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- [00:01]
IBM Representative
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter Business.
- [00:29]
Paul Sweeney
IBM Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto, and they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific, like biotech companies with high R and D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member Finra SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures being a small
- [01:43]
Chase for Business Announcer
business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools, plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co. Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [02:42]
Paul Sweeney
We'll stay on the technology theme. Here we're going to check in with Mandeep Singh, global tech research head at Bloomberg Intelligence. Mandy, lots of news to talk about. I wanted to start with CrowdStrike sales outlook kind of in line with expectations. Stock off a little bit here. Just refresh our memory. What is CrowdStrike and how does it fit into the tech stack?
- [03:03]
Mandeep Singh
Yeah, I mean they are one of the pure play cybersecurity names and clearly they have done quite well in terms of their top line growth over the last two, three years. And you know, like with everything in the SAS complex, some of these names have come under pressure because of potential competition from LLM companies like Anthropic. And I think that's where you see a muted reaction today. But you know, they had their best new ARR growth yesterday and the guidance was a little conservative. But that's what we are seeing from all the software companies that have reported results this quarter is they want to beat and raise for the next one. And I think for a company like CrowdStrike that's growing mid 20% and very high retention rate, I mean things are looking good because all these should potentially drive more demand for cybersecurity. There's one area that certainly is poised to benefit from LLM usage. It should be cybersecurity.
- [04:17]
Paul Sweeney (Interviewer)
Mandeep, CrowdStrike has been, as you mentioned, one of the biggest beneficiaries of cybersecurity spending. Boom. After this earnings report, does it still look like there is still strong secular demand or are we starting to see signs that those budgets are becoming a little bit more selective?
- [04:34]
Mandeep Singh
Not in the cybersecurity complex. So if anything, you know, if you have more data now, which is the case with LLMs now, you know, you are generating a lot more data, you are using it for training and so all that needs to be secured and prompt injection attacks is a new type of attack that you have to secure again. So from my perspective, you know, and based on our conversations like this is the last thing any enterprise would want to cut. Yes, they are shifting budgets, you know, allocating to AI more compared to the traditional areas. But when it comes to cybersecurity, I mean the risks continue to get bigger and bigger in terms of data loss or, you know, getting hacked. And so from that perspective, you're unlikely to cut back on, you know, especially a primary cybersecurity product, which, I mean in a lot of cases there are point products but CrowdStrike is more of a platform with multiple sort of threat vectors that they protect against. So from that perspective also they are quite insulated.
- [05:45]
Paul Sweeney
All right, folks, this is how it works at Bloomberg. Usually Mandeep, he comes into our studio when we want to talk to him. He's not in our studio today. Which got me thinking, where is Mandeep Singh today? And at Bloomberg we can tell where everybody is at all times. You have to put where you are and who you're meeting with. It's kind of the full disclosure thing they do at Bloomberg. So I know where he is. He's downtown at the Bloomberg Invest conference. Anytime Bloomberg, its clients together, they all just want to talk to Mandeep. They want to hear Mandeep talk about what's going on in tech and most notably AI. So I'm going to go right there. Mandy, what's the conversation today about AI? It went from just build, build, build, build. Now people are starting to think about what are some of the ripple effects, third and second and third quarter effects here. What's the investor view of AI these days?
- [06:32]
Mandeep Singh
Yeah, I mean, at this conference over the last couple of days, the focus has been on the private markets. And as you know, you know, private equity owns a lot of these software, traditional software companies that generate very high free cash flow. But everyone is looking at, you know, what are these other lamps going to disrupt and what does that mean, you know, to the free cash flow of some of these companies? And so the private markets have been a big focus, I would say over
- [06:59]
Paul Sweeney (Interviewer)
the last two days, Mandeep, there's been this trade, the halo trade, focusing on tangible assets when it comes to deciphering, you know, who the winners and losers are going to be. I spoke recently to ubs, a global wealth cio, and she said that she's focusing on the builders and not the coders. How are you thinking about this dynamic between the companies with tangible assets versus intellectual property?
- [07:25]
Mandeep Singh
Yeah, I mean look at all the hyperscalers, right? They used to have, most of them used to have an asset light business model. Now we are talking about, you know, $700 billion in aggregate CAPEX for this year just from the hyperscalers. And this is likely a multi year cycle. So from that perspective, I mean, we know AI is compute intensive and need a lot more, you know, infrastructure to do AI. And so from that perspective, things certainly are shifting, you know, from intellectual property to owning infrastructure. And that's the trend that is likely to continue.
- [08:04]
Paul Sweeney
Stay with us. More from Bloomberg Intelligence coming up after this.
- [08:10]
IBM Representative
So there's a lot of noise about AI, but time's too tight for more promises. So let's Talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter Business IBM Support for
- [08:40]
Paul Sweeney
the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures being a small
- [09:53]
Chase for Business Announcer
business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now, and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more@chase.com business chase for business Make More of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply. JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Company. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [11:07]
Paul Sweeney
AI story Just yet another angle is how AI is being deployed by the Department of Defense and other parts of the US Government, particularly about the Defense Department. We had anthropic clashing with the Pentagon about how their AI could be used. Then we had OpenAI Chief Executive Officer Sam Altman says we'll come in and we'll do some of the work for you. And there's a lot of uncertainty about how AI is going to be used and who will actually provide it for various government entities, including most notably the Department of Defense. Vlad Richter joins us here. He's the CEO of the cybersecurity company Fencer. Vlad, how do you think this is playing out? AI, the Department of Defense specifically? We've had some uncertainty here. What do you make of it?
- [11:52]
Vlad Richter
Yeah, look, I think there's clearly some sort of misunderstanding internally between, between the departments, the Pentagon and Anthropic, seemingly because from what we're reading over the weekend, OpenAI signed an agreement, according to Sam Albin with the Pentagon, that kind of stated the outlines that I think we as citizens would very much care about, which is we don't want to see mass surveillance and we definitely don't can't even imagine a situation where there would be autonomous weapons going through there. But I think this also speaks to part of the challenge within these AI companies, specifically the models, is that a lot of the data that they're trained on is effectively the same. And so over time, the work that they're doing becomes kind of commoditized and there's much of a moat. And so the government will inevitably, in my opinion, turn around and start to work with the vendors that will play ball with them and not try to strong arm them in any single position.
- [12:46]
Paul Sweeney (Interviewer)
Opportunistic and sloppy. Was the language that Sam Altman used. Pretty strong language there. What does that tell us about the rush by AI labs to secure government contracts? And how important of a customer is the Pentagon when it comes to the AI industry?
- [13:02]
Vlad Richter
Yeah, great question. So I think from a perspective of how important the Pentagon is or the government specifically to these companies as a customer, it's actually not that much. I mean, if you look at it from the perspective of anthropic, you know, it was reported that the deal with the Pentagon was around $200 million a year. And I think as reported by Bloomberg today, anthropic went from 14 billion in run rate a few weeks ago to nearly $19 billion today. It's 1% of their revenue. Right. And I think for the same, probably similar to OpenAI and some of these other ones, that, that it's meaningful revenue, but as a percentage of the overall base, it's not significant. And instead what you end up, what we need as citizens is that the government actually chooses and it's more important for them. I think in the case of OpenAI, with the contract they just signed, it was a little bit too fast, like Sam said, and the communication was not great. I mean, there was a handful of departures, including some relatively Senior people from OpenAI after the weekend that decided to go to Anthropic. And I'm not sure how much people know about this historically, but the Anthropic founding team was actually all ex, for the most part, all ex OpenAI employees that disagreed back in 2021 with some of the direction that OpenAI was heading to and decided to leave and start Anthropopic themselves. And I think today there are roughly 70 to 80 employees at Anthropopic that are ex OpenAI. But at OpenAI, I think there are only about 10 or 12 employees that are ex Anthropic. So you can see kind of where the movement's been going between the sort of the intelligent folks there.
- [14:32]
Paul Sweeney
Do you have any idea to what extent in the Pentagon and the Department of Defense that AI is being utilized? Are they cutting edge because they have the resources, or are they kind of an old government, you know, plotting institution? How are they employing AI?
- [14:48]
Vlad Richter
There's a great article, and I think it was actually from you guys earlier this morning that popped out that kind of described a little bit of that was revealed by some source of how it was being used. And the understanding of what was reported was that the Pentagon had decided that there were going to be roughly 1,000 places that they were going to hit initially, 1,000 sites that they were going to hit initially inside of Iran. In previous versions of this, you can't hit all thousand at once. And so people would sit down, they would prioritize them based on a handful of different factors. And it would probably take a couple weeks to get this done, if not longer. Right. In this case, what was understood was that they were using Palantir's Maven product, which underneath the hood was also being powered by Claude from Anthropic, and they basically fed in a bunch of data that Palantir has access to from the government and said, okay, prioritize this for us based on what we need to do in the different sort of movements. Right. Step one, step two, step three, whatever it may be. I think at that point, just like if any of us were using AI to prioritize some of the things for us, it pulled out a spreadsheet and said, listen, this is, I'm paraphrasing here, assuming this is what you should be doing. And I imagine the powers that be sat down, took a look at and said, is this really what we want to be doing? Do we want to hit these first hunter or not? But at a minimum, you're getting that done in 45 minutes. Right? This is not a multi week endeavor. It just kind of gets you a little bit faster there. It might only be 90% correct, but humans will decide the rest of it from there.
- [16:13]
Paul Sweeney (Interviewer)
Vlad, we've seen AI leaders call for stricter regulation while simultaneously pursuing a defense, defense contracts. Is there a sense that these deals are happening faster than the industry can establish the right ethical guardrails?
- [16:29]
Vlad Richter
Yeah. So I, you know, depends on the day. You sometimes can go back and forth. What I think, what I would tell you is that it's not even sometimes so much as the guardrails from the industry, but the guardrails from the government. Right. There are some significant points that I agree very much with Dario, the CEO at Anthropic on this, which is the government does need to provide some guardrails for us on what is appropriate, what is not appropriate, how do we protect U.S. citizens? At what point in time does the Pentagon decide to overstep some of these boundaries and if they're allowed to. But I think these things are moving too quickly at this point. Right? I mean, these models come out every, you know, a new version of a model comes out every few months from one of these organizations and it beats the previous one by 10, 15, 20, 30%. And all of a sudden it unlocks things that we didn't think was possible. And you hear these comments that I think Dario said this earlier this week where he said that he believes that there's going to be exponential growth later this year for a company like ours. We went from 5% of our code being written by AI a year ago to north of 60% today. You start to struggle to imagine what exponential looks like by the end of the year. I think it's just tough to keep up with these things.
- [17:46]
Paul Sweeney
Stay with us. More from Bloomberg Intelligence coming up after this.
- [17:51]
IBM Representative
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, it's and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [18:20]
Paul Sweeney
IBM support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public you can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services By Public Advisors SEC Registered Advisor Crypto Services By ZeroHash all investing involves risk of loss. See completedisclosures@public.com Disclosures Small businesses are the
- [19:21]
Chase for Business Announcer
pulse of every community. They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level that makes it possible for you to connect, learn from each other and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more@chase.com business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am EAS, Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube
- [20:37]
Paul Sweeney
Paramount Skydance acquisition of Warner Brothers Discovery will trigger a media re ranking and strategic sector reset. Our guest says we expect the industry to consolidate around three dominant players, Disney, Paramount, Netflix, leaving Comcast subscale and making further M and a likely Geetha Ranganathan. She is the media Alice for Bloomberg Intelligence. Brian Roberts and the gang down there in Philadelphia probably not going to be happy to read this. Geetha, what do you think Comcast will do in this new world of Paramount and Warner Brothers?
- [21:08]
Geetha Ranganathan
They absolutely need to do something, Paul. I mean, that has been the whole thinking. We know that they are ready to do something because last year when we had this whole Warner Brothers Discovery auction kicked off, we know that Comcast had actually kicked the tires there. They had a proposed merger of NBCUniversal, which is their media division, along with Warner Brothers Discovery. But of course, because it was a major restock deal as opposed to a cash deal, it was, you know, obviously the Warner Brothers Discovery team didn't go ahead with it. So they know that something needs to be done. But at the same time, I think Brian Roberts and the team have been somewhat shy to, you know, spin out NBC. But I think it's, it's some kind of strategic action is absolutely imperative at this point.
- [21:54]
Paul Sweeney (Interviewer)
Paul, Geetha, Paul and I were just talking about the language in your note. A media re ranking and a strategic sector reset that's going to rattle a lot of folks at Comcast. Can you talk to us a little bit more about what exactly that means?
- [22:09]
Geetha Ranganathan
Yeah, Alex, absolutely. So if in fact the Warner Brothers Netflix transaction had gone through, that would have left Paramount without a dance partner, so to speak. Right. And they would, they were, they were already considered a subscale player. They would have absolutely needed another, you know, kind of, and majority of the thinking was that, yes, they might then approach Comcast and look to kind of bolster up their whole media presence. Now with the Paramount and Warner Brothers deal going through, you have, you know, obviously the media re ranking. You have the three, the big, what we call the big three. So you have Disney there with almost 100 billion in revenue. Paramount and Warner Brothers Discovery will bring in about 70 billion. And then you have Netflix with about 50 to 55 billion. That really leaves now Comcast as somewhat of a subscale player. So they, you know, this is, this is the whole thinking they need to do something, they need to do it quickly. You know, it's somewhat of a unique play Comcast because they have both distribution and content assets. So they are the biggest broadband provider right now in the United states with over 30 million households, the problem for them is their broadband business has been under a lot of pressure. So that has kind of taken the spotlight now to the media assets and media assets actually for them. Fortunately, there's a lot of focus and it's a lot of positive focus because we know that Netflix was willing to pay a 25 times multiple for the Warner Brothers studio. So you just kind of apply that multiple to the Universal studio. And they have had so many hits, you know, whether you're thinking about the Minions or Oppenheimer or Jurassic Park, Jurassic World, I mean that's a studio that delivers consistently. So you know, you just slap that multiple onto, you know, the NBC studio that should be worth at least 30 billion. And then they have the theme parks and the theme parks are really growing at a nice pace for them. We did some analysis, we said that the theme parks for, for NBC should be worth at least 40 billion. So you have an asset here which is really kind of undervalued under the Comcast umbrella. So they need to do something and they need to do it quickly.
- [24:16]
Paul Sweeney
Geetha, I've always thought two of the key advantages for Comcast are one, their management team. I've been a big fan of Brian Roberts and his management team for a long time. And the second thing is their balance sheet. They've got a very strong balance sheet, you know, but there's not a lot out there for them to buy. What do you think they should do?
- [24:33]
Geetha Ranganathan
I think the first thing that they should do, Paul, is spin out NBC. So NBC under the whole Comcast, you know, family thing is just not working out. I think the ultimate route will be for them to spin out NBC, maybe you know, kind of become this, this roll up vehicle. Maybe they, they combine with some other assets. Some of the smaller players out there could be an AMC Networks, could be alliance. Course nothing is necessarily going to be transformative, but you know, at least, you know, maybe once they're spun out, maybe they become an interesting target for Netflix. I mean, who knows? Netflix has already kind of gone this whole M and A route. Maybe Comcast becomes interesting to them.
- [25:12]
Paul Sweeney
You know, I see Fox out there and they're, I would call them a subscale player too, but boy, they're doing fine. It seems like they've got, I mean they're broadcast and their whole audience, they've got that editorial thing down. They know who their audience is. What do you think they do?
- [25:29]
Geetha Ranganathan
Yeah, so the end game for them is also a little bit unclear. Paul I mean, up until now, I think Fox has, has made all of the right decisions, you know, whether it has been to to get rid of some of the, you know, challenged cable TV networks, the studio with the whole Disney deal in 2017 and really kind of double down on live sports and news. The thing is, the one big thing that we're all kind of looking at this year is going to be the NFL renegotiations. And that's going to have some serious implications for all of these companies, whether it's Comcast with, you know, NBC exposure and Fox. Fox is the most heavily exposed to NFL programing and they're going to have to pay up. And so, you know, at that point, I think there is going to be some kind of reckoning for all of these media companies.
- [26:14]
Paul Sweeney
Stay with us. More from Bloomberg Intelligence coming up after this.
- [26:19]
IBM Representative
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [26:48]
Paul Sweeney
IBM Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts you Yep, High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash all investing involves risk of loss. See complete disclosures@Public.com, small businesses are the
- [27:49]
Chase for Business Announcer
pulse of every community. They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level that makes it possible for you to connect, learn from each other and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more@chase.com business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates. May apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [29:05]
Paul Sweeney
It's the time of the earnings cycle, the end of the earnings cycle, where we get to hear from a lot of these retailers. Today's no different. Bath and Body Works reporting some numbers here, so let's break it down. Lindsey Dutch, Consumer Hardlines Senior Analyst for Bloomberg Intelligence, joins us here. So Beth and Body Works, I know they're doing it. They're in the midst of a turnaround here. Lindsey, what did you learn on the earnings release?
- [29:25]
Lindsey Dutch
Hi Paul, thanks for having me. Yes, Bath and Body Works is aggressively pursuing a turnaround strategy. The fourth quarter we saw sales and earnings come in better than expected, but still down year over year. And then their outlook for 26 wasn't super surprising. Kind of in line with what they were expecting three months ago. You know, growth is kind of off the table as they pursue a strategy that's going to attract younger customers, a broader customer base. They're moving a little bit into wholesale. They're pulling on lots of different levers to really become back to the brand that they have been historically.
- [30:05]
Paul Sweeney (Interviewer)
Lindsey promotions are a big part of Bath and Body Works strategy. Are they driving traffic successfully or are they a sign that demand is a little bit more shaky?
- [30:17]
Lindsey Dutch
Yeah, great question. So promotions are a huge part of Bath and Body's historical strategy. The new management team is really trying to ultimately move away from that. I don't think 26 we will see a significant shift.
- [30:30]
Geetha Ranganathan
Shift.
- [30:31]
Lindsey Dutch
They said on the call they're expecting promos to be about flat this year. They do still see success from those promotional strategies. At Black Friday Cyber Monday, they elevated the strategy versus historical and that deeper discount definitely drew traffic. And I think that was a Key part of the little bit better results in the fourth quarter than they were expecting.
- [30:54]
Paul Sweeney
Lindsay, what's the Amazon.com, play here for Bath and Body Works?
- [31:00]
Lindsey Dutch
Yes, so I think that they're really looking to broaden their brand awareness with consumers that don't shop them already. So they have, you know, 40 million loyalty members. Some of those customers have been with Bath and Body Works for a very long time. They're extremely loyal to the product, the sense that they have. But this company is really looking to reach that younger shopper. They're doing pushing into new lines. They have like lip products now. And the move on Amazon is similarly broaden brand awareness, you know, reach other shoppers that they don't currently reach. So I don't see a huge push into wholesale as like a new business strategy, but it's really getting that brand in front of customers that aren't going to the mall and seeing their store.
- [31:44]
Paul Sweeney (Interviewer)
This is a company, Lindsey, that falls into the affordable luxury category. Category. What are these results tell us about the broader consumer and trading down to companies like this?
- [31:55]
Lindsey Dutch
Yes. So you know, Bath and Body Works has historically drawn customers for their value proposition and they have an everyday luxuries line that did very, very well in 24 and 25. You know, they still want to maintain their peace and in that, you know, seeking for value behavior and I think that's very important for them going forward. The new management team also wants to elevate the brand and push it maybe towards that prestige level a little bit. And in beauty broadly we've seen prestige holding up a little bit better than mass. So it's an interesting move to try to sort of elevate and move up a tier, you know, when a lot of consumers are seeking value. But I sort of understand the logic behind that, you know, just taking a step, step back where those prestige brands have held up better in this economy probably driven by a higher end consumer.
- [32:47]
Chase for Business Announcer
This is the Bloomberg Intelligence podcast available on Apple, Spotify and anywhere else you get Your podcasts listen live each weekday 10am to noon eastern on bloomberg.com the iHeartRadio app TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.
- [33:17]
Paul Sweeney
With Bali from Ishares you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is your visit www.ishares.com to view perspectives for investment
- [33:34]
Vlad Richter
objectives, risks, fees, expenses and other information
- [33:36]
Paul Sweeney
that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility.
- [33:41]
Vlad Richter
Monthly income is not guaranteed.
- [33:42]
Paul Sweeney
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- [34:17]
Chase for Business Announcer
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