight denying that it is engaged in talks with potential acquires, robutting reports that had
sent the shares surging over the past couple of days. Today, Church and Dwight is up one point eight percent SMP down nine now a drop of five tenths of one percent to down down Night He wanted to decline also of five tenths of one percent, and has stack down seven tenths of one percent. Gold down eight ounces to drop of one and a half percent to thirty two on Wall Street. Now we'll look at other news from around the world on Bloomberg Radio. Charlie, thank you from
the Bloomberg news Room. I'm Mark Crumpton. Egypt Civil Aviation Ministry says life jackets and plastic items have been found in the sea off Greece, close to the suspected side of today's Egypt airplane crash. Uh Met A l is Vice President of Egypt Are we have found the wreckage. We confirmed that the wreckage has been found and the search and rescue teams are now. Uh it's turning into
a search and recovery. French President Francois Olan, speaking to the media in Paris through a translator, said his government is sending planes and ships to support the search efforts. We should express our sordidarity with trick to the families and also to find out the cause of the catastrophe. Flight eight oh four and Airbus A three twenty with sixties six people aboard, crashed into the Mediterranean early today
while in the route to Cairo from Paris. France's lower House of Parliament has approved the two month extension of the state of emergency that was declared after last falls deadly terror attacks in Paris. The measure is aimed at covering the European Championship soccer tournament and the Tour de France. Police have been given more powers to make arrests and
authorities than restrict movement of people or vehicles. One of two men who killed the New York City violinist insider Upstate summer home in has been sentenced to twenty five years to life in state prison. Forty year old Jonathan Conklin was sentenced yesterday in Chautuckwack County. In November, he pleaded guilty to a second degree murder charge in the
slaying of Mary Whittaker. Global News twenty four hours a day, powered by our two hundred journalists in more than one hundred fifty news bureaus around the world from the Bloomberg News Room by Mark Crumpton, Charlie and we thank you, and we are brought to you by Pershing's Inside twenty six conference, a must attend for advisers June seventh through the ninth in Orlando, Florida. Register at Inside dot com. That's I N S I T E SI dot com recapping Stock's lawer SMP down ten a drop of five
tenths of one percent. I'm Charlie Pellaton. That's a Bloomberg business flash. You're listening to taking Stock with Lee Mays and Pox on Bluebird Radio. Walmart beating analysts estimates Walmart getting good results from its grocery sales its neighborhood market stores. Is Walmart uh fighting its way back to being a big winner in the retail space, or is the struggle to boost its online sales ultimately going to stand in
its way. Scott Mushkin joins us now. He's senior retail and staples analysts at Wolf Research to weigh in not only on Walmart, but we hope also on urban outfitters and more. Thank you for joining us, Scott Hey, thanks for having me appreciate it. So, Walmart, what is what is the takeaway here? What's what are the key points that everyone should know about Walmart from this earnings report? I mean, I think they're they're they're too really. One is it's been a dreadful a couple of weeks in
retail land. Most companies have had significant earnings misses. Um. And so I think the idea that you have a company here that's doing okay, now, earnings were still down here over here, they were just you know, down less than people anticipated. So so I think that that's good. UM. And I also think there's this idea that maybe, um, maybe that the company is finding its footing. We have deep concerns on that and we don't think that's really the case if you kind of look through some of
the numbers. UM. But Greg Foreign, who's the U S head now, has been has been here for about a year. He's clearly doing a much better job running this company, and it's showing up. I mean, their in store conditions are better, the sales are a little stronger. UM. So I think right now Walmart is getting a lot of credit given the environment we're in. Hey, Scot, I'm wondering if you could give us a little detail, a little
color on your concerns. So when I think, if you you know kind of both medium term and long term. So as we look at at the back half of the year of him Walmart, like I said, Greg's done a good job here. He came in about a year ago and it's really got his hands around these operations. They had terrible in stock situation, uh not enough aduct on the shelf. UM. So he's he's done a good job fixing that. They've had to throw a lot of
store labor to get it fixed. Also took inventories down for store they were terribly overstocked, particularly in their back rooms. As we get to the third quarter of this year, they're going to start cycling through some of these benefits. And they benefited both sales and margins um and so you know, we worry as they get to the third quarter when they had dirty plus basis points at gross margin improvement. In the fourth color, they had sixty nine
basis points a gross margin improvement. Uh, and clearly some sales benefits that the cycling over some of these things is going to be pretty tough on the company. I think as we look longer term. Uh, it's the structure of the supercenter and it really goes to Amazon e commerce and just the changing preferences, shopping preferences and a lot of these everyday essentials that Walmart's known for. There's two challenges. Number one, they're not priced cheaper than anyone
else anymore. And number two, the propensity to buy those on line is rising rapidly because let's face it, going to the store, going to a supercenter to buy paper towel, that's a chore. And Amazon also got a demographic issue, right, I mean, because your customer base is aging out at the top and new customers are coming in it are quite ready to order everything using their phone. Yeah. We had a Huger port out called the Amazon generation, talking
about the millennials. Just what you're talking about, what you're speaking of, And yeah, they they want to buy online. They're used to it. That's what I called it, the Amazon generation. They don't want to spend their time going down to a supercenter. If Amazon is going to deliver it to their house. Um, and for busy household young households working a lot, Amazon's giving them their time back and that's incredibly valuable because they don't have to do
that chore. They can go see Johnny's baseball game on the weekend. So incredible challenges for the supercenter format as we move forward over you know, over the next couple of years, at some point does Amazon's business model catch up with it? Though that can't crush everybody before. It has to somehow make it make more money doing what
it basically does. I mean, they're starting to make make more money and um, so we're seeing that already and I think the and it's a little bit unknowable, but when you take some and I think this is a really important point I said it earlier. Is it when you take time and give it back to people As an old fashioned economics term, but utility, there's literally no utility. And going down to buy tied at a store, if someone's going to deliver that to you, um, they're giving
you something so valuable back. They're giving you back your time. And Amazon, we think, is honest way to becoming a horizontal monopoly I'm not sure anything can stop it because those trends are so powerful. You have an outperform rating on the shares of Amazon. I just want to get your quick thoughts if I can. On Home Depot and Lows. They reported results this week. I mean both companies tremendous report um. You know Home Deepo in particular, we think
it's gaining a lot of share. I think the question is, if we've slowed this economy down, can the housing market still outperformed. We think the answers yes, There's been a lot of under investment in the housing stock and the housing stock has aged a lot um. But I think that there's any concern around the sectors if we turn this economy down, do we you know, we see a pullback. We think Home Depot and Lows can continue to perform nicely given the consolidation in the industry and the dynamics
behind the housing market right now. Thank you very much for joining us. Scott Mushkin, He's managing director and a senior staples retail analyst for Wolf Research. Taking a look right now, it's the shares of Walmart. They are up more than five dollars a share. Walmart stock is up more than nine trade against sixty. You're listening to Taking Stock on Bloomberg Radio. Bloomber Taking Stock has brought to
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