November 13, 2025 • 15 mins
Watch Scarlet and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu
-Geetha Ranganathan, Bloomberg Intelligence Analyst on US Media, recaps earnings from Walt Disney. Walt Disney Co. reported sales that fell short of Wall Street estimates, with revenue for the fourth quarter at $22.5 billion. The company predicts challenges early in the new fiscal year, including expenses tied to the theatrical release of Zootopia 2 and Avatar: Fire and Ash, which will reduce earnings by $400 million.
-Woo Jin Ho, Bloomberg Intelligence Senior Technology Analyst, recaps Cisco earnings. Cisco Systems Inc. shares gained after the company boosted its 2026 forecast, showing progress in its effort to capture more artificial intelligence spending. The company now expects sales of as much as $61 billion in the fiscal year ending in July, and increased its earnings forecast, which topped analysts’ predictions.
-Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, discusses research on Adidas. According to Bloomberg Intelligence: Leading athleisure brands may return to sales growth in 2026, led by Adidas, amid product innovation and new assortments. Gross margin for the peers we examined may expand 24 bps, on average, consensus projects, led by gains at Nike, as tariff effects are mitigated and as cost-cutting and AI initiatives pay off, with just Lululemon expected to see Ebit margin contraction. Puma may see sales declines as a business reset aims to spur growth in 2027.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence podcast. Catch us live weekdays at ten am
Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Business App. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:23):
Let's move on here, because we're talking about how the
Downdustrials is outperforming the NASAK one hundred for a third
straight day, so that move to go beyond mag seven
is certainly taking place here at least recently. Although I
look within the Downdustrials, it is really am Jen and
Cisco leading the way, and the biggest drags on that
measure are Caterpillar and Disney. So let's talk a little
(00:46):
bit about Disney right now with our very own Githa Ranganathan.
She is our US media analyst for Bloomberg Intelligence, and Githa,
you took a look at Disney's fiscal fourth quarter results
and your verdict is good, not great.
Speaker 3 (00:59):
Yeah, that's exactly right, Scarlet. It came off as a
little bit of a lackluster report. I mean everything if
you look at the fundamental drivers of the company, which
is really the parks business brings in about sixty percent
of profits. Things seem to be going pretty strong there.
We saw a thirteen percent jump in operating profit for
the fiscal fourth quarter. Again, the guidance for you know,
(01:20):
twenty twenty six seems pretty good as well. But really,
you know, Disney really has this very very tough balancing act.
So on the one hand, they have the parks business,
they have the streaming business, which is doing really well
from a profitability standpoint, but to drag it down, you
have the linear TV networks, and then you have the
hit and miss nature of you know, the volleybo in
the Hollywood studio business. So you know, they have to
(01:41):
contend with all of those different moving parts, and I
think that the drag down from the TV networks and
the studios is kind of weighing a lot on the
narrative today, Keith I.
Speaker 4 (01:50):
Talk to us about some of their bundling of all
their streaming services, particularly that ESPN app, that really they
put a lot of the real valuable sports programming on
that ESPN app. How were the early results from in
terms of subscriber growth?
Speaker 3 (02:03):
So they didn't give us any hard number there, Paul,
in terms of the number of subscribers that they got
on the ESPN Ultimate product, which is priced at twenty
nine to ninety nine a month. But they did talk about,
you know, in general that the traction has been pretty good.
They talked about the whole bundling strategy because that is
where Disney really wins. I mean, if we've seen some
of the numbers, you know, from Disney, we know that
(02:25):
forty percent of new subscribers actually take the Disney bundle,
and this is really going to be the strategy for
them going forward. Right, you get people in with the bundle,
and that's how you kind of stem churn. You you're
able to take price increases. So it's really going to
be the main driver for earnings growth for them going forward.
And that's exactly what they indicated on the call as well.
Speaker 2 (02:47):
Paul, I can't remember who said this, but it's so
true that the history of media is about bundling and unbundling.
We went through this period where everyone cut the cord
and everyone unbundled, and now we're back to bundling again.
Although it's you know, in these discrete groups or Disney
might bundle Disney plus an ESPN plus together and then
if you are a T Mobile subscriber, you might get
some other options.
Speaker 4 (03:06):
And here, but here's my point, that's fine. Is the
consumer better off? And my answer is absolutely not.
Speaker 2 (03:11):
It's too confusing. It's way too confusing, Gita when it
comes to bundling. How much more can they do?
Speaker 3 (03:18):
Though?
Speaker 2 (03:18):
I mean, I see what you're saying about how it's
paying off right now, but I mean, can they continue
to innovate on their bundling or is have we reached
the limits of it?
Speaker 3 (03:27):
I don't think we've reached the limits at all, Scarlett.
So I think what they're ultimately, what they're ultimately aiming
for with their ESPN product, and you know, they just
introduced the streaming product a couple of months ago. I
think ultimately they wanted to kind of become the premier
sports destinations. So you know, ultimately, I wouldn't be surprised
if you see a Fox or an NBC or you know,
even maybe an Amazon kind of feeding in all of
(03:49):
their apps so that you go to this one stop
shop for you know, ESPN and you're able to see
all different kinds of sports content. Because you're absolutely right,
there's way too much of fragmentation becoming a great source
of friction for you know, the average consumer, and so
I think they're going to seek out a lot more
different bundling opportunities. We're already seeing them kind of do
something with ESPN Ultimate and Fox One, which is Fox's
(04:12):
streaming product that they also just introduced a few months ago.
So they're going to look to partner with different media
platforms across the ecosystem, and I think that is going
to be a source of, you know, a great upside
opportunity for them. Eventually.
Speaker 2 (04:25):
Is everyone willing to play ball on something like that, Kita,
or is there someone who's going to say, you know what,
you can't get me in here and I own or
I have the rights over X number of NFL games.
Speaker 3 (04:35):
Actually, that's what we're seeing right now. There is the
standoff going going on between Disney and YouTube TV, and
it's really all again, it's just a you know, game
of chicken here. So you know, when it comes to
sports content, I have to say Disney has the upper
hand a little bit. So if you just kind of
look at sports viewing in the United States, Disney has
(04:56):
about forty percent of sports viewing just with you know,
marquee rights tied to all major leagues, you know, college football, NFL, NBA, MLB,
they have it all, so I think it becomes a
little harder to say no to them. But again, never say.
Speaker 4 (05:10):
Never, all Right, Keith, I'm reluctant to ask this question,
but I feel like I have to. What's the latest
on Bob Iger's succession plan.
Speaker 3 (05:18):
Yeah, this is the big thing that we're all looking
at in fiscal twenty twenty six. So James Gorman, who's
kind of heading up this whole succession planning committee Paul
has said that, you know, the board will be out
with the decision by the end of March. So Bob
Eiger's contract comes to an end by the end of
twenty twenty six, so hopefully we do have some kind
(05:40):
of clarity on that. Right now, it's really looking like
it's going to be internal candidates. I mean, there was
some you know, rumors and buzz about whether they were
looking externally, but I think they're going to kind of
keep it internal.
Speaker 4 (05:50):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (05:57):
You're listening to the Bloomberg Intelligence podcast. Catch us Live
weekdays at ten am Eastern on Apple Coarclay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:12):
Let's talk about some of the big movers in the
market today, and one is an old school name that
we've been talking a lot about, and that's Cisco coming
out with results that show that it's definitely a part
of this AI conversation. Wujin Hoe is the Bloomberg Intelligence
Senior Technology analyst. He covers Cisco and wojin. You are
looking at this beat and raise quarter for Cisco and
thinking that the outlook is maybe even a little conservative,
(06:35):
and Cisco can do better than what it's promised.
Speaker 5 (06:38):
Yeah, hey, Scarlett, thanks for having me on. I'll tell
you they did raise their outlook off of the first
quarter beat and the second quarter guide. But when I
look at the second half of the year, you know
there were one hundred million dollars below consensus expectations. So
give them the strong momentum that they've already had in
the first half of the year. I don't see why
(06:59):
it can't go any better.
Speaker 4 (07:01):
All right. The stock's hitting at fifty two weeks high today,
and I put up my GP chart which grafts that
I go all the way back to March of two thousand,
I think they've just set a new all time high
that was set back in March thirty one of two thousand.
So after twenty five years, based on a long round trip,
they've gotten that market cap back. So good for them
(07:23):
and their patient shareholders. So WOCH talk to us about
the competitive landscape for somebody like Cisco here, how has
that changed and how are they stacked up?
Speaker 5 (07:33):
Yeah, so we got to look at it two or
three different buckets. Right on the core networking side, there's
still the eight hundred pound gorilla there and that's actually
been doing a lot better than I had anticipated. And
they have this tremendous upgrade cycle that they're going to
have grow off of for the next couple of years.
(07:55):
And you know, given that they have the largest networking
base out there, there's a lot to upgrade. It's going
to be supplemental growth. Now. The AI is actually the
cherry on top of this, right, they're relatively a newer
player to AI. They've they've been more known to the
enterprise base and that's been growing quite nicely. One billion
(08:17):
dollars in revenue and fiscal twenty five. They said on
the call yesterday they're going to be They're on pace
for three billion dollars in revenue one point three billion
dollars in order in this quarter alone, and they have
the products to win. So who do they come up
against on the AI front? Arista on their networking side,
Broadcom on the chip side, and Video on the on
(08:37):
the switching side. So they are coming up against some
heavy hitters. And Cisco has the balance sheet, importantly, the
balance sheet to help support their growth.
Speaker 2 (08:48):
In terms of M and A, is there Are you
looking for them to do anything? I was just checking in.
It seems like they did buy a softwaremakers Plunk in
twenty twenty four to diversify in to security product. Is
now a good time for them to kind of build
out their empire a little bit more?
Speaker 5 (09:04):
Yeah, and and this is one of the things that
I'm waiting for right this splunk eear. The Splunk M
and A was more of their Hey, let's let's switch
over to a recurring revenue software uh uh, software based era. Right.
I think the phase three of M and A is
going to be more on the AI side. Now, I
(09:24):
will tell you M and A the acquisitions that I
made about a decade ago is actually started to come
into fruition here to help some of their infrastructure. But
you know some some of the interesting things that they've
invested in over the past I would say a year
two or two, they've been investing in some AI infrastructure
(09:46):
guys uh and and such as a cohere uh and,
and I believe they have a little piece of core
Weave as well. So I'm curious where they go with
that going forward. But it's going to be they're gonna
start leaning into the AI side, is my guest, but
it's going to be a small and unlikely large.
Speaker 4 (10:05):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (10:13):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am. He's done on Apple, Cocklay and
Android Auto with the Bloomberg Business app. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 2 (10:27):
All right, let's talk a little bit about the retail
sector and f leisure, because that was a big thing
a couple of years ago, but it seems like it's
had its moment, and you just look at Lululemon shares
and how they've done, and that kind of tells you
what's happened to the leisure trend. Lulu Lemon shares down
by fifty five percent in twenty twenty five. Punam Goyel
(10:48):
is senior US e Commerce and retail analysts here at
Bloomberg Intelligence, and she is here with more and Putam
you recently authored a report about how Adidas may lead
ath leisure in twenty twenty six. But how big is
that at leisure market?
Speaker 5 (11:02):
Right now?
Speaker 6 (11:02):
The at leisure market is still big and growing. So
when you think about who dominates it, it's still Nike
right at over forty billion dollars in sales annually. Adidas
is the second, and when you think of a Little Lemon,
it's far behind. It's still you know, expected to be
at twelve billion dollars in the next two a specialist
it is exactly. But in terms of the market, when
(11:23):
you think about at leisure and you think about the
broader apparel market, at leisure is still growing faster than
the broader apparel. What are the growth rates the growth
rates on If you look at Nike, Nike is clearly
under a turnaround, But if you look at the average
growth rate, you're looking at the single digits. It's in
the high single digits to mid single digits. And if
you think about it, next year, we're looking at low
(11:43):
single digit growth rates for the whole year. But that's
because there is turmoil between the names, right. There are
some names that are losing share, especially the smaller names,
like when you think of All Birds, right, all Birds
has gone through a whole transformation or is trying to,
and it's really not with its shoppers like you planted.
When you think of Little Lemon, the issue isn't the brand.
(12:05):
The issue is the product. It's the product that isn't
resonating as well as it did because there isn't just
much of a difference between what we already see out
there and then Nike, I think, is doing a phenomenal
job right now to turn around its business, so we
do expect it to gain traction in the second half
of next year.
Speaker 4 (12:23):
Is I think I haven't seen even forever Punham. He's
actually see her every day now. It's been forever. Puns
actually literally one of our first annamals we hired back
in the beginning of.
Speaker 2 (12:33):
BI pretty incredible. I love I love it coming together.
Speaker 4 (12:37):
Putum is at leisure a global marketplace because when I
went over to Italy a few months ago, my friend
who lives in Rome says, do not bring any of
the ath leisure stuff. We don't do that here in Italy.
We trust like adults. Is it talked about the global trends.
Speaker 6 (12:51):
It is a global trend and now, yes, Europe is
probably more on the dressier end of it, absolutely, but
I think it's a growing trend in Asia, which is
a very important market for at leisure. China especially still
very important while trends have been mixed there for the
last few years. We do think that as people begin
(13:12):
to explore the outdoors, begin to explore fitness and health
and wellness in a more meaningful way, that market is
growing in that region and it is very important to growth.
Speaker 2 (13:23):
Where does a company like under Armour fit in here?
Speaker 6 (13:26):
So under Armour is one of those companies that have
kind of went back and forth with this might be.
I've seen them trying to turn around their business several
times in the last twenty years. So Kevin Plank is
back in the seat. They're focusing on the right things.
When you look at their playbook, they're focusing on product
they're focusing on reducing wholesale penetration and off price where
(13:48):
you really dilute the brand, and they're focusing on bringing
marketing and endorsers as athletes back in a more meaningful way.
Sounds great, but I said, we've heard it before. We've
heard it before, So I think execution is really key here,
and then just sticking to it right because it's very
easy to fall off the product cycle and for retail,
(14:09):
irrespective of everything that we talk about, product is still king.
You have to have the right product, you have to
have the right customer connection, and under Armar is trying
to build that. I'd say that in the early signs
of it, they're doing what they need to do. It's working,
but I'm not sold yet. I need to see it
play out and stay. It needs to be sustained. I
(14:30):
think that's the key here.
Speaker 5 (14:31):
Che.
Speaker 4 (14:31):
I think that business is just so competitive. I mean,
there's so many good brands there, and I mean you
almost forget about a Puma, you know, who's been around.
Speaker 6 (14:39):
Forever and they're struggling.
Speaker 1 (14:42):
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Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence podcast. Catch us live weekdays at ten am
Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Business App. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:23):
Let's move on here, because we're talking about how the
Downdustrials is outperforming the NASAK one hundred for a third
straight day, so that move to go beyond mag seven
is certainly taking place here at least recently. Although I
look within the Downdustrials, it is really am Jen and
Cisco leading the way, and the biggest drags on that
measure are Caterpillar and Disney. So let's talk a little
(00:46):
bit about Disney right now with our very own Githa Ranganathan.
She is our US media analyst for Bloomberg Intelligence, and Githa,
you took a look at Disney's fiscal fourth quarter results
and your verdict is good, not great.
Speaker 3 (00:59):
Yeah, that's exactly right, Scarlet. It came off as a
little bit of a lackluster report. I mean everything if
you look at the fundamental drivers of the company, which
is really the parks business brings in about sixty percent
of profits. Things seem to be going pretty strong there.
We saw a thirteen percent jump in operating profit for
the fiscal fourth quarter. Again, the guidance for you know,
(01:20):
twenty twenty six seems pretty good as well. But really,
you know, Disney really has this very very tough balancing act.
So on the one hand, they have the parks business,
they have the streaming business, which is doing really well
from a profitability standpoint, but to drag it down, you
have the linear TV networks, and then you have the
hit and miss nature of you know, the volleybo in
the Hollywood studio business. So you know, they have to
(01:41):
contend with all of those different moving parts, and I
think that the drag down from the TV networks and
the studios is kind of weighing a lot on the
narrative today, Keith I.
Speaker 4 (01:50):
Talk to us about some of their bundling of all
their streaming services, particularly that ESPN app, that really they
put a lot of the real valuable sports programming on
that ESPN app. How were the early results from in
terms of subscriber growth?
Speaker 3 (02:03):
So they didn't give us any hard number there, Paul,
in terms of the number of subscribers that they got
on the ESPN Ultimate product, which is priced at twenty
nine to ninety nine a month. But they did talk about,
you know, in general that the traction has been pretty good.
They talked about the whole bundling strategy because that is
where Disney really wins. I mean, if we've seen some
of the numbers, you know, from Disney, we know that
(02:25):
forty percent of new subscribers actually take the Disney bundle,
and this is really going to be the strategy for
them going forward. Right, you get people in with the bundle,
and that's how you kind of stem churn. You you're
able to take price increases. So it's really going to
be the main driver for earnings growth for them going forward.
And that's exactly what they indicated on the call as well.
Speaker 2 (02:47):
Paul, I can't remember who said this, but it's so
true that the history of media is about bundling and unbundling.
We went through this period where everyone cut the cord
and everyone unbundled, and now we're back to bundling again.
Although it's you know, in these discrete groups or Disney
might bundle Disney plus an ESPN plus together and then
if you are a T Mobile subscriber, you might get
some other options.
Speaker 4 (03:06):
And here, but here's my point, that's fine. Is the
consumer better off? And my answer is absolutely not.
Speaker 2 (03:11):
It's too confusing. It's way too confusing, Gita when it
comes to bundling. How much more can they do?
Speaker 3 (03:18):
Though?
Speaker 2 (03:18):
I mean, I see what you're saying about how it's
paying off right now, but I mean, can they continue
to innovate on their bundling or is have we reached
the limits of it?
Speaker 3 (03:27):
I don't think we've reached the limits at all, Scarlett.
So I think what they're ultimately, what they're ultimately aiming
for with their ESPN product, and you know, they just
introduced the streaming product a couple of months ago. I
think ultimately they wanted to kind of become the premier
sports destinations. So you know, ultimately, I wouldn't be surprised
if you see a Fox or an NBC or you know,
even maybe an Amazon kind of feeding in all of
(03:49):
their apps so that you go to this one stop
shop for you know, ESPN and you're able to see
all different kinds of sports content. Because you're absolutely right,
there's way too much of fragmentation becoming a great source
of friction for you know, the average consumer, and so
I think they're going to seek out a lot more
different bundling opportunities. We're already seeing them kind of do
something with ESPN Ultimate and Fox One, which is Fox's
(04:12):
streaming product that they also just introduced a few months ago.
So they're going to look to partner with different media
platforms across the ecosystem, and I think that is going
to be a source of, you know, a great upside
opportunity for them. Eventually.
Speaker 2 (04:25):
Is everyone willing to play ball on something like that, Kita,
or is there someone who's going to say, you know what,
you can't get me in here and I own or
I have the rights over X number of NFL games.
Speaker 3 (04:35):
Actually, that's what we're seeing right now. There is the
standoff going going on between Disney and YouTube TV, and
it's really all again, it's just a you know, game
of chicken here. So you know, when it comes to
sports content, I have to say Disney has the upper
hand a little bit. So if you just kind of
look at sports viewing in the United States, Disney has
(04:56):
about forty percent of sports viewing just with you know,
marquee rights tied to all major leagues, you know, college football, NFL, NBA, MLB,
they have it all, so I think it becomes a
little harder to say no to them. But again, never say.
Speaker 4 (05:10):
Never, all Right, Keith, I'm reluctant to ask this question,
but I feel like I have to. What's the latest
on Bob Iger's succession plan.
Speaker 3 (05:18):
Yeah, this is the big thing that we're all looking
at in fiscal twenty twenty six. So James Gorman, who's
kind of heading up this whole succession planning committee Paul
has said that, you know, the board will be out
with the decision by the end of March. So Bob
Eiger's contract comes to an end by the end of
twenty twenty six, so hopefully we do have some kind
(05:40):
of clarity on that. Right now, it's really looking like
it's going to be internal candidates. I mean, there was
some you know, rumors and buzz about whether they were
looking externally, but I think they're going to kind of
keep it internal.
Speaker 4 (05:50):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (05:57):
You're listening to the Bloomberg Intelligence podcast. Catch us Live
weekdays at ten am Eastern on Apple Coarclay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:12):
Let's talk about some of the big movers in the
market today, and one is an old school name that
we've been talking a lot about, and that's Cisco coming
out with results that show that it's definitely a part
of this AI conversation. Wujin Hoe is the Bloomberg Intelligence
Senior Technology analyst. He covers Cisco and wojin. You are
looking at this beat and raise quarter for Cisco and
thinking that the outlook is maybe even a little conservative,
(06:35):
and Cisco can do better than what it's promised.
Speaker 5 (06:38):
Yeah, hey, Scarlett, thanks for having me on. I'll tell
you they did raise their outlook off of the first
quarter beat and the second quarter guide. But when I
look at the second half of the year, you know
there were one hundred million dollars below consensus expectations. So
give them the strong momentum that they've already had in
the first half of the year. I don't see why
(06:59):
it can't go any better.
Speaker 4 (07:01):
All right. The stock's hitting at fifty two weeks high today,
and I put up my GP chart which grafts that
I go all the way back to March of two thousand,
I think they've just set a new all time high
that was set back in March thirty one of two thousand.
So after twenty five years, based on a long round trip,
they've gotten that market cap back. So good for them
(07:23):
and their patient shareholders. So WOCH talk to us about
the competitive landscape for somebody like Cisco here, how has
that changed and how are they stacked up?
Speaker 5 (07:33):
Yeah, so we got to look at it two or
three different buckets. Right on the core networking side, there's
still the eight hundred pound gorilla there and that's actually
been doing a lot better than I had anticipated. And
they have this tremendous upgrade cycle that they're going to
have grow off of for the next couple of years.
(07:55):
And you know, given that they have the largest networking
base out there, there's a lot to upgrade. It's going
to be supplemental growth. Now. The AI is actually the
cherry on top of this, right, they're relatively a newer
player to AI. They've they've been more known to the
enterprise base and that's been growing quite nicely. One billion
(08:17):
dollars in revenue and fiscal twenty five. They said on
the call yesterday they're going to be They're on pace
for three billion dollars in revenue one point three billion
dollars in order in this quarter alone, and they have
the products to win. So who do they come up
against on the AI front? Arista on their networking side,
Broadcom on the chip side, and Video on the on
(08:37):
the switching side. So they are coming up against some
heavy hitters. And Cisco has the balance sheet, importantly, the
balance sheet to help support their growth.
Speaker 2 (08:48):
In terms of M and A, is there Are you
looking for them to do anything? I was just checking in.
It seems like they did buy a softwaremakers Plunk in
twenty twenty four to diversify in to security product. Is
now a good time for them to kind of build
out their empire a little bit more?
Speaker 5 (09:04):
Yeah, and and this is one of the things that
I'm waiting for right this splunk eear. The Splunk M
and A was more of their Hey, let's let's switch
over to a recurring revenue software uh uh, software based era. Right.
I think the phase three of M and A is
going to be more on the AI side. Now, I
(09:24):
will tell you M and A the acquisitions that I
made about a decade ago is actually started to come
into fruition here to help some of their infrastructure. But
you know some some of the interesting things that they've
invested in over the past I would say a year
two or two, they've been investing in some AI infrastructure
(09:46):
guys uh and and such as a cohere uh and,
and I believe they have a little piece of core
Weave as well. So I'm curious where they go with
that going forward. But it's going to be they're gonna
start leaning into the AI side, is my guest, but
it's going to be a small and unlikely large.
Speaker 4 (10:05):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (10:13):
You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 2 (10:27):
All right, let's talk a little bit about the retail
sector and f leisure, because that was a big thing
a couple of years ago, but it seems like it's
had its moment, and you just look at Lululemon shares
and how they've done, and that kind of tells you
what's happened to the leisure trend. Lulu Lemon shares down
by fifty five percent in twenty twenty five. Punam Goyel
(10:48):
is senior US e Commerce and retail analysts here at
Bloomberg Intelligence, and she is here with more and Putam
you recently authored a report about how Adidas may lead
ath leisure in twenty twenty six. But how big is
that at leisure market?
Speaker 5 (11:02):
Right now?
Speaker 6 (11:02):
The at leisure market is still big and growing. So
when you think about who dominates it, it's still Nike
right at over forty billion dollars in sales annually. Adidas
is the second, and when you think of a Little Lemon,
it's far behind. It's still you know, expected to be
at twelve billion dollars in the next two a specialist
it is exactly. But in terms of the market, when
(11:23):
you think about at leisure and you think about the
broader apparel market, at leisure is still growing faster than
the broader apparel. What are the growth rates the growth
rates on If you look at Nike, Nike is clearly
under a turnaround, But if you look at the average
growth rate, you're looking at the single digits. It's in
the high single digits to mid single digits. And if
you think about it, next year, we're looking at low
(11:43):
single digit growth rates for the whole year. But that's
because there is turmoil between the names, right. There are
some names that are losing share, especially the smaller names,
like when you think of All Birds, right, all Birds
has gone through a whole transformation or is trying to,
and it's really not with its shoppers like you planted.
When you think of Little Lemon, the issue isn't the brand.
(12:05):
The issue is the product. It's the product that isn't
resonating as well as it did because there isn't just
much of a difference between what we already see out
there and then Nike, I think, is doing a phenomenal
job right now to turn around its business, so we
do expect it to gain traction in the second half
of next year.
Speaker 4 (12:23):
Is I think I haven't seen even forever Punham. He's
actually see her every day now. It's been forever. Puns
actually literally one of our first annamals we hired back
in the beginning of.
Speaker 2 (12:33):
BI pretty incredible. I love I love it coming together.
Speaker 4 (12:37):
Putum is at leisure a global marketplace because when I
went over to Italy a few months ago, my friend
who lives in Rome says, do not bring any of
the ath leisure stuff. We don't do that here in Italy.
We trust like adults. Is it talked about the global trends.
Speaker 6 (12:51):
It is a global trend and now, yes, Europe is
probably more on the dressier end of it, absolutely, but
I think it's a growing trend in Asia, which is
a very important market for at leisure. China especially still
very important while trends have been mixed there for the
last few years. We do think that as people begin
(13:12):
to explore the outdoors, begin to explore fitness and health
and wellness in a more meaningful way, that market is
growing in that region and it is very important to growth.
Speaker 2 (13:23):
Where does a company like under Armour fit in here?
Speaker 6 (13:26):
So under Armour is one of those companies that have
kind of went back and forth with this might be.
I've seen them trying to turn around their business several
times in the last twenty years. So Kevin Plank is
back in the seat. They're focusing on the right things.
When you look at their playbook, they're focusing on product
they're focusing on reducing wholesale penetration and off price where
(13:48):
you really dilute the brand, and they're focusing on bringing
marketing and endorsers as athletes back in a more meaningful way.
Sounds great, but I said, we've heard it before. We've
heard it before, So I think execution is really key here,
and then just sticking to it right because it's very
easy to fall off the product cycle and for retail,
(14:09):
irrespective of everything that we talk about, product is still king.
You have to have the right product, you have to
have the right customer connection, and under Armar is trying
to build that. I'd say that in the early signs
of it, they're doing what they need to do. It's working,
but I'm not sold yet. I need to see it
play out and stay. It needs to be sustained. I
(14:30):
think that's the key here.
Speaker 5 (14:31):
Che.
Speaker 4 (14:31):
I think that business is just so competitive. I mean,
there's so many good brands there, and I mean you
almost forget about a Puma, you know, who's been around.
Speaker 6 (14:39):
Forever and they're struggling.
Speaker 1 (14:42):
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