>>> GOOD MORNING, THIS IS YAHOO FINANCE'S FLAGSHIP SHOW "MORNING BRIEF." WE'RE TRACKING EARLY SESSION VOLUME, AND ELEVATING YAHOO FINANCE'S MOST POPULAR NEWSLETTER. WE HAVE A JAM-PACKED SHOW FOR YOU, STOCKS TICKING HIGHER AFTER EXPENDITURES KNOWN AS PCE. MATCHING THE STREET'S EXPECTATIONS. WE HAVE COMMENTARY FROM THE CENTRAL BANK AS WELL THROUGHOUT THE DAY, INCLUDING SEVERAL FED OFFICIALS. AND LET'S GET RIGHT TO IT. THE THREE THINGS THAT YOU NEED TO KNOW. YAHOO FINANCE'S JOSH SCHAFER, BRIAN SOZZI, AND JARED BLIKRE HAVE MORE. >> HEY, SEANA, STOCK FUTURES TICKING SLIGHTLY HIGHER, THE FEDERAL RESERVE PREFERRED INFLATION GAUGE. PCE TICKED SLIGHTLY LOER, MATCHING WALL STREET'S EXPECTATIONS, HITTING THE LOWEST LEVEL IN ABOUT THREE YEARS. IT GREW, IT DECLINED FROM LAST MONTH'S 2.6 PRINT. CORE PCE, WHICH INCLUDES THE VOLATILE FOOD AND CENTERING CATEGORIES, CALM IN AT 2.8, DOWN FROM 2.9. MARKETS NOW PRICING IN THREE INTEREST RATE CUTS. FOR THE YEAR OF 2024. >>> SOFTWARE STOCKS SLIDING UP PAGES TODAY. SALESFORCE AND SNOWFLAKE DELIVERED A FEW SURPRISES. IT CAME IN BELOW ESTIMATES, BUT MARGIN GUIDES CAME IN ABOVE IT. AS MARK BENOFF CONTINUES A FOCUS ON CONTROLLING COSTS. >>> AT SNOWFLAKE, A WEAKER THAN EXPECTED GUIDANCE. INVESTORS ARE ACTING ACCORDINGLY. SALESFORCE IS SEEING MINOR UP TICK. >>> BITCOIN BACK ON THE RISE THIS MORNING. THE WORLD'S LARGEST CRYPTOCURRENCY BRIEFLY SPIKING ABOVE 54,000. BEFORE PARING GAINS EARLY THURSDAY. THE ROARING CRYPTO RALLY IS AT THE HIGHER MOMENTUM SINCE 2022, AND IT'S WITHIN SPITTING DISTANCE OF FRESH ALL-TIME HIGHS. >>> THE FED'S PREFERRED INFLATION GAUGE OUT THIS MORNING. OFF SCHAFER IS HERE TO BREAK DOWN THE NUMBERS. LET'S TALK A LITTLE PCI. >> YEAH, BRAD, PCE OUT THIS MORNING, NUMBERS LARGELY WHAT WALL STREET HAD EXPECTED. THEY HAD EXPECTED THE NUMBER TO BE PERHAPS HOTTER THAN PEOPLE WERE HOPING FOR MAYBE A MONTH OR SO AGO. THAT'S DOWN FROM 2.6%, AT CORE PCE, WHICH IS WHAT THE FED LOOKS AT HERE. CORE PCEA 2.8%. A KEY NUMBER THAT I THINK A LOT OF PEOPLE WILL BE TALKING ABOUT HERE GUYS, IS THE MONTH OVER MONTH NUMBER. 0.4%. WE HAVEN'T SEEN AN INCREASE LIKE THAT IN A LITTLE WHILE. THIS WILL PUSH THE SIX-MONTH ANALYZED RATE, WHICH IS A HOT TOPIC. THE SIX-MONTH ANNUAL -- ANNUALIZED RATE WILL COME ABOVE 2%, WHICH OF COURSE IS OUR GOAL HERE. IT WAS LARGELY IN LINE WITH EXPECTATIONS. WE WENT FROM PEOPLE EXPECTING SIX CUTS A COUPLE MONTHS AGO TO PEOPLE EXPECTING THREE THIS YEAR. WE'VE SORT OF ALREADY HAD OUR BIG SHIFT. >> JOSH, SHANKS SO MUCH FOR TEEING UP THE CONVERSATION HERE. INFLATION STILL REMAINS STICKY. THE ANNUALING IN IN THE PATH TOWARD THE FED AND THEIR 2% INFLATION TARGET REMAINS BUMPY. FOR MORE ON THE PREFERRED GAUGE, WE'RE JOINED BY MICHELLE GERARD. FIRST AND FOREMOST, WE'LL GET A LOAD OF FED SPEAK THROUGH TODAY. HOW DO YOU THINK A PRINT LIKE THIS SHIFTS I THINK WE'LL PROBABLY CONTINUE TO HEAR FROM FED OFFICIALS THAT THEY WANT TO BE PATIENT, THEY WANT TO HAVE MORE CONFIDENCE THAT INFLATION IS SUSTAINABLY MOVING TOWARD THAT 2% TARGET BEFORE THEY CUT INTEREST RATES. SINCE THE START OF THE YEAR WHEN THE MARKET WAS INITIALLY VERY OPTIMISTIC ABOUT AGGRESSIVE RATE CUTS, WE'VE SEEN THE FED PUSHING BACK, AND WITH THE DATA COMING IN MORE BUMPY, AS YOU SAID, THAN THE FED WOULD LIKE TO SEE, THAT MESSAGE HAS BEEN CONSISTENT FROM THE FED. YES, THE PEAK IN RATES MAY BE IN, BUT THE TIMING OF WHEN THEY CAN CUT IS SOMETHING THAT THEY WANT TO BE PATIENT ABOUT, GIVEN THE FACT THAT THEY WANT TO HAVE CONFIDENCE INFLATION IS IN FACT GOING TO GET DOWN TO 2%. >> DO YOU THINK THAT APPROACH MAKES SENSE? AND WHEN WE TALK ABOUT GETTING BACK TO THAT 2% TARGET, WHAT DO YOU THINK THAT WILL LOOK LIKE? >> I DO THINK IT'S CERTAINLY, YOU KNOW, THE FED BEING CAUTIOUS, WANTING TO HAVE CONFIDENCE THAT INFLATION IS ROOTING LOWER. I THINK IT'S ALSO TIED TO CONFIDENCE THAT THE ECONOMY, YOU KNOW, IS GOING TO REMAIN AT A SLOWER PACE, IN PARTICULAR THE LABOR IS KIND OF KEEPING INFLATION ELEVATED WILL MODERATE. ALSO, YOU KNOW, WE HAVE TO REMEMBER THAT POLICY IS PRETTY RESTRICTED. THE FED DID -- THEY RAISE INTEREST RATES VERY AGGRESSIVELY OVER 500 BASIS POINTS WE'RE NOT TACKING ABOUT THE FED CUTTING RATES TO GAS THE ECONOMY. WE'RE REALLY TALKING ABOUT THE FED CUTTING INTEREST RATES TO TAKE THE FOOT OFF THE BRAKE, IF YOU WILL. YOU KNOW, TO SOME EXTENT, WHILE IT'S GOOD TO BE PATIENT -- THERE'S A LOT OF ROOM IN TERMS OF TAKING YOUR FOOT OFF THE BRAKE, THAT THE FED COULD START TO DO, WHICH WE THINK IS A 2025 STORY. OF COURSE POLICY TAKES A LOT TIME TO WORK, SO THE FED SHOULD BE MOVES IN ANTS PEACE OF THAT 2% TARGET, BUT THERE'S A BALANCE TO BE STRUCK HERE. SO ARGUABLY, JUST HAVING THAT HANDLE, IF YOU WILL, DROPPING BELOW 3% I THINK HAS PUT THE FED IN A POSITION WHERE THEY'RE RIGHT THINKING ABOUT, THIS IS THE BALANCE THEY HAVE. THEY JUST WANT TO BE CONFIDENT THAT INFLATION ISN'T GOING TO REACCELERATE. BY THE FED TAKE THE FOOT OFF THE BRAKE, YOU NEW YORK CITY AND THE ECONOMY A REACCELERATION, AND THE FED HAVING TO REVERSE COURSE. THIS GETS BACK TO THEM BEING PATIENT ENOUGH THAT THEY'RE FIRMLY ON THE DOWNWARD TARGETS, THE CONSCIOUS ARE CONDUCIVE FOR INFLATION TO CONTINUE MOVING LOWER. >> MICHELLE. >> WE'LL GET THAT READING NEXT WEEK. JOBLESS CLAIMS COMING IN THIS MORNING A BIT HIGHER THAN WHAT THE STREET WAS EXPECTING. . ARE YOU EXPECTING TO SEE MUCH OF A DETERIORATION IN THE JOBS MARKET? HOW DO YOU SEE THAT PLAYING OUT AS THE FED KEEPS RATES HIGHER FOR LONGER? >> YEAH. THE FED IS HOLDING RATES HIGHER FOR AN EXTENDED PERIOD OF TIME, WE ARE CONCERNED ABOUT THE ECONOMIC IMPACT. WE THINK WE'LL SEE A DOWNTURN IN THE ECONOMY LATER THIS YEAR, THOUGH FULL DISCLOSURE, WE WOULD HAVE THOUGHT WITH THE LEVEL OF INTEREST RATES WE'RE AT NOW, WE WOULD BE SEEING MORE OF A SLOWDOWN IN ECONOMIC ACTIVITY ALREADY. WE ARE SEEING SOME LOOSENING IN THE LABOR MARKET. IT'S NOT AS HOT AS IT WAS, BUT IT'S STILL PRETTY RESILIENT. I THINK THIS IS ONE OF THE THINGS THAT THE FED THEMSELVES ARE VERY WATCHFUL OF. AS I MENTIONED, THE LABOR MARKET IS STILL SORT OF TIGHT NUMB IN A THANKS ARE FIRM. >>> MICHELLE, ALWAYS GREAT TO HAVE YOUR INSIGHT. THANK YOU. >> GOOD TO SEE YOU. THANK YOU. >>> STAY TUNED HERE. OUR OWNEVER INSCHONBERGER IS SPEAKING EXCLUSIVELY WITH LORETTA MESTER, COMING UP A YAHOO FINANCE AT 3:30 P.M. EASTERN TIME TODAY. YOU WON'T WANT TO MISS THAT. >>> ANOTHER BIG STORY IS SALESFORCE, JOINING THE LIKES OF META. THE LATEST TECH GIANT TO ANNOUNCE A -- >> VOLUME TIFF TRADING, SEANA, INITIALLY SALESFORCE SHARES TICKED LOWER AFTER THE MARC BENIOFF EARNINGS CALL. I HAVE MORE ON THE BLOG. I ENCOURAGE YOU TO GO AND -- WHY ARE WE SEALING THIS? REALLY, AN EARNINGS CALL, WELL RECEIVED BY BENOFF, TALKING ABOUT WEAKNESS IN THE CONSUMER PARTS OF THE BUSINESS. REVENUE GUIDANCE SLIGHTLY BELOW CONSENSUS, DEFINITE ON WHAT NUMBERS YOU ARE USING, AND THE GUIDANCE A BIT BELOW WHERE SOME FOLKS HAVE THEIR ESTIMATES. I THINK THAT'S MISSING THE BIGGER STORY HERE, AND WHY YOU'RE SEEING SOME REVERSAL. LET'S LOOK AT A FIVE-YEAR CHART THAT I THINK WILL HELP FILL THIS OUT. IF YOU LOOK AT THE EARLY PART OF 2023, SALESFORCE SHARES ARE AT THE LOWS AT LEVELS THAT MANY INVESTORS HAVE NEVER SEEN SEEN BEFORE, BUT FROM 2023, THIS STOCK HAS BEEN UP IN A STRAIGHT LINE. DRIVEN A LOT OF MARKET EXPANSION, AND IMPORTANTLY THOSE STORIES THAT HAVE DRIVEN SHARES HIGHER, THAT CONTINUED IN THE EARNINGS CALL. TAKE A LISTEN TO WHAT BENIOFF SAID ABOUT WHERE SALESFORCE IS TODAY, WHERE IT HAS COME, AND ULTIMATELY WHERE IT'S GOING. IT WAS OVER A YEAR AGO WE HAVE SALESFORCE HAD TO TRANSFORM, AND MANY OF YOU CAME TO ME, OUR WHOLE TEAM AND YOU SAID, LOOK, WE'RE GOING TO TRANSFORM THE WHOLE COMPANY. WE COULD NOT HAVE DONE IT WITHOUT YOU. WE WANT WE WERE GOING TO DOUBLE DOWN ON MAKING OUR CORE PRODUCTS BETTER. WE'VE DONE THAT. >> I'VE WATCH HIM TRANSFORM THE COMPANY AGAIN. IT'S NOT ME BEING POLLYANNA-ISH, IT'S WATCHING IT REAL TIME, AND THE STREET UNDERESTIMATED, OR ABOUT CUTTING EXPENSES AT THIS COMPANY, AND RUNNING A MORE SHAREHOLDER FRIENDLY ENTITY. HERE'S ANOTHER CHECKLIST, AS YOU GUIDE YOURSELF THROUGH THE SALESFORCE EARNINGS REPORT. NEW BUYBACK, VERY IMPORTANT, ANOTHER BIG TECH COMPANY IN THE VAIN OF META, INITIATING A DIVIDEND FOR THE FIRST. ALSO ANNOUNCING A NEW $10 BILLION BUYBACK PLAN. SECONDARILY, THE COMPANY IS INNOVATING FIERCELY IN A.I. MARC TEED UP ANOTHER EVENT NEXT WEEK WHERE THEY'RE LIKELY TO UNVEIL A HOSE OF NEW PRODUCTS. HISTORICALLY THE MARKET HAS LIKED THESE ANNOUNCEMENT, THIS SALESFORCE RELEASED LATE LAST YEAR. AS I MENTIONED HERE, IT HAS BEEN A TRUE, I WOULD SAY CULTURAL AND BUSINESS MODEL RESET. OUTLINING 200 BASIS POINTS IN OPERATING MARGIN EXPANSION, IN ADDITION TO EVERYTHING THEY DROVE. THE STREET LIKES THAT. I THINK THAT'S WHY YOU'RE SEEING A REVERSAL. I'M GOING TO GO BACK ON THE YAHOO FINANCE BLOG AND IT'S A BIG DALE FOR SALESFORCE. >> WE APPRECIATE THAT BREAKDOWN. WE'RE GOING TO CONTINUE THE ELEMENTS OF THAT CONVERSATION LATER ON IN THE SHOW. SOZZ, WE APPRECIATE IT. >>> LET ACE PIVOT AND TALK BITCOIN. THIS WEEK, THE CURRENCY HAS FLOWN PAST 63,000 FOR THE FIRST TIME SINCE NOVEMBER OF 2021. FOR MORE ON WHAT WE CAN EXPECT, JARED BLIKRE TO BREAK IT DOWN. HEY THERE, JARED. >> IT'S ALMOST A SLAM DUNK THAT WE GET PAST THE REPORT HIGHS ETHEREUM ALSO JOINING THE PARTY HERE. WE CAN SEE SOME PRING TOKEN, BUT HERE'S A FIVE-YEAR CHART, MUCH DIFFERENT FROM WHAT WE WERE LOOKING AT, STILL IN THE LOWER END OF ITS RANGE. WE'LL SEE IF IT CAN GET OFF THE GROUND IN THE LAST FIVE DAYS. TECH IS STILL THE NUMBER ONE DISCRETION. >>. >>> KEEP IT RIGHT HERE ON YAHOO FINANCE. MUCH MORE TO GET INTO. UP NEXT, PARAMOUNT SHOWING STRONG GROWTH IN STREAMING, DESPITE DECLINING REVENUE NEW. WE HAVE MORE OF YAHOO FINANCE'S TRENDING TICKERS, NEXT. >>> PARAMOUNT SHARES CLIMBING HIGHER UP ABOUT 3.5 FORM INTO THE -- NOW THE MEDIA GIANT ALSO ANNOUNCING IT EXPECTS TO ACHIEVE PROFITABILITY FOR PARAMOUNT PLUS IN 2025 IN THE U.S. FOR MORE ON THE RESULTS. WE WANT TO BRING IN ROBERT FISHMAN, A SENIOR ANALYST. ROBERT, GOOD TO HAVE YOU HERE. WHAT'S YOUR FIRST TAKE ON THE MOST RECENT TERRENCE REPORT. ? THEY'RE VERY MUCH FOCUS THE IN TERMS OF REDUCING THE LOSSES. THEY GAVE GUIDANCE FOR TO HIT '25 CLEARLY THERE'S BEEN LOTS OF SPECULATION OVER THE FAST FEW MONTHS IN TERMS OF POTENTIAL PARTNERSHIPS. ULTIMATELY IT COMES DOWN TO THE APPETITE THAT ANY ACQUIRER WANTS TO TAKE ON. THE RISK THAT COMES WITH THAT WITH ADVERTISING HEADWINDS AND CORD CUTTING, EVERYTHING THAT WE'RE ALL THE FAMILIAR WITH, BUT REALLY THE QUESTION IS WHAT IS THE VALUE OF THESE ASSETS? >> DOES IT CHANGE AT ALL THE POSITION OF PARAMOUNT I'D SAY THE BIGGEST DISADVANTAGE IS REALLY THE LACK OF CASH THAT THE COMPANY PRODUCES. THEY DID SURPRISE, IF YOU WANT TO CALL IT, A BIT TO THE UP SIDE IN TERMS OF EXPECTATIONS WITH FREE CASH FLOW GROWING SLIGHTLY OVER THE POSITIVE CASH FLOW THEY GOT TO IN '23. SO, YOU KNOW, THAT IS, I GUESS, A STEP IN THE RIGHT DIRECTION, BUT RELATIVE TO MOST OF THESE OTHER IMMEDIATE BRA COMPANIES, THERE IS NOT A LOT OF FREE CASH FLOW, GIVEN THAT THE DIFFERENT AND THE LEVERAGE HERE. >> IT SEEMS LIKE A COMPANY THAT'S TRYING TO GET THAT DIRECT TO CONSUMER SYNERGIES HERE, BUT THAT'S BEEN ACHIEVED BY SOME OF THE OTHER COMPETITORS, BUT ALSO ANNOUNCING SOME OF THE ADVERTISING TIERS. WE'RE SEEING THAT LANDSCAPE KIND OF HEAT UP HERE. WHAT DOES THAT FLOW THROUGH MEAN FOR PARAMOUNT I WOULD SAY THEY'RE STILL RAMPING UP THERE, TALKING ABOUT THE FACT THAT THERE ARE OPPORTUNITIES THERE THEY ALSO HAVE PLUTO, ONE OF THE FAST CHANNELS. IT SEEMS LIKE GROWTH HAG SLOWED THERE. >>> ANOTHER TRENDING TICKER WE'RE WATCHING THE COMPANY SAW REVENUE RISE DESPITE AN OVERALL SALES DECLINE. WE DID SEE HOW IT SHAPED UP IN THE LAST QUARTER OF 2023. QUARTERLY REVENUE DID INCREASE. DUE TO THE HIGHER PRICES LARGELY OFFSET BY THE PERFORMANCE HERE IN THE U.S. BUD LIGHT TRIES TO TURN THE CORNER FOLLOWING THE BOYCOTT THAT LASTED THROUGH 2023 WE SAW VOLUMES DECLINE 2.6% LAST QUARTER COMPARED TO A 1.48% DROP THAT THE WALL STREET DID EXPECT. REVENUE DID COME IN LOWER DOWN 17.3% LAST QUARTER AS SALES TO RETAILERS DROPPED AS WELL, DOWN 12.1%, DUE TO THE POOR PERFORMANCE OF BUD LIGHT. AND SALES WE'LL CONTINUE TO WATCH, ESPECIALLY THE RETAILERS SHAPE UP THEIR SHELVES IN MARCH AND APRIL FOR THE CRITICAL MAY, JUNE, JULY SUMMER MONTHS THAT ARE SO IMPORTANT FOR THE BEER INDUSTRY ON THE CALL, THE CEO SAYING IT WAS A CHALLENGING YEAR FOR THE BUSINESS. THEY CONTINUED TO IMPROVE GRADUALLY, AND THEY ENDED 2023 ABOUT THE MARKET SHARE HERE IN THE U.S., ALL THIS WHILE THE STRIKE WAY AVERTED YESTERDAY EVENING. >>> THE OPENING BET IS JUST A FEW MINUTES AWAY. WE'LL LOOK AT HOW INVESTORS ARE DIGESTING THE LATEST PRINT AND WHAT IT MIDDLE EASTERN, NEXT. >>> SNOWFLAKE UP FIRST, YOU'RE LOOKING AT LOSSES OF ABOUT 20%, FALLING SHARPLY AFTER THE COMPANIES PROJECTED REVENUE BELOW STREET EXPECTATIONS. ALSO, THE DISCLOSURE OF THE LONGTIME CEO FRANK SLOOTMAN. THE COMPANY POSTING A HUGE EARNINGS BEAT, AND MADISON MILLS JOINS US FROM THE FLOOR OF THE STOCK EXCHANGE. LET'S START WITH THE NEGATIVE, THEN GET TO THE POSITIVE. THIS MOVE LOWER FIRST IN SNOWFLAKE. >> HEY, IF YOU'RE THE CEO RETIRES, THERE'S NO BETTER COMPLIMENT THAT IS THE STOCK HEADING TO THE WORST DAY EVER WHEN YOU ANNOUNCED YOU'RE LEAVING THE COMPANY. THEY ARE EXPECTING TO HAVE THEIR WORST DAY EVER. THIS COMES A COUPLE YEARS AFTER THIS COMPANY BECAME THE MOST SUCCESSFUL CLOUD IPO EVER RIGHT HERE ON THE NEW YORK STOCK EXCHANGE. THIS INDICATES A BIT OF THE KIND OF EXPECTATIONS FOR FORWARD GUIDANCE WE HAVE SEEN ON WALL STREET PLAYING OUT ON THIS EARNINGS PRINT. THEIR EARNINGS FOR THE LAST QUARTER WERE PRETTY GOOD. THEY BEAT ON SALES. THEY BEAT ON REVENUE, BOTH THOSE METRICS UP BY OVER 30%, STILL SEEING THE STOCKS PLUNGING AFTER THE DOWNWARD REVISION. THAT DOWNWARD REVISION FOR SOMETHING LIKE PRODUCT REVENUE, THOUGH, ONLY MISSED BY $9 MILLION. THINK ABOUT HOW SMALL THAT REVISION IS AND THE STREET'S REACTION IS SO SEVERE. IT INDICATES A BROADER PICTURE WE'VE BEEN SEEING. ANY NAME THAT'S GOING TO BE RELEVANT TO THIS BIG TECH RALLY WE'VE BEEN SEEING, AND ANY NAME RELATED TO A.I. IS GOING TO HAVE TO PROVE GROWTH ON TOP OF GROWTH ON TOP OF GROWTH. THAT'S WHAT THEIR COMPETITOR OKTA WAS ABLE TO DO. THAT'S WHY THEY'RE HEADING TO THEIR 52-WEEK HIGH. THAT DIGITAL COMPANIES ISSUING STRONG GUIDANCE FOR YEARS AHEAD. WE KNOW WE MUST BE CLOSE TO THE OPENING BELL HERE, JUST SECONDS AFTER. >> YOU HAVE RAONEER. AND THEN MIDTOWN MANHATTAN YOU HAVE ST. JUDE ACE CHILDREN'S RESEARCH HOSPITAL. EXCELLENT WORKLE TEAM DOES OVER THERE. SOME FUNFETTI FOR THE OCCASION HERE. WE HAVE PCE, THAT DROPPED THIS MORNING, A SLEW OF EARNINGS WE WERE RUNG THROUGH, SO ALL YOU CONSUMERS STAY TUNED. THE DOW, THE S&P 500 AND THE NASDAQ AS IT'S ALL OPENING UP. MADY MILLS IS ON THE FLOOR OF THE NEW YORK STOCK EXCHANGE. TODAY'S PCI REPORT, MADY, SHOWING INFLATION IS IN LINE WITH EXPECTATIONS. HOW ARE INVESTORS REACTING? >> EVERYONE IS THRILLED, RIGHT? EMILY ROWLAND OVER AT JOHN HACK CONINVESTMENTS CALLING IT THE EVERYTHING IS AWESOME RALLY. I TOOK AT LOOK AT WHAT'S GOING ON IN TERMS OF PRICING FED RATE CUTS MOVING FORWARD, HEADING INTO THE PRINT THIS MORNING, IT LOOKS LIKE THERE WAS ABOUT A 60% CHANCE OF A CUT IN JUNE. THAT WENT UP RIGHT AFTER THE PRINT TO OVER 65%. WE ALSO SAW THAT YIELDS WERE UP HEADING INTO THAT PRINT. I ALSO WANT TO LOOK AT THE DETAILS. THEY TALKED ABOUT THE BIG RAISE IN INCOME, BUT IF YOU LOOK AT WHAT CONTRIBUTED TO THAT, DIVIDEND INCOME CONTRIBUTED TO, THAT INDICATES A CONTINUED STORY OF THE BY FUR KAY SO WE'RE CONTINUING TO SEE THAT DIVIDENDS PLAYING OUT ON WALL STREET. I'M CURIOUS TO SEE HOW THAT CONTINUES TO FRAME. STORY AS WE MOVE FORWARD. I IMAGINE MANY MAY BE THRILLED THAT IT'S ALSO WAFFLE THURSDAY, AN OCCASION WHERE I OVER-INDULGE ON A CYCLICAL BASIS. WAFFLE THURSDAY. >> EVERY THURSDAY? >> NO, NO, NO, EVERY THURSDAY. WEEK IN, WEEK OUT. ANYBODY CAN GET IT IT'S IN THE CAFETERIA THERE. GOOD WAFFLES. ONE THING THERE THEIR BANKING ON A YEAR OF STABILIZATION FOR THE INDUSTRY. AND LAID OUT SOME OF -- THE LARGEST DRIVERS OF THE COMPARABLE SALES DECLINES. HOME THEATERS, APPLIANCES, MOBILE PHONES AND TABLETS, WHAT IS LEFT IN THE STORY? GAMING, THAT WAS THE ONLY ELEMENT THAT KIND OF OFFSET SOME OF THE DECLINES THEY HAD SEEN. >> THEY ARE MAKING SOME PROGRESS HERE, WHEN YOU LOOK AT THE SHARE'S REACTION. THIS MIGHT BE A STEP AT LEAST IN THE VIEW OF INVESTOR SHAREHOLDERS IN THE RIGHT DIRECTION IN TERMS OF THE TWO-YEAR SLUMP. MAYBE NOW A BIT OF A TURNAROUND, BUT WE HAVE TO PUT THIS IN PERSPECTIVE. IT WAS LESS THAN EXPECTED DECLINE. THE STREET HAS BEEN BRACING THEMSELVES. IT BEAT THE STREETS ON EXPECTATIONS, AND ALSO WHEN IT COMES TO THE FULL-YEAR GUIDANCE, WE KNOW THE COMPANY PROJECTED DECLINE OF 3% FOR FLAT HERE IN THE CURRENT YEAR OF FISCAL 2024. THEY PREVIOUSLY LOWERED THEIR 2024 SALES GUIDANCE BACK IN NOVEMBER. SO ALL IN, THIS REPORT AT LEAST BETTER THAN WHAT THE STREET HAD BEEN BRACING FOR. >>> ALSO TO ANOTHER RETAIL NAME, THAT'S BIRKENSTOCK, SHOWING REVENUE GROWING 26% AS DEMAND IN THE U.S. STRENGTHENS. THIS IS ANOTHER NAME HERE, SHOWING THAT CONSUMERS ARE STILL SPENDING THIS ISN'T EXACTLY THE LOWER END OR MIDRANGE T IT'S KIND OF CONTROVERSIAL WHETHER YOU SHOULD BE PAYING THAT MUCH FOR A PAIR OF SANDALS, THIS IS A COMPANY THAT A LOT OF PEOPLE ARE QUESTIONING THE GROWTH METRICS GOING FORWARD, AND WHAT THE OPPORTUNITY TO SCALE LOOK LIKE IN THE FUTURE. YOU CAN SEE EUROPE A STANDOUT WITHIN THIS REPORT, UP 30% ON A YEAR-OVER-YEAR BASIS. >> I CAUGHT A LOT OF FLAK IN THE NEWSROOM. I KNOW IT'S NOT EXACTLY THE SAME, BUT FOR ME IT WORKS. WHERE THEY CAN CONTINUE TO TAP IN. AND ACTUALLY THEY'RE DOWN ON THIS MOVE HERE, SO INTERESTING. IT'S BEEN AN INTERESTING MOVE TO THE UP SIDE. ONE OF THE THINGS THAT I THINK INVESTORS MIGHT BE LOOKING AT HERE THAT THE COMPANY LAID OUT, IMPACTING SOME OF THAT MIDTERM PROFITABILITY IS HOW THIS COMPANY WILL SPEND FURTHER INTO THE OPERATION. THEY TALKED ABOUT ACHIEVES THE ABOVE INDUSTRY AVERAGE FULL-PRICE REALIZATION, BUT AT THE END OF THE DAY, THERE'S FOCUSING IN ON STRATEGIC. >>> LET'S GET TO ONE OF OUR OTHER BIG STORIES OF THE DAY, THAT'S THE LATEST PRINT ON INFLATION. PCE INFLATION REPORT OUT THIS MORNING, MEETING THE STREET'S EXPECTATIONS, COMING IN LINE WITH THE EXPECTATIONS. WE HAVE TO BRING IN MICHELLE SCHNEIDER, CHIEF STRATEGIST. GREAT TO HAVE YOU HERE. LET'S TALK ABOUT THE REACTION PLAYING OUT. BRACING THEMSELVES FOR LOOKING AT GAPES HERE SHORTLY AFTER THE OPEN. HOW MUCH OF THE INFLATION TREND HAS BEEN ALREADY PRICED INTO THE MARKET? >> THAT'S A GOOD QUESTION. IF WE CAN ARGUE THAT INFLATION BOTTOMED BACK IN OCTOBER, WHERE WE WERE STARTING TO SEE UP TICKETS, THE FACT THAT PCE CAME IN LINE, DOES THAT MEAN IN AND OUT WHATEVER BLIP WE HAD RISING IN INFLATION IS NOW OVER, AND IT'S CERTAINLY SOMETHING I WOULD NOT NECESSARILY GET TOO CONFERENCEABLE WITH. TWO REASONS. NUMBER ONE, IF WE GO BACK AND LOOK AT THE OVERLAY CHARTS OF THE 70s AND WHAT'S HAPPENED CONC CONCURRENTLY, WE SAW THEM COME DOWN TO 77. AND IF THE PREDICTIONS ARE CORRECT AND WE START TO SEE ANY KIND OF LOOSENING OF MONETARY POLICY AS WE GET TOWARDS JUNE, WAS KIND OF EXACTLY AT THE SAME TIME WHEN WE SAW THE TROUGH IN THE CPI WAS THE TROUGH WE'RE SEEING RIGHT NOW IN THE 2024, AND WE COULD START TO SEE WITH ANY LOOSENING RISE. SO I WOULD SAY BE HAPPY NOW. I WOULDN'T GET TOO COMPLACENT STILL. >> HOW DOES THAT LEAN FURTHER, THEN, INTO THE HIGHER FOR LONGER ASSISTANTS? >> WELL, YOU KNOW, THERE'S ALL TWO WAYS TO LOOK AT THINGS. IN TERMS OF THE FED, IF THEY KEPT THINGS EXACTLY THE WAY THEY WERE, LIKE I ALMOST THINK ABOUT A HOLIDAY FORECAST, YOU KNOW, WHEN YOU LOOK AT THE FAMILY AND IT'S THAT MOMENT IN TIME, THAT'S KIND OF WHERE THE FED IS AT NOW. THEY HAVE POSSIBLE CURBED INFLATION. WE COULD BE AT THIS PERFECT MOMENT RIGHT HERE. THE HIGHER NO LONGER MAKES SENSE IF WE DON'T START TO SEE MORE RECESSIONARY FACTORS, WHICH SO FAR WE HAVE MANAGED TO AVOID. HOWEVER, WHAT WILL HAPPEN IF WE SEE SOME SPIKE IN INFLATION IN THE ROAD. IF THAT STAYS PUT, WOULD THAT BE ENOUGH? AT THE SAME TIME THEY DON'T PROBABLY WANT TO RAISE RATES UNLESS THEY START TO SEE INFLATION GET OUT OF CONTROL. THAT'S WHY WE'RE LOOKING FOR SPECIFIC SIGNS WHY THAT MIGHT HAPPEN. >>> WE HAVE INFLATION PRINTS, AND THEN WE ALSO HAVE EARNINGS AS WE WIND DOWN THE MOST RECENT EARNINGS SEASON HERE. ON THE FUNDAMENTALS, WHAT ARE YOU SEEING? >> IN TERMS OF THE EARNINGS, THEY OBVIOUSLY WERE BETTER THAN WHAT PEOPLE THOUGHT. I'M PRETTY EXCITED RIGHT NOW. I HAVE MY EYES ON SILVER, SUGAR, THE NORMAL WAYS WE HAD TO LOOK AT IT. SUGAR DOESN'T GO FLYING, THAT'S GOOD. SILVER DOESN'T OUTPERFORM GOLD, THAT'S ALL GOOD. WHAT I'M LOOKING AT NOW IS MY ECONOMIC MINOR FAMILY. I THINK THE EARNINGS ARE STARTING TO SHOW SOME OF THE AREAS, LIKE WITH BEST BUY, BUT IN THE CONSUMER AREA ARE STRONG, AND STRONG. IYT TRANSPORTATION STRONG. >> WHAT THAT TELL ME IS THE MARKET IS TRYING TO STRETCH BEYOND TECH, AND WHAT WOULD MAKE IT GROW? TWO THINGS. I THINK ONE IS THE VANITY TRADE, WHICH I LIKE TO TALK ABOUT, SPURRED BY THE DIET DRUGS THAT THEY WORK, IF THEY CAN SPILL OVER, FEELING BETTER ABOUT THEMSELVES, AND THE OTHER IS THE POTENTIAL RESHORING THAT WE'RE STARTING TO HEAR MORE AND MORE ABOUT. SO ON THE SPUR OF WHAT WE SEE'S EARNINGS. NUMBER ONE IS WHERE INFLATION GOES, AND NUMBER THREE IS HOW MUCH MANUFACTURING PRODUCT CAN WE BRING BACK HERE AND MAKE OUR ECONOMY GROW. >> ECONOMIC MODERN FAMILY, EVEN BETTER PORTFOLIO THESIS. MICHELLE, GREAT TO SPEAK WITH YOU, AS ALWAYS. THANK YOU. >> THANK YOU. >>> WE HAVE ALL YOUR MARKETS ACTION AHEAD. STUDENT. YOU'RE WATCHING YAHOO FINANCE. >>> SHARES TRADING HIGHER AS REPORTING RECORD FOURTH QUARTER REVENUE OF $347 MILLION, UP 90% FROM JUST A YEAR AGO. THE COMPANY DID SEE A SLIGHT PULL BACK IN SALES. WE WANT TO BRING IN CELSIUS' CEO, JOHN FELTY. 39 MILLION IN NET INCOME. TALK ABOUT WHERE YOU'RE SEEING THAT DEMAND AND HOW THAT SETS YOU UP FOR THE REST OF 2024. >> THANKS FOR HAVING US. IT'S EXCITING. IT'S JUST A TIME TO CELEBRATE. WE'RE NOW A BILLION DOLLAR COMPANY, WHEN YOU SEE RECORD REVENUES, RECORD EARNINGS. WE SEE A LONG RUNWAY AHEAD. THE TIMING HAS NEVER BEEN BETTER, REALLY CHANGING THE WAY PEOPLE THING ABOUT ENERGY DRINKS. RIGHT NOW THE CATEGORY IS ABOUT TO FLIP, WHERE 50% ALREADY SUGAR FREE FOR THE FIRST TIME IN HISTORY. WE'RE EXCITED ABOUT THAT. OVER A TEN SHARE IN THE CA CATEGORY, WHICH HASN'TING DONE IN THE LAST DECADE. IT'S REALLY GOTTEN A LOT OF LEGS ON THE PERFORMANCE SIDE OF YOUR MARKETING PITCH AS WELL. WHY DO YOU THINK THAT'S WORKING WELL WITH CONSUMERS NOW? >> OUR DNA, WE'RE ALL ABOUT LIVING FIT. IT'S ABOUT ACCOMPLISHING YOUR GOALS INAND OUT OF THE GYM. WE JUST RENEWED OUR MULTI-YEAR DEAL WITH FERRARI WITH F1, PARTNERING WITH MLS ON A NATIONAL BASIS. WE'RE INSPIRING PEOPLE TO SEE THEIR BEST DAY IN AND DAY OUT. WE PARTNERED WITH JERSEY MIKE'S, AND WE JUST EXPANDED INTO OVER 3,000 DUNCAN DOUGH NEWS FOR THE FIRST TIME. PEOPLE ARE CONSUMING CELSIUS OUT OF TRADITIONAL ENERGY, SO WE THINK WE HAVE A BIGGER PLAY HERE. >> REBEL, MONSTER RAISED THEIR PRICES. WHAT DOES YOUR STRATEGY LOOK LIKE FOR THAT? DO YOU HAVE ANY PLANS TO RAISE PRICES? >> WE HAVE A PRICING ARCHITECTURE, PROMOTIONAL STRATEGY WE STICK TO. WE'LL CONTINUE TO EVOLVED. WE'RE ABOUT GROWING REVENUE, AND INSPIRING PEOPLE TO LIVE THEIR BEST LIFE. >> I'M TRYING TO LIVE MY BEST LIFE ON A BUDGET, JOHN, ARE PRICES GOING UP IN. >> WE HAVE A VARIETY OF DIFFERENT PROMOS AND DEALS. WE'LL SEE HOW THE CATEGORY GOES. WE'RE BEING VERY METHODICAL. IF YOU LOOK AT PRICE ELASTICITY, WHEN YOU LOOK AT CONSUMERS LOOKING TO CUT SOMETHING OUT OF THEIR BUDGET, LIKELY THAT EXTRA TRIP TO THE RESTAURANT, MAYBE THAT DESSERTS, AUTHORITY TYPES OF ITEMS, WE'RE NOT SEEING THAT HISTORICALLY. >> JOHN FIELDY, I'VE NEVER SEEN AN INSTANT WHERE YOU DIDN'T HAVE A CELSIUS IN YOUR HAPPENED. WE ALWAYS APPRECIATE YOUR TIME. >> THANK YOU. >>> COMING UP, SHARES OF 3 C A.I. ARE POPPING AFTER THE BREAK. >>> SHARES OF 3 CAI, NOW SUBSCRIPTION REVENUE RISING. THE REPORT OVERALL ANOTHER BOON TO THE RECENT TECH RALLY THAT WE HAVE SEEN DRIVEN BY EXCITEMENT SURROUNDING A.I. WE WANT TO BRING IN TOM SEIBEL AND BRIAN SOZZI IS JOINING US. TOM, GREAT TO SEE YOU AGAIN. SALES UP 18%. TALK TO US MORE ABOUT WHAT YOU'RE SEEING DEMAND-WISE AND WHAT YOUR GROWTH PROSPECTS ARE GOING FORWARD IN CONSUMER GOODS, AND WHAT HAVE YOU. WE'RE VERY WELL POSITIONED TO TAKE ADVANTAGE OF THIS MARKET, AND BUSINESS IS GOOD. >> GOOD TO SEE YOU AGAIN. I THINK INVESTORS STILL MAY NOT UNDERSTAND THE PROGRESS WE'RE MAKING IN TERMS OF THE FEDERAL BUSINESS. >> WALK OUR INVESTORS THROUGH EXACTLY WHAT YOU'RE DOING WITH FEDERAL BUSINESS, EVEN SPECIFICALLY WITHIN THE MILITARY. >> A.I. IS CLEARLY A STRATEGIC MANDATE. THAT MIGHT BE ONE OF THE LARGEST ENTER PRICE A.I. APPLICATION DEPLOYED ON THE PLANET. LOGISTICS FOR TRANS-COM. COMMON VIEW OF THE BATTLEFIELD WHILE INFUSING DATA FROM HIGHER DRONES, A.I.S., GROUND-BASED INTEL SHOWING THE VARIOUS COMBATANT COMMANDS. THESE ARE EXAMPLES OF APPLICATIONS WE'RE INVOLVED IN IN THE DEPARTMENT OF DEFENSE. THEY'RE STRATEGIC, IMPORTANT AND ESSENTIALLY FOR THE SECURITY OF THE FREE WORLD. >> IT'S IMPORTANT THAT CUSTOMERS AND COMPETITORS OF YOURS ARE TRYING TO FIGURE OUT LONG OF A TERM OF CONTRACT IT MAKES SENSE TO SIGN ON TO. WHAT ARE YOU HEARING FROM YOUR TEAM AND HOW ARE YOU KIND OF EXTRACTING THE MOST VALUE OUT OF THOSE POTENTIAL AND PORT FOR I DON'T CLIENTS? >> WE'RE IN THE BUSINESSSH WITH THE PRICING STRUCTURE THAT THEY WANT. OUR CUSTOMERS HAVE THE ALTERNATIVE THE LICENSING OUR PRODUCTS MONTH TO MONTH, IN WHICH CASE THEY JUST PAY A MONTHLY CONSUMPTION FEE FOR THE USING, OR MANY CUSTOMERS WHO ARE MAKING MORE STRATEGIC INVESTMENTS IN C3.AI WILL CHOOSE A SUBSCRIPTION-BASED PRICING, WHERE THEY AGREE TO MULTI-YEAR PRICING AGREEMENTS TO BASICALLY -- THIS ENABLES THEM MORE CERTAINTY IN THEIR COST STRUCTURE GOING FORWARD. WE'RE BASICALLY IN THE BUSINESS OF SERVING OUR CUSTOMERS, AND STRUCTURING OUR PRICING MODELING TO MEET EACH INDIVIDUAL'S NEEDS. >> I SAW YOU IN DAVOS, AND THE A.I. TRADE WAS HOT THEN. SINCE THEN IT'S BEEN RATCHETED UP SEVERAL GEARS. EVEN WHAT YOU GUYS REPORTED HERE, THE INVESTOR ENTHUSIASM SEEMS TO HAVE REACHED A NEW LEVEL. WHERE ARE WE? AND ARE INVESTORS MAKING TOO MUCH OF THIS MOMENT? >> THIS IS A SECULAR CHANGE IT'S DIFFICULT TO OVERESTIMATE THE POWER AND IMPACT OF A.I. YOU KNOW, I THINK WE'RE IN, YOU KNOW, THE FIRST HALF OF THE FIRST INNING OF THE FIRST BATTER ON HIS WAIT TO THE PLATE. THIS IS NOT EPHEMERAL. THIS IS VERY SIGNIFICANT. IT'S VERY IMPORTANT AND IT'S GOING TO BE HUGE. >> TOM, YOU TALKED A LOT ABOUT OF TRACTION YOU ARE SEEING, DEMAND ON THE FELL SIDE OF THINGS. I'M CURIOUS WHAT YOU'RE SEEING DEMAND-WISE FROM THE OTHER INDUSTRIES, AND WHERE YOU SEE THE MOST GROWTH OPPORTUNITY GOING FORWARD? >> I THINK THIS COVERS EVERY ASPECT. CONSUMER PACKAGESED GOOD, ENTERT ENTERTAINMENT, FOOD DISTRIBUTION, MANUFACTURING, OIL AND GAS, UTILITIES. I MEAN, THIS IS A FUNDAMENTAL CHANGE, OKAY, IN THE NATURE OF THE WAY WE'RE APPLYING INFORMATION TECHNOLOGY TO DELIVER, YOU KNOW, HIGHER QUALITY PRODUCTS AT LOWER COSTS AND THE GOVERNMENT SERVICES INTO THE HANDS OF MORE SATISFIED CUSTOMERS AND CONSTITUENTS AT LOWER ENVIRONMENTAL IMPACT. THIS IS A GENUINE BIG DEAL. THERE'S NO ASPECT OF THE ECONOMY THAT IS NOT FUNDAMENTALLY STRUCTURED BY THE APPLICATION OF ARTIFICIAL INTELLIGENCE. >> TOM, I THINK YOU GAVE A MASTER CLASS AND DEPTH-FULL ANSWER. I URGE ALL OF OUR VIEWERS TO CHECK IT OUT. YOU DID LOSE ME AT DATA EX-FILTRATION. I HAVE TO WRAP MY HEAD AROUND THAT. THANK YOU, TOM, FOR JOINING US. >>> UP NEXT, WE BREAK PENDING HOME SALES, THOSE NUMBERS ARE OUT AT 10:00 A.M. EASTERN TIME, AND THE NEW CEO ON THE COMPANY'S LATEST EARNINGS REPORT IN THE 10:00 HOUR. ♪ >>> WELCOME BACK, EVERYONE, I'M BAD BRAD ALONGSIDE SEANA SMITH. WE'RE 30 MINUTES INTO THE TRADING DAY. LET'S TAKE A LOOK AT HOW THINGS ARE SHAPING UP RIGHT NOW. STOCKS TRADING HIGHER AFTER THE LATEST READ ON INFLATION PCE CAME IN IN LINE WITH THE STREET'S EXPECTATIONS,THE ANNUAL GAUGE FALLING TO THE LOWEST LEVEL SINCE MARCH OF 2021. >>> SHARES OF AMC FALLING AFTER THE COMPANY POSTED A HIGHER THAN EXPECTED LOSS OF 83 CENTS A SHARE. THE COMPANY DID BEAT REVENUE ESTIMATES, THOUGH, HELPED IN PART BY THE DISTRIBUTION OF CONCERT MOVIES, INCL INCLUDING "TAYLOR SWIFT: THE ERAS TOUR" AND "RENAISSANCE BY BEYONCE." >>> DUOLINGO SAID ITS DAILY ACTIVE USERS ROSE BY 65% TO NEARLY 27 PEOPLE. >>> BETTER INGREDIENTS, BETTER EARNINGS. PAPA JOHN'S SHARES GETTING A NICE BOOST TODAY, THE COMPANY REPORTING RECORD SYSTEMWIDE SALES. NORTH AMERICA COMPARABLE SALES WERE ALSO UP 2%. THE COMPANY HAS BEEN FOCUSED ON GROWING ITS NORTH AMERICA BUSINESS. WE SHOULD, HOWEVER, NOTE THAT THE INTERNATIONAL COMPARABLE SALES WERE DOWN BY 6%. >>> LET'S GET YOU SOME BREAKING NEWS. PENDING HOME SALES FALLING 4.9% IN THE MOST RECENT MONTH OF JANUARY. THAT WAS DOWN ON A MONTH OVER MONTH BASIS. THE BIGGEST MONTHLY DROP THAT WE HAVE SEEN SINCE AUGUST. NOW, WE'RE TALKING ABOUT THIS BECAUSE IT REALLY IS A KEY INDICATOR, A FORWARD-LOOKING INDICATOR, FOR WHAT HOME SALES ARE GOING TO LOOK LIKE HERE IN THE COMING MONTHS WHEN WE TALK ABOUT CONTRACT SIGNINGS. DIGGING IN EVEN FURTHER ON THOSE MONTH OVER MONTH COMPARISONS HERE, CONTRACT SIGNINGS ROSE IN THE NORTHEAST AND IN THE WEST. THEY DID FALL, THOUGH, IN THE MIDWEST AND IN THE SOUTH. NOW, ON AN ANNUAL BASIS, COMPARED TO A YEAR AGO, PENDING HOME SALES, BRAD, THEY'RE DECLINING IN ALL U.S. REGIONS. >> YEAH, WE'VE GOT A COMMENT HERE FROM THE NATIONAL ECONOMIST LAWRENCE YUN SAYING - THE COMBINATION OF ECONOMIC CONDITIONS IS FAVORABLE FOR HOME-BUYING. HOWEVER, HERE, AND THIS IS THE COLD WATER, CONSUMERS SHOWING EXTRA SENSITIVITY TO CHANGES IN MORTGAGE RATES IN THE CURRENT CYCLE. POINTING THAT OUT AND HOW IT'S IMPACTING HOME SALES RIGHT NOW AND OF COURSE THERE'S A LITTLE BIT OF MODERATION IN THAT REGIONAL BREAKDOWN HERE. MIDWEST, DECREASED. YOU SAW NORTHEAST INCREASE JUST A LITTLE BIT THERE, AND THE SOUTH, DECLINED BY ABOUT 7.3%. >>> ALL RIGHT, WELL, LET'S GET A LOOK HERE AT ONE OF THE TRENDING TICKERS, AND THAT IS GOOD RX, POPPING TODAY AFTER REPORTING A FOURTH QUARTER REVENUE BEAT AND Q1 AND FULL-YEAR GUIDANCE THAT BEAT THE STREET'S EXPECTATIONS. NOW, THE TELEHEALTH PLATFORM ALSO ANNOUNCING A NEW BUYBACK PROGRAM OF UP TO $450 MILLION IN COMMON STOCK. YAHOO! FINANCE'S ANJALEE KHEMLANI JOINING US NOW WITH THE CEO OF GOODRX. >> THAT'S RIGHT. WE HAVE WITH US SCOTT WAGNER, CEO OF GOODRX. THANK YOU SO MUCH FOR JOINING US TODAY. REALLY A STRONG QUARTER AND A STRONG FULL-YEAR EARNINGS, UP $750 MILLION FOR THE YEAR. THAT'S PRETTY GOOD. YOU'RE ON YOUR WAY TO A BILLION THERE, SLOWLY BUT SURELY. BUT DESPITE THAT REVENUE GROWTH, YOU STILL REPORTED NET LOSS, AND THAT IS, OF COURSE, WHERE THE MIXED EARNINGS COMES IN, DESPITE THIS BEAT AND THE INVESTOR SORT OF OPTIMISM THERE. WHAT CAN YOU TELL US ABOUT THE BALANCE OF BOTH? >> ANJALEE, THANKS FOR HAVING ME. IT'S GREAT TO BE WITH YOU. FIRST, I AND WE WERE REALLY PLEASED WITH THE RESULTS. REVENUE WAS UP 7%. EBITDA WAS UP 15%. AND IMPORTANTLY, THE BUSINESS IS CASH FLOW POSITIVE, SO WE MAKE MONEY, AND ALL THOSE FINANCIAL MEASURES ARE GOING IN THE RIGHT DIRECTION. AND THE BEST THING ABOUT ALL THAT IS THEY'RE REFLECTIVE OF THE WORK WE'VE BEEN DOING OVER THE LAST YEAR TO CONTINUE TO FULFILL OUR MISSION, WHICH IS TO PROVIDE AMERICANS WITH PRESCRIPTION MEDICATION THAT THEY CAN AFFORD. YOU KNOW, A BILLION PRESCRIPTIONS A YEAR. THAT'S A BILLION WITH A "B." THEY GET LEFT AT THE PHARMACY COUNTER DUE TO PRICE, AND GOODRX IS REALLY THE WAY THAT PEOPLE CAN GET ACCESS TO METD OCCASION THEY NEED AT A PRICE THEY CAN AFFORD. >> THAT'S RIGHT. AND TALK TO ME ABOUT THE OUTLOOK. THERE WERE SOME HITS THAT YOU OOK TOWARDS THE END OF LAST YEAR, RESULTING IN THAT NET LOSS. WHAT ARE YOU LOOKING AT FOR THE UPCOMING YEAR TO REGAIN SOME OF THAT MOMENTUM? >> WELL, I THINK THE NICE THING, AND I WOULD SAY IT AS CONTINUE THE MOMENTUM THAT WE'RE ACTUALLY ON. AND WE'RE REALLY DOING THREE THINGS RIGHT NOW FOR THE COMPANY. THE FIRST OF WHICH IS, WORKING WITH OUR RETAIL PHARMACY PARTNERS. WALGREENS, CVS, WALMART, ET CETERA, TO HELP THEM MANAGE THEIR OWN CATEGORY. ONE GOOD EXAMPLE OF THAT IS WALGREENS IN THE FOURTH QUARTER DURING COLD AND FLU SEASON, WE TOOK A BASKET OF COLD AND FLU MEDICATION AND TOGETHER WITH WALGREENS DELIVERED 40 TO 50% SAVINGS ON THIS BASKET OF DRUGS, MERCHANDISED THEM, AND GUESS WHAT? WALGREENS GOT A TON OF INCREMENTAL ACTIVITY AND TRAFFIC. THEME ONE IS WORKING WITH OUR RETAIL PHARMACY PARTNERS TO CONTINUE TO MANAGE THEIR CATEGORY. THE SECOND THING, AND THIS IS INTERESTING AND HAS, I THINK, A LOT OF RUNWAY TO IT. HAVING THE GOODRX BENEFIT WORK WITH INSURANCE. THE PRODUCT IS CALLED INTEGRATED SAVINGS, AND WITH A COUPLE OF PHARMACY -- PBM PARTNERS, WHEN YOU DELIVER YOUR INSURANCE CARD TO THE PHARMACY COUNTER, YOU CHECK YOUR INSURANCE CO-PAY PRICE AND THE GOODRX BENEFIT, AND YOU AUTOMATICALLY GET THE LOWEST PRICE. THERE'S A HUGE AMOUNT OF TRAJECTORY THERE IN BRINGING WHAT'S A BENEFIT OF GOODRX AGAINST TRADITIONAL INSURANCE THAT WE THINK HAS A LOT OF RUNWAY. AND THE THIRD THING WE'RE DOING IS WORKING WITH BRAND MEDICATION TO DELIVER GOODRX SAVINGS AT THE POINT OF SALE, ALL OF WHICH HAVE A TON OF OPPORTUNITY. >> ABSOLUTELY. THE SAVINGS PROGRAM, AN INTERESTING WAY TO SORT OF INTEGRATE AND MAKE IT LESS PAINFUL FOR THE CONSUMER TO HAVE TO DO ALL THE LEGWORK THERE. GREAT BUY-IN. AND AT A TIME WHERE WE KNOW THAT PHARMACIES ARE SORT OF HURTING WHEN IT COMES TO SALES OF PRESCRIPTIONS PUSHING INTO MAIL ORDER AND THE LIKE. TALK TO ME ABOUT HOW YOU THINK ABOUT THE TECHNOLOGY OVERLAY ON THAT AND IN A WORLD WHERE WE'RE TALKING ABOUT A.I. AND HOW THE COMPANY IS LOOKING AT SORT OF THIS RUSH OF INNOVATION RIGHT NOW. >> YEAH. THANK YOU. THAT'S A GREAT QUESTION. I THINK THE FIRST PART OF IT IS, WE'RE WORKING REALLY CLOSELY WITH AND FOR NOT JUST OUR RETAIL PHARMACY COUNTER PARTNERS BUT THE INDUSTRY IN GENERAL TO REALLY ADD TECH BENEFIT TO THE FLOW OF A PRESCRIPTION, WHICH IS ALL DESIGNED AROUND PEOPLE, PATIENTS, WHICH, HOW DO I NOT ONLY GET THAT PRESCRIPTION MEDICATION BUT HAVE THE RIGHT POINT OF AFFORDABILITY? SO, THERE'S CONNECTION FROM YOUR DOCTOR'S OFFICE TO THE FLOW OF THE SCRIPT TO YOUR, FRANKLY, INSURANCE PLAN TO RETAIL THAT'S ONE OF THE BIG THINGS AND BIG ADVANTAGES THAT WE PROVIDE. RELATIVE TO A.I., THERE'S A HECK OF A LOT OF IMMEDIATE OPPORTUNITY IN THAT PRICING BENEFIT THAT WE'RE ALREADY WORKING ON AND LEADING THE INDUSTRY ON, AND KIND OF LIKE WHAT TOM SIEBEL JUST SAID A FEW MINUTES AGO, THERE'S A LOT OF RUNWAY HERE, AND WE'RE KIND OF AT THE FOREFRONT OF HEALTH CARE PRICING, PARTICULARLY, TO ALLOW THAT BENEFIT TO WORK ITS WAY INTO THE HANDS OF PEOPLE. >> YEAH. ONE OF THE THINGS THAT GOODRX HAS DONE OVER THE YEARS IS HAVE THESE PARTNERSHIPS WITH DIFFERENT PROVIDERS, DIFFERENT PHARMACIES. I WONDER NOW THAT YOU'RE WORKING AS A TECH PLATFORM, HOW THAT CHANGES THE POTENTIAL UP-AND-DOWNS THAT YOU SEE WITH LOSS OF CONTRACTS AND NOW THAT YOU'RE INTEGRATED, HOW THAT CHANGES THE POTENTIAL RUNWAY FOR THE COMPANY. >> YEAH, THANKS. I THINK WHAT THAT REFLECTS IS HAVING A RELATIONSHIP WITH WALGREENS, CVS, WALMART, NOT JUST BE BASED ON A CONTRACT, WHICH IS, HERE'S CERTAIN PRICE POINTS OF DRUGS, BUT MORE IMPORTANTLY, HOW WE CAN MANAGE THAT ON A REALTIME BASIS TO HAVE A RETAIL PHARMACY LIKE MY WALGREENS EXAMPLE EARLIER ON COLD AND FLU REACH A BUNCH OF GOALS. AND SO, I WOULD SAY WE ARE AT THE VERY EARLY DAYS OF BEING FLUID, FAST, AND FLEXIBLE TO WORK WITH RETAILERS TO PROVIDE BENEFIT TO THEIR CUSTOMERS. >> SCERTAINLY A GOOD TIME TO BE IN ON DATA COLLECTION AND DATA PROCESSING. GOODRX CEO SCOTT WAGNER, THANK YOU SO MUCH FOR JOINING TODAY. >> THANKS FOR HAVING ME. REALLY APPRECIATE IT. >> AND THANKS SO MUCH TO OUR OWN ANJALEE KHEMLANI FOR BRINGING US THAT CONVERSATION. >>> SHIFTING GEARS HERE, LET'S GO TO THE CLOUD. CLOUD SOFTWARE COMPANY IS SEEING ITS SHARES CLIMB TODAY AFTER RAISING ITS FULL-YEAR GUIDANCE AND REPORTING GAP OPERATING PROFITABILITY FOR THE FIRST TIME IN ITS SECOND QUARTER. FOR MORE ON THIS, WE'VE GOT RAJIV RAMASWAMY, THE CEO, BACK WITH US HERE ON YAHOO! FINANCE. ALWAYS A PLEASURE TO GRAB SOME OF YOUR TIME HERE ON THE DAY. INVESTORS REWARDING THIS PARTICULAR QUARTERLY PERFORMANCE HERE. WHAT DO YOU THINK WAS ONE OF THE LARGEST CATALYSTS THAT REALLY STICKS OUT, AND DOES THAT CONTINUE TO HAVE SOME LEGS GOING INTO THE REST OF THE YEAR? >> YEAH, I THINK THREE FACTORS GROW OUR OUTPERFORMANCE, AND FIRST OF ALL, WE ARE PROUD THIS IS THE SECOND QUARTER IN A ROW WE'RE DOING THIS. FIRST, WE HAVE A STRONG AND GROWING BASE OF HAPPY CUSTOMERS WHO WANT TO CONTINUE TO DO BUSINESS WITH US AND EXPAND. WE'VE BEEN DISCIPLINED ABOUT OUR OPERATING COSTS AND CONTROLLING THEM CAREFULLY, AND THIS COMBINATIONS THAT LED US TO RAISE OUR FREE CASH FLOW GUIDE AS WELL AS OUR TOP LINE GUIDE FOR THE YEAR. AND THIRD, FROM A DEMAND ENVIRONMENT PERSPECTIVE, THERE'S A COUPLE OF THINGS HAPPENING. FIRST, COMPANIES ARE NOW OPERATING MORE AND MORE IN A WORLD THAT'S HYBRID MULTICLUB. APPS AND DATA ARE EVERYWHERE AND THEY NEED A PLATFORM LIKE OURS TO MANAGE THE COMPLEXITY AROUND THEIR APPLICATIONS, AS IS CRITICAL TO THEIR BUSINESS. AND OUR BIGGEST COMPETITOR, VMWARE, JUST GOT BOUGHT BY BROADCOM AND THAT'S CREATING CONCERN AMONG OUR CUSTOMERS AND WE ARE STARTING TO BENEFIT FROM THAT FALLOUT. >> RAJIV, IF YOU COULD TALK A LITTLE BIT MORE ABOUT THAT, YOU MENTIONED THE ACTIONS OF BROADCOM, HOW THAT'S CREATED A SIGNIFICANT MULTIYEAR OPPORTUNITY. WALK ME THROUGH WHAT THAT OPPORTUNITY LOOKS LIKE IN TERMS OF NEW CUSTOMERS AND IN TERMS OF WINNING EVEN MORE MARKET SHARE. >> I MEAN, CLEARLY, I THINK POST THE ACQUISITION, CUSTOMERS ARE EXPECTING HIGHER PRICE RATES. THEY'RE SEEING CHANNEL PARTNERS BEING DISRUPTED. IN CUSTOMERS HAVE BEEN ENGAGING WITH US TO FIGURE OUT HOW THEY CAN REDUCE THEIR DEPENDENCE, AND WE ARE PERHAPS A THE SIMPLEST AND EASIEST ALTERNATIVE FOR COMPANIES LOOKING TO REDUCE THEIR DEPENDENCE ON VMWARE. SO, WE HAVE HAD LOTS OF CONVERSATIONS WITH MORE, MORE CUSTOMERS WHO WEREN'T PRIOR CUSTOMERS BEFORE. AT THE SAME TIME, THIS IS A LONG-TERM MULTIYEAR OPPORTUNITY. MANY COMPANIES SIGN MULTIYEAR DEALS WITH VMWARE JUST BEFORE THE ACQUISITION CLOSED AND THEN AN INFRASTRUCTURE MODERNIZATION EFFORT AND MIGRATION EFFORT DOES TAKE TIME. IT'S NOT JUST OVERNIGHT. SOMETIMES IT'S HARDWARE REFRESH CYCLES ASSOCIATED WITH IT. AND ALSO, THERE'S A LAND AND EXPAND MOTION FOR US. COMPANIES WILL START BY MAKING A SMALL INVESTMENT IN OUR PLATFORM, AND THEY WILL GROW OVER TIME. FOR ALL THESE REASONS, IT'S A LONG-TERM, MULTIYEAR OPPORTUNITY THAT WE SEE HERE AND ARE GOING TO -- ARE BENEFITTING FROM. >> SIGNIFICANT JUMP HERE THAT WE SAW YEAR OVER YEAR IN FREE CASH FLOW. AS YOU KIND OF MODEL OUT EVEN FURTHER INTO THE REST OF THIS YEAR, WHERE DO YOU CONTINUE TO REINVEST SOME OF THAT CASH BACK INTO THE BUSINESS FOR FURTHER GROWTH? >> YEAH, WE ARE CONTINUING TO INVEST. IN FACT, FOR MANY YEARS, WE WERE HOLDING OUR OPEX VERY FLAT, BUT THIS IS A YEAR WE ARE INVESTING, AND WE'RE INVESTING VERY PRUDENTLY. WE'RE INVESTING IN R&D EFFORTS, AND WE'RE INVESTING IN SALES AND GO TO MARKET TO CAPITALIZE ON THIS OPPORTUNITY FROM A DEMAND PERSPECTIVE. BOTH OF THOSE, WE ARE PUTTING MONEY BACK INTO THE BUSINESS AND WE ARE STILL VERY MUCH FOCUSED ON ACHIEVING BOTH LONG-TERM GROWTH AND SUSTAINED FREE CASH FLOW GENERATON. >> RAJIV, WHAT ARE YOU SEEING IN TERMS OF THAT DEMAND? BREAK IT DOWN EVEN FURTHER FOR US, WHETHER IT'S ON A REGIONAL BASIS, WHETHER IT'S EVEN WITHIN THE U.S. WHERE ARE YOU SEEING THAT DEMAND COMING FROM? AND I GUESS, HOW IS THAT THEN IMPACTING YOUR STRATEGY THEN GOING FORWARD? >> I THINK THE DEMAND IS VERY BROAD BASED. IT'S NOT SPECIFIC TO A PARTICULAR REGION WE OPERATE GLOBALLY ACROSS ALL THEATERS HERE, U.S. AND ASIA PACIFIC, AND IT'S VERY BROAD BASED. IT'S MORE FUNDAMENTALLY DRIVEN BY THE FACT THAT EVERY COMPANY HOW THE THERE IS GOING DIGITAL. AND AS THEY GO DIGITAL, IT'S MODERN APPLICATIONS THAT THEY HAVE TO GO BUILD, AND THEY NEED A MODEL PLATFORM TO RUN THOSE APPLICATIONS. AND THOSE APPLICATIONS AND ALL RIGHT DATA THEY NEED AND CONSUME AND GENERATE ARE EVERYWHERE. THEY'RE RUNNING THIS IN THE PUBLIC SOME. THEY'RE RUNNING IT IN THEIR DATACENTERS, AND EVEN I YOU LOOK AT SOME OF THE MOST MODERN NEW THINGS THEY'RE DOING WITH GENERATIVE A.I., IT'S THE SAME STORY. STARTING OUT PERHAPS IN THE PUBLIC CLOUD BUT REALLY RUNNING WHERE THE DATA IS, WHICH IS, YOU KNOW, ON PREM OVER TIME AND ALSO IN THE EDGE AND MOVING TO INFERENCING. THESE TYPES OF FACTORS ARE FUNDAMENTALLY DRIVING AN INVESTMENT CYCLE FOR OUR CUSTOMERS IN TERMS OF MODERNIZING THEIR INFRASTRUCTURE, AND THAT'S WHAT WE ARE SEEING IN TERMS OF THE BENEFIT TO OUR PLATFORM. >> AND SO, DOES A.I. THEN, IN THAT CASE, JUST CREATE ONE MORE CLOUD WITHIN THIS BROADER KIND OF MULTICLOUD ECOSYSTEM THAT A LOT OF COMPANIES ARE OPERATNG ON TOP OF AND TRYING TO CONNECT ALL THOSE DATA PIECES? HOW DOES THAT AND CONNECTING THAT ADDITIONAL A.I. OR GENERATIVE A.I. INFERENTIAL CLOUD TRANSLATE INTO MONETIZATION FOR YOUR BUSINESS? >> IN FACT, WHERE WE COME INTO PLAY WITH RESPECT TO RUNNING A.I. IS THAT A.I. NEEDS TO RUN WHERE THE DATA IS. AND DATA IS EVERYWHERE. SOME OF IT IS SITTING INSIDE CUSTOMER DATACENTERS. IN FACT, THE MOST PRECIOUS DATA USUALLY SITS THERE. AND THEN THERE'S A LOT OF DATA BEING GENERATED AT THE EDGE THAT NEEDS TO BE ANALYZED AND YOU NEED TO DRIVE INFERENCE. SO, COMPANIES NEED SIMPLE SOLUTIONS TO RUN THESE A.I. WORKLOADS AND THAT'S WHAT WE PROVIDE WITH OUR GPT IN A BOX AS WE CALL IT, AND IT'S STILL VERY EARLY DAYS. MANY OF OUR COMPANIES ARE STILL EXPERIMENTING WITH GENERATIVE A.I., ALTHOUGH THERE ARE TRADITIONAL A.I. WORKLOADS, AND SO WE LOOK AT THE COMPANIES TRYING TO BECOME MORE EFFICIENT, DRIVE MORE PRODUCTIVITY FOR THEIR PEOPLE, AND WE THINK THIS IS ANOTHER LONG-TERM PLAN THAT'S VERY EARLY DAYS. >> RAJIV RAMASWAMI, THANK YOU SO MUCH FOR JOINING US ON YOUR EARNINGS REPORT. CEO OF NUTANIX. THANKS. >> THANK YOU, BRAD AND SEANA. >>> WEIGHT WATCHERS INTERNATIONAL SHARES ARE PLUNGING OFF NEARLY 24% AFTER ANNOUNCING THAT OPRAH WILL NO LONGER SERVE ON ITS BOARD. SHE HAS BEEN SERVING ON THE COMPANY'S BOARD SINCE 2015. WEIGHT WATCHERS ALSO REPORTING ITS MOST RECENT EARNINGS REPORT, FORECASTING FULL-YEAR REVENUE THAT FELL BELOW THE STREET'S EXPECTATIONS. THERE IS SOME CONCERN ABOUT THE POPULARITY OF GLP-1s AND EXACTLY WHAT THE POPULARITY OF WEIGHT LOSS DRUGS IS GOING TO DO FOR A NAME LIKE WEIGHT WATCHERS, BUT DIGGING INTO THOSE NUMBERS, WE HAVE REVENUE DOWN 8% FROM A YEAR AGO, SUBSCRIBER NUMBERS WERE DOWN 5% FROM JUST THE PREVIOUS QUARTER, FALLING TO 3.8 MILLION, SO YOU HAVE THE EXIT OF OPRAH. YOU HAVE THE FACT THAT SALES ARE UNDER PRESSURE, NOT AS MANY PEOPLE ARE SIGNING UP FOR WEIGHT WATCHERS. THAT ALL BEGS THE QUESTION AS TO THE IMPACT THAT THE POPULAR WEIGHT LOSS DRUGS HAS ON WEIGHT WATCHERS AND WHAT THEY NEED TO DO TO OFFSET SOME OF THOSE HEADWINDS. >> YEAH. I MEAN, HER MEDIA HIGHNESS, OPRAH, HAD ALSO EVEN ADMITTED OR PUBLICLY DISCLOSED THAT SHE USES SOME WEIGHT-LOSS MEDICATIONS AT THE TAIL END OF 2023. THAT NEWS CAME OUT. SO, ULTIMATELY, IT IS ONE OF AND AS YOU SO RIGHTLY LAID OUT, IT IS PERHAPS ONE OF THE LARGEST CONSIDERATIONS THAT A WEIGHT WATCHERS HAS TO THINK ABOUT IN TERMS OF THE NUMBER OF PEOPLE THAT ARE CHOOSING OTHER OPTIONS RATHER THAN A WEIGHT WATCHERS LONG FORM PROGRAM. HOWEVER, WITHIN THIS ANNOUNCEMENT AS WELL, THEY DID NOTE, SPECIFICALLY, THAT SHE HAS BEEN AN INSPIRING PRESENCE FOR WEIGHT WATCHERS INTERNATIONAL, PASSIONATE ADVOCATE FOR THE MEMBERS, CRITICAL INSIGHTS, COUNSEL THAT'S HELPED SHAPE WEIGHT WATCHERS OEVER THE LAST EIGHT YEARS AS WELL. IT'S HARD TO REMEMBER THAT THIS BRAND, PRIOR TO OPRAH, I MEAN, BECAUSE OPRAH REALLY WAS THAT MIDAS TOUCH ON TOP OF SO MANY BUSINESSES, WEIGHT WATCHERS WAS ANOTHER ONE FOR AN EXTENDED PERIOD OF TIME, BUT THEN, THERE ARE SOME OTHER BROADER MARKET FACTORS THAT CERTAINLY DO FACTOR IN AS HEADWINDS FOR THE WEIGHT WATCHERS BUSINESS, AND WE'LL HAVE TO SEE HOW THEY NAVIGATE THAT. >>> KEEP IT ON YAHOO! FINANCE. COMING UP, SHARES OF C ARRH HITG A RECORD HIGH. WE'RE GOING TO TAKE A DEEP DIVE WITH THE COMPANY'S CEO. UH >>> >>> SHARES OF BUILDING COMPANY CRH HITTING A RECORD HIGH THIS MORNING. THE COMPANY REPORTING ITS FULL-YEAR EARNINGS RESULTS. THEY WERE DRIVEN BY DEMAND FOR CONSTRUCTION PROJECTS, ALSO IMPROVED PRICING STRATEGIES, HELPING TO LIFT THEIR MOST RECENT NUMBERS. FOR MORE, WE WANT TO BRING IN THE CEO OF CRH. WE HAVE ALBERT MANIFOLD JOINING THE CONVERSATION. IT'S GREAT TO HAVE YOU HERE. I WANT TO START WITH INFLATIONARY COSTS. IT WAS ONE OF THE THINGS THAT WAS POINTED OUT WITHIN YOUR REPORT HERE, SAYING DESPITE THE CONTINUED INFLATIONARY COST PRESSURES THROUGHOUT THE YEAR, YOU WERE ABLE TO EXPAND YOUR MARGINS AND DELIVER FURTHER GROWTH AND PROFITS. HOW? HOW ARE YOU NAVIGATING THE VERY PERSISTENT INFLATIONARY ENVIRONMENT RIGHT NOW, AND WHAT DOES THAT MEAN FOR YOUR BUSINESS MT. LO IN THE LONG RUN? >> THANK YOU FOR TAKING TIME TO TALK TO US THIS MORNING. WE ANNOUNCED OUR RESULTS THIS MORNING, AND THE REACTION ON THE STOCK MARKET IS A REACTION TO A VERY STRONG SET OF RESULTS WITH REVENUES AHEAD BY 7%, EBITDA AHEAD 15%, AND EPS AHEAD BY 30%. THAT'S OUR TENTH CONSECUTIVE YEAR OF BOTH PROFIT AND MARGIN GROWTH, SO THE BUSINESS IS REALLY HUMMING. WITH REGARD TO YOUR COMMENT ON INFLATIONARY COSTS, OUR BUSINESS REALLY IS A BUSINESS THAT ACTUALLY PROVIDES MORE COMPLEX CONSTRUCTION SOLUTIONS RATHER THAN COMMODITY PRODUCTS, SO WE'RE ALWAYS WORKING ON INCREASING THE VALUE WE GIVE TO OUR CUSTOMERS, WE SERVE OUR CUSTOMERS WITH. WE DON'T JUST PROVIDE BASIC COMMODITY PRODUCTS. WE ACTUALLY TURN THOSE BASIC MATERIALS INTO COMPLEX CONSTRUCTION SOLUTIONS SO WE GET PAID FOR THE VALUE AND THAT'S HOW WE'VE BEEN ABLE TO DRIVE THE VALUE LAST YEAR AND INDEED FOR THE NINE PREVIOUS YEARS. >> HOW MANY OF THOSE COMPLEX CONSTRUCTION SOLUTIONS ARE WAITING FOR INTEREST RATES TO BE MORE FAVORABLE TO BEGIN SOME OF THOSE PROJECTS? >> WELL, ACTUALLY, ABOUT 50% OF OUR TOTAL ACTIVITY HERE IN THE U.S. IS INFRASTRUCTURE SPENDING, WHICH IS BOTH FEDERALLY AND STATE-FUNDED, AND AS YOU KNOW, THE INFRASTRUCTURE HAS BEEN LONG UNDERINVESTED HERE FOR MANY YEARS AND IN RECENT YEARS, THERE'S BEEN BIPARTISAN SUPPORT FOR LONG-TERM INFRASTRUCTURE SPENDING TO UPGRADE THE INFRASTRUCTURE, WHICH IS NECESSARY FOR THE ECONOMY. THAT'S NOT REALLY EXPOSED TO INTEREST RATE EXPOSURE, NOR, INDEED, THE SECOND LARGEST PART OF OUR BUSINESSES, WHICH IS FOR NONRESIDENTIAL CONSTRUCTION. THAT MAKES UP ABOUT 25%. THOSE TWO AREAS ARE 75% OF OUR TOTAL CONSTRUCTION DEMAND, AND THOSE -- THAT NONRESIDENTIAL CONSTRUCTION REALLY IS A REAL POSITIVE FOR THE U.S. ECONOMY BECAUSE WHAT WE'RE SEEING IS THE RESHORING AND ON-SHORING OF CRITICAL MANUFACTURING TECHNIQUES BACK HERE TO THE U.S. SOME OF THE LARGEST COMPANIES IN THE WORLD. CHIP MANUFACTURING, DATA PROCESSING CENTERS, IN TERMS OF THE BIOTECHNOLOGY PHARMACEUTICALS, ELECTRIC VEHICLES, ELECTRIC BATTERIES, ALL OF THAT COMING BACK TO THE U.S., AND THOSE PROJECTS ARE MULTIYEAR PROJECTS, SO AGAIN, NEITHER OF THOSE TWO BUSINESSES ARE EXPOSED TO INTEREST RATES. RESIDENTIAL IS. RESIDENTIAL HAS BEEN VERY SLOW, BUT THAT'S THE SMALLEST PART OF OUR BUSINESS, BUT EVEN AS OUR BUSINESS IS ONLY FIRING ON TWO OF THREE CYLINDERS, WE'VE BEEN ABLE TO PRODUCE THE RESULTS WE'VE BEEN ANSWERING THIS MORNING. >> REAL QUICK, I KNOW YOU SAID RESIDENTIAL IS A SMALL PART OF YOUR BUSINESS, BUT I'M CURIOUS WHAT YOU'RE SEEING THERE. IT HAS BEEN ONE OF THE FACTORS THAT HAS WEIGHED DOWN THE OVERALL PERFORMANCE JUST A BIT. WHEN DO YOU EXPECT TO SEE THAT REBOUND? >> I THINK THE SLOWDOWN IN RESIDENTIAL, SUBDUED NATURE OF RESIDENTIAL, IS AN AFFORDABILITY ISSUE. DEMAND IS VERY SIGNIFICANT. THE U.S. HAS GOT AN UNDERBUILD OF 5 MILLION HOMES AS OF THIS MORNING. AS INTEREST RATES LOWER, YOU WILL SEE MORE AND MORE PEOPLE COME BACK INTO THE MARKET. THERE'S A NEED FOR HOUSING GOING FORWARD IN THE UNITED STATES THAT WILL STRETCH ON FOR DECADES. SO, IT'S JUST A TIMING ISSUE MORE THAN ANYTHING ELSE. THE FUNDAMENTALS ARE STILL VERY STRONG. BUT AS I SAY, EVEN WITH A VERY SUBDUED RESIDENTIAL MARKET, OUR STRENGTH IN OUR INFRASTRUCTURE MARKETS AND OUR STRENGTH IN OUR NONRESIDENTIAL MARKETS HAVE TO DELIVER THE EXCELLENT RESULTS WE SAW THIS MORNING. >> ALBERT, WHEN IT COMES TO PRICING POWER, WHO DO YOUR PRICING TRENDS LOOK LIKE, AND ARE YOU BENEFITTING FROM SOME OF THE INDUSTRY'S TAILWINDS? >> LOOK, THERE'S NO QUESTION ABOUT IT. WE ARE SEEING A GOLDEN AGE OF CONSTRUCTION. WE'RE SEEING UNPRECEDENTED FEDERAL SUPPORT FOR INFRASTRUCTURE SPEND. WE HAVEN'T SEEN ANYTHING LIKE THIS SINCE THE NEW DEAL IN THE '30s AND THAT'S GOING TO CONTINUE ON FOR THE NEXT TEN YEARS. THAT COMBINED WITH THE NONRES GROWTH I SPOKE ABOUT IS THE SUPPORT OF DEMAND. WHAT WE ARE SEEING IS A CHANGING FACE OF CONSTRUCTION. MORE AND MORE PEOPLE ARE ASKING FOR US TO CONSTRUCT IN A MORE SUSTAINABLE WAY, TO BUILD QUICKER, CHEAPER, AND FACE THE REAL CHALLENGES WE'RE FACED WITH. THERE'S A LACK OF LABOR OUT THERE, SO MORE AND MORE, WE'VE GOT TO MANUFACTURE CONSTRUCTION PRODUCTS OFF SITE AND IN FACTORIES. ALL OF THAT PLAYS TO OUR STRENGTHS IN THAT WE PROVIDE COMPLETE SOLUTIONS. WE'RE THE LARGEST ROAD BUILDER IN THE UNITED STATES, AND WE DON'T JUST SUPPLY THE ROCKS FOR THAT ROAD, WE ACTUALLY BUILD THE ROAD. WHEN A STATE DOES BUSINESS WITH US, WE TAKE IT ALL THE WAY TO THE FINISHED ROAD AND WE MAINTAIN THAT ROAD. AND PEOPLE WANT THOSE COMPLETED AND WE'RE GETTING PAID FOR THAT. >> ALBERT MANIFOLD, CRH CEO, THANK YOU SO MUCH FOR TAKING THE TIME. >> THANK YOU. >>> WELL, SHARES OF BEST BUY, RISING ON ITS LATEST QUARTERLY RESULTS. WE'LL DIG INTO THE REPORT WITH AN ANALYST ON THE OTHER SIDE OF THIS SHORT BREAK. >>> BEST BUY REPORTING FOURTH QUARTER SALES THAT WERE BETTER THAN FEARED, PROMPTING THE POSITIVE STOCK REACTION. ENTERPRISE COMPARABLE SALES DECLINED 4.9% COMPARED TO ESTIMATES OF 5.3%. THE RETAILER INCREASING ITS QUARTERLY DIVIDEND. OVERALL, THE BUSINESS OUTLOOK SEES INDUSTRY STABILIZATION SALES THIS YEAR. SEAN DUNLAP, THE MORNINGSTAR EQUITY ANALYST, IS HERE. THANK YOU SO MUCH FOR TAKING TIME THIS MORNING. I WANT TO GET YOUR READ IN ON THE REPORT AND IF THE WORST IS BEHIND BEST BUY. >> YEAH, I WOULD SAY A PRETTY DECENT EARNINGS ALL IN. IT WAS $14.65 BILLION IN SALES, WHICH EDGED CONSENSUS, ADJUSTED EARNINGS PER SHARE, $2.72. THAT'S OBVIOUSLY BETTER THAN CONSENSUS, BETTER THAN OUR OWN ESTIMATE. MORE IMPORTANTLY, AS WE LOOK FORWARD, RAISED ITS DIVIDEND, THAT'S SAFE. AND NEGATIVE 3% TO FLAT COMPARABLE STORE SALES FOR THE YEARS TO COME IS POSITIVE WITH $169 MILLION RESTRUCTURING THE FIRM IS LOOKING AT FLAT OPERATING INCOME MARGIN FOR THE YEAR TO COME, WHICH IS QUITE A BIT BETTER THAN WE'D EXPECTED AND CERTAINLY BETTER THAN YOU WOULD EXPECT GIVEN THE SALES ENVIRONMENT THAT THE FIRM STILL FINDS ITSELF IN. ON BALANCE, LOOKS LIKE WE'RE STARTING TO HIT SOME OF THOSE REPLACEMENT CYCLES FROM THE COVID PULL FORWARD. COULD BE THAT WE'RE THROUGH THE WORST OF THIS PATCH FOR BEST BUY. >> SO, IF WE'RE THROUGH THE WORST, WHEN DO YOU EXPECT TO SEE A RETURN TO GROWTH? IS THAT SOMETHING THAT YOU SEE PLAYING OUT BEFORE THE END OF THE YEAR? >> YEAH, I THINK SO. DURING THE FIRST TWO QUARTERS, I WOULD EXPECT THAT WE WOULD SEE NEGATIVE COMPARABLE STORE SALES. THE FIRM CONTINUES TO CLOSE STORES AT A 1 TO 2% ANNUAL CLIP. THEY PLAN TO CLOSE ANOTHER 10 TO 15 THIS YEAR. I THINK AS WE MOVE INTO THE BACK HALF OF THE YEAR, Q3 IS WHERE WE'RE STARTING TO PENCIL IN REAL GROWTH, AND Q4, IF WE TEASED OUT THE IMPACT, THEY HAD AN EXTRA WEEK IN THIS LAST YEAR'S Q4, BUT IF YOU TEASE THAT OUT, WE WOULD EXPECT GROWTH IN THE YEAR TO COME. >> WHICH KEY CATEGORIES ARE GING TO PROVE THAT BEST BUY CAN GET BACK TO SOME OF ITS GOLDEN DAYS, IF YOU WILL? BECAUSE FLAPPLIANCES GOT HIT HA. WE'RE LOOKING ACROSS WHERE THE CONSUMER ENVIRONMENT ACTUALLY LEADS SOME OF THE SPENDING BACK INTO THE CATEGORIES THAT WERE DISTRESSED, AT LEAST IN THIS MOST RECENT Q4 HERE. >> YEAH, IT'S A GREAT QUESTION. I THINK WE'RE GOING TO CONTINUE TO SEE PRESSURE IN CATEGORIES LIKE APPLIANCES AND HOME THEATER. THOSE HAVE LONGER REPLACEMENT CYCLES, SO IF PEOPLE BOUGHT THOSE IN 2020 OR 2021, THEY'RE NOT GOING TO NEED TO REPLACE THEM IN THE NEAR TERM. THE OTHER FACTORS, OBVIOUSLY, WE'VE SEEN QUITE A BIT OF A SLOWDOWN IN THE HOUSING MARKET AND THERE'S NATURAL REPLACEMENT THAT OCCURS WITH THAT. WE'LL PROBABLY SEE IT FIRST WITH LAPTOPS. THE GOOD NEWS IS WE'RE STARTING TO SEE THAT NOW. BEST BUY CITED POSITIVE UNIT VOLUME OVER THE MOST RECENT QUARTER. WITHIN THEIR SALES BASE, AND THERE REALLY WASN'T A REFRESH. THERE WEREN'T ANY NEW FEATURES. THERE WASN'T MUCH INNOVATIN THAT WOULD DRIVE AN UPGRADE CYCLE, SO THAT COULD BE READ INTO AS BEING A NATURAL REPLACEMENT CYCLE. I THINK WE'D SEE IT IN LAPTOPS FIRST. I THINK AS WE MOVE FORWARD, WE'LL START TO SEE IT IN PHONES, AND THEN IT WILL SPILL OVER INTO SOME OF THE OTHER CATEGORIES OVER TIME. >> SEAN, ARE WE SEEING AN INFLECTION POINT WHEN IT COMES TO LAPTOPS AND PCs? >> I THINK SO. WE'LL SEE IT AS WE MOVE INTO CALENDAR 2024. CONSUMER ELECTRONICS ARE A LITTLE BIT UNIQUE, CATEGORICALLY, SO IF I'M A CONSUMER AND I HAVE A PHONE AND I'VE OWNED IT FOR THREE YEARS, I CAN PRETTY COMFORTABLY DEFER AN UPGRADE IF I NEED TO. AND THE TROUBLE FROM AN INDUSTRY PERSPECTIVE IS THAT YOU DON'T GET THAT SALE BACK THE WAY THAT YOU WOULD IN SOME OTHER CATEGORIES. SO, IF CONSUMERS CONTINUE TO FEEL PRESSURE, THEY CAN DEFER SOME OF THESE REPLACEMENT CYCLES. I THINK WE WILL START TO SEE IT, WHAT WE'RE SEEING AN INCREASE IN REAL HOURLY EARNINGS ACROSS THE BOARD. OBVIOUSLY, THERE'S ROOM TO GO IN TERMS OF RECOVERING SAVINGS RATES. HOME STARTS ARE SLOW. INTEREST RATES REMAIN HIGH. REVOLVING CREDIT BALANCES REMAIN HIGH, BUT WE ARE CAUTIOUSLY OPTIMISTIC ABOUT THE HEALTH OF THE CONSUMER. >> AND THEN JUST LASTLY, SEAN, WE THINK ABOUT THE YEAR OF STABILIZATION, YEAR OF SALES STABILIZATION THAT THE COMPANY IS BANKING ON HERE. WHAT DOES THAT LOOK LIKE IN TERMS OF WHAT INVESTORS SHOULD EXPECT FOR THE STOCK PRICE CONTINUED TRAJECTORY? >> YEAH, I MEAN, I THINK GIVEN THE MARKET'S MOVE TODAY, OBVIOUSLY, THE STOCK IS UP 5 TO 6%. THAT BRINGS US INTO A RANGE THAT WE'D CONSIDER FAIRLY VALUED. IF YOU THINK ABOUT IT FROM THE PERSPECTIVE OF INVESTORS, YOU'RE LOOKING AT ROUGHLY A 5% DIVIDEND YIELD, YOU'RE LOOKING THE AT REPURCHASES. THAT'S PROBABLY WHAT YOU'RE LOOKING AT IN TERMS OF TOTAL SHAREHOLDER RETURN. YOU'RE NOT GOING TO SEE TONS IN THE WAY OF CAPITAL APPRECIATION FOR THE YEAR TO COME. THAT WOULD PROBABLY BE HOW I WOULD ENCOURAGE INVESTORS TO THINK ABOUT IT. >> MORNINGSTAR'S SEAN DUNLOP, APPRECIATE IT . >>> COMING UP, WHAT ARE THE TOP HOTEL STOCKS FOR 2024? WE'LL DIVE DEEP INTO THAT NEXT AS PART OF YAHOO! FINANCE'S TRAVEL GUIDE 2024 INDUSTRY INSIGHTS. >>> THE S.E.C. IS INVESTIGATING INTERNAL COMMUNICATIONS FROM SAM ALTMAN, THE CEO OF OPENAI, TO SEE WHETHER OR NOT THE COMPANY MISLED INVESTORS, ACCORDING TO A REPORT FROM THE "WALL STREET JOURNAL." THE S.E.C. ISSUED A SUBPOENA BACK IN DECEMBER FOLLOWING ACCUSATIONS FROM OPENAI'S BOARD THAT THE CEO WASN'T CONSISTENTLY CANDID IN HIS COMMUNICATIONS AND SUBSEQUENTLY FIRED AND OUSTED SAM ALTMAN FOR A TIME. A LOT OF THAT WAS OVER TRANSPARENCY QUESTIONS THERE, BUT THIS REPORT HERE FROM THE "JOURNAL" IS ALL OVER -- THEY'RE SCRUTINIZING SOME OF THOSE INTERNAL COMMUNICATIONS BY ALTMAN. THEY'RE LOOKING INTO THIS, LOOKING INTO INTERNAL RECORDS FROM CURRENT AND FORMER OFFICIALS AND DIRECTORS IN THE CHATGPT CREATOR AND ALSO JUST TRYING TO SEE WHAT EXACTLY WAS PLAYING OUT SURROUNDING THAT SHOCKING MOVE THAT PLAYED OUT AT THE END OF LAST FALL AND EXACTLY WHAT WAS KNOWN AND WHAT WAS NOT KNOWN. >> ABSOLUTELY. AND I THINK ONE OF THE HUGE THINGS AROUND THIS, AND ANY TIME YOU HAVE AN ALLEGATION COME FORWARD LIKE THIS, IT REALLY IS, AND IT KIND OF HARKENS ALMOST BACK TO AND NOT SAYING THAT THEY'RE APPLES TO APPLES HERE AT ALL OR ANYTHING THAT'S BEEN DE DETERMINED HERE, BUT ANYTHING THAT COMES OUT FROM THIS, I THINK NATURALLY ABOUT THE MISLEADING OF INVESTORS THAT TOOK PLACE WITH NIKOLA. I'M NOT SAYING THIS IS ANYWHERE NEAR IN THE SAME REALM AS THAT BECAUSE THERE ARE CLEAR ADVANCES OPENAI HAS BEEN ABLE TO PUT FORWARD, BUT NOW IT'S TIED BACK TO THE DOLLAR AMOUNT THEY WERE ABLE TO RAISE OR SEE COMPENSATION FOR DURING THE FISCAL YEAR ON THE BACK OF SOME OF THE ADVANCEMENTS THAT WERE PERHAPS PUT INTO THE MINDS OF INVESTORS WHO WERE PUTTING FUNDS INTO THE COMPANY ON A CAPITAL BASIS OR EVEN SOME OF THE CORE CLIENTS THAT THEY GO OUT TO AS CUSTOMERS AS WELL. >> YEAH, WE HAVE S.E.C. OFFICIALS HERE IN NEW YORK CONDUCTING THE INVESTIGATION. THEY'VE ALSO ASKED, LIKE WE POINTED OUT BEFORE, SOME SENIOR OPENAI OFFICIALS TO PRESERVE DOCUMENTS. THIS IS ALL ABOUT WHETHER INVESTORS WERE MISLED AND A LOT OF THAT SURROUNDING THE TEMPORARY OUST ING OF THEIR CEO. >>> LET'S ALSO TALK ABOUT SALESFORCE HERE THIS MORNING. SALESFORCE REPORTED AN EARNINGS BEAT AND ANNOUNCED ITS FIRST EVER DIVIDEND, BUT FORECASTED WEAKER THAN EXPECTED FISCAL FULL-YEAR REVENUE HERE. THE CHIEF FINANCIAL OFFICER NOTED THAT SALESFORCE WAS NOT FACTORING IN MATERIAL CONTRIBUTION FROM A.I. PRODUCTS, EXPECTING TO SEE IT IN TWO OR THREE YEARS. FOR MORE ON HOW INVESTORS CAN DISCERN THE EARLY BENEFICIARIES OF GENERATIVE A.I., LET'S BRING IN FRED, THE MACQUARIE HEAD OF U.S. A.I. SOFTWARE RESEARCH. ALWAYS A PLEASURE TO SPEAK WITH YOU, GET SOME TIME HERE. FIRST AND FOREMOST, WITH SALESFORCE AND HOW THEY'RE GOING TO BE ABLE TO SEE THIS FACTORED INTO THE FINANCIAL PERFORMANCE IN THE FUTURE, WHAT SHOULD INVESTORS EXPECT AS TO THE TIMELINE WHEN THAT WILL REALLY PASS THROUGH TO SOME OF THE MARGINS WE'RE SEEING THUS FAR? >> WITH SALESFORCE, FIRSTLY, I THINK WE SAW THAT THE COMPANY IS ONCE AGAIN COMMITTED TO DELIVERING MARGIN, DELIVERING PROFITABILITY, AND DOING ALL THE THINGS THAT WE BELIEVE ARE REALLY CRITICAL FOR THE STORY AS A PROFITABLE GROWTH STORY. ONE THAT IS PRUDENT ABOUT INVESTMENTS AND COSTS. WE'RE VERY EXCITED ABOUT GENERATIVE A.I., WHERE THAT'S GOING TO GO AND HOW SALESFORCE CAN BENEFIT FROM IT, BUT WE THINK THE RAMP-UP TO MATERIAL CONTRIBUTION TO REVENUE WILL TAKE A BIT OF TIME, AND THIS IS CONSISTENT ACROSS ALL OF OUR COVERAGE. WE THINK THAT GENERALLY, ENTERPRISE ADOPTION OF GENERATIVE A.I. SOFTWARE WILL BEGIN TO TAKE OFF IN 2024, BUT THEN, BRAD, FURTHER INTO 2025, AND IN 2026. OUR BASE CASE HERE IS GENERALLY THAT ENTERPRISES ARE BEGINNING WITH TESTING GENERATIVE A.I. SOFTWARE. THEY'RE NOT NECESSARILY GOING TO DEPLOY IT EVERYWHERE AT ONCE AND LET CUSTOMERS AND THEIR EMPLOYEES JUST USE IT IMMEDIATELY. RATHER, THEY WANT TO BE CAREFUL AND TAKE THEIR TIME ON ENSURING THAT GENERATIVE A.I. PRODUCTS ARE BOTH SAFE, RELIABLE, AND RESPONDING AS ONE WOULD EXPECT AND ONE NORMALLY WOULD GET FROM AN EMPLOYEE OF THEIR OWN COMPANY, SO I THINK IT'S EXTREMELY EXCITING, BUT WE'RE GOING TO BE PATIENT ABOUT WHERE AND WHEN REVENUES APPEAR FROM A.I. AND SALESFORCE'S MODEL. >> FRED, ONE OF THE BIG HEADLINES OUT OF THIS PRINT WAS THE FACT THAT THE COMPANY DECLARED A DIVIDEND HERE FOLLOWING IN THE FOOTSTEPS OF META. I'M CURIOUS FROM YOUR ANALYST PERSPECTIVE, WHAT THAT TELLS US ABOUT THE CONFIDENCE WITHIN MANAGEMENT ABOUT THE FUTURE FINANCIAL SUCCESS OF SALESFORCE AND HOW BIG OF A BOOST YOU SEE THIS BEING IN THE LONG RUN. >> SO, WITH THE ADDITION OF A DIVIDEND HERE AND THE COMPANY ALSO CONSISTENTLY RETURNING CAPITAL TO INVESTORS THROUGH BUYBACKS, WHAT WE'RE SEEING IS THAT WE BELIEVE SALESFORCE HERE IS REALLY SHOWING THEIR DEDICATION TO DEPLOYING THEIR CASH FLOWS IN WAYS THAT ARE REWARDING INVESTORS AND THEIR CONFIDENCE IN SALESFORCE. AND SO, WHERE THE COMPANY IS FOCUSING AGAIN ON PROFITABILITY AND CASH FLOWS, AND GROWING THOSE CASH FLOWS NICELY, NORTH OF 20% YEAR OVER YEAR IN 2025, FISCAL '25, THEY SEE THIS AS AN OPPORTUNITY TO RETURN MORE CASH TO SHAREHOLDERS. AND I THINK THAT IT ADDS TO A VERY -- IT ADDS A VERY NICE ASPECT TO THIS STORY, THAT YOU CAN FOLLOW ALONG FOR THE GROWTH, FOR THE UPSIDE FROM A.I., BUT YOU'RE ALSO BEING REWARDED WITH BOTH MORE MARGIN, MORE PROFITABILITY, MORE CASH FLOWS, AND AT THE END OF THE DAY, MORE CASH BEING RETURNED TO INVESTORS. >> YOU KNOW, I WANT TO GO FURTHER DOWN THAT LINE HERE, BECAUSE AS WE THINK ABOUT WHERE COMPANIES AND COMPANIES LIKE SALESFORCE, COMPANIES LIKE MICROSOFT, GOOGLE, ARE PUTTING THEIR A.I. PRODUCTS OR SOLUTIONS OUT INTO THE MARKET AND SEEING WHERE SOME OF THEIR CLIENTS HOP ON WHAT THE GENERATIVE A.I. PROMPT EXPERIENCE CAN LOOK LIKE THAT CREATES AN OUTPUT AND ULTIMATELY CREATES THESE COPILOTS THAT COME TO BE EXPECTED WITHIN THE WORKFORCE, WHO IS WINNING THE BATTLE OF THE COPILOT RIGHT NOW? THAT IT REMAINS AN OPEN FIELD.- I THINK IN TERMS OF THE TECHNOLOGY, OPENAI STILL APPEARS TO BE IN A POSITION WHERE THEY'RE SERCHVING THE BEST MODE. MICROSOFT, WE THINK, IS LEADING THE CHARGE WITH PRODUCTIZING THESE AS COPILOTS AND DELIVERING THEM TO ENTERPRISES, BUT OVERALL, I THINK WE'VE ALSO SEEN RECENTLY WITH HOW GEMINI HAS BEEN IN THE NEWS AND RESPONDING O PROMPTS WITH OUTPUTS THAT MANY HAVE BEGUN CRITICIZING RECENTLY, I THINK THAT IT REALLY SHOWS -- THE GEMINI RESPONSES, FOR EXAMPLE, SHOWS HOW BUSINESSES ARE LIKELY TO BE VERY CAREFUL WITH HOW THEY'RE ADOPTING A.I., BECAUSE THEY NEED TO ENSURE THAT THE OUTPUT COMING OUT ACCURATELY REFLECTS WHAT THEIR BUSINESSES ARE SAYING, DOING, AND THEIR DATA, THEIR POSITIONING, ET CETERA. SO, I THINK THAT IN THIS TESTING PHASE, WE'RE VERY EARLY DAYS. I THINK THAT MICROSOFT, SALESFORCE, AND THE LIKE, BUT MICROSOFT ESPECIALLY, IS THE FURTHEST ALONG HERE AND IS WINNING PRESENTLY THE COPILOT DEBATE, BUT NEVERTHELESS, IT'S EXTREMELY EARLY DAYS, AND WE THINK IT'S AN OPEN FIELD FOR COMPETITION. >> ALL RIGHT, FRED OF MACQUARIE, HEAD OF U.S. A.I. SOFTWARE RESEARCH, THANKS. >> THANK YOU. >>> KEEP IT RIGHT HERE ON YAHOO! FINANCE. MUCH MORE OF YOUR MARKET ACTION AHEAD. WE'LL BE RIGHT BACK. ♪ >>> HOSPITALITY STOCKS HAD A GREAT YEAR IN 2023, THANKS TO A BOOM IN INTERNATIONAL TRAVEL REBOUNDING. BUT CAN THEY OUTPACE THE S&P 500 IN THE MONTHS TO COME? IS THERE A NEXT VACATION ACCOMMODATION IN A MARRIOTT OR AN AIRBNB? WHICH GIVES YOU THE BEST BANG FOR YOUR BUCK? WE'LL LOOK AT REVPAR, DISCUSS DEMAND IN CHINA, AND ASK IF THE POST-PANDEMIC LEISURE BOOM IS SET TO HOLD UP? YAHOO! FINANCE'S TRAVEL GUIDE 2024 INDUSTRY INSIGHTS ASKS THE QUESTIONS YOU NEED ANSWERS TO. >>> DO YOU EVEN REVPAR? HOW CAN WE PLAY THE HOSPITALITY TRADE? JOINING US NOW AS PART OF YAHOO! FINANCE'S TRAVEL GUIDE 2024, OUR VERY OWN EXECUTIVE EDITOR BRIAN SOZZI. >> WHEN IT COMES TO MAKING MONEY IN THE BIGGEST HOTEL NAMES IN 2023, IT WAS A RELATIVELY EASY ENDEAVOR. RIDE MOST ALL OF THE STOCKS BACK. HOWEVER, IN RECENT WEEKS, WE HAVE GOTTEN NEW WHERE I THINK A WRINKLES TO INVESTING. TAKE A LISTEN TO WHAT EXPEDIA'S CEO TOLD US ABOUT CURRENT DEMAND TRENDS. >> THE MARKETS ARE SLOWING A BIT. THE TRAVEL MARKETS. IT'S STILL GROWING, BUT THE POST-COVID THING IS SLOWING DOWN A BIT. THE ACCELERATION IS LOWER. REALLY, ASIA AND LATIN AMERICA HAVE BEEN DRIVING THIS MORE THAN ANYTHING AND THAT'S ALL SLOWING DOWN. IT'S REALLY JUST A DECEL OF THE WHOLE GLOBE BACK TO SORT OF MORE NORMAL POST-COVID LEVELS. >> ALL RIGHT, SO, WHAT DOES THIS ALL MEAN TO INVESTORS IN THE HOTEL SPACE? IT MEANS INVESTORS HAVE TO MOVE BEYOND THE OUTSIZED FOCUS ON REVENUE PER AVAILABLE ROOM AND LOOK FOR BULLISH COMPANY-SPECIFIC ATTRIBUTES, AND WE, OF COURSE, HAVE YOU A GUIDE FOR THAT ONE. I THINK THE OTHER WAY OF LOOKING AT THIS IS YOU ACTUALLY HAVE TO DO WORK THIS YEAR, GUYS, TO FIND A GOOD HOTEL STOCK. LUCKY FOR YOU, I'M GOING TO TEE THIS UP AND IT'S ALL FREE. IT'S THREE BULLISH INDICATORS. FIRST UP, HOTELS THAT ARE BUYING BACK A TON OF STOCK AND PAYING DIVIDENDS, USUALLY, I THINK, IN THIS ENVIRONMENT WHERE THINGS ARE SLOWING DOWN, THESE ARE THE SHAREHOLDER-FRIENDLY ACTIONS YOU WOULD LIKE TO SEE. I LOOK AT HILTON. I LOOK AT MARRIOTT. HILTON, LAST YEAR, $2.5 BILLION GIVEN BACK IN TERMS OF CAPITAL TO SHAREHOLDERS, EYEING $3 BILLION THIS YEAR. MARRIOTT, REAL WHOPPING NUMBER HERE, GUYS, $4 BILLION IN CAPITAL, RETURN TO SHAREHOLDERS LAST YEAR. THAT'S DIVIDEND AND STOCK BUYBACKS. LOOKING AT ABOUT 4.1 TO $4.3 BILLION THIS YEAR. SO, LOTS OF GOOD THINGS THERE FROM BOTH OF THOSE COMPANIES. BULLISH INDICATOR NUMBER TWO, HOTELS THAT ARE AGGRESSIVELY BUILDING PIPELINES, NOT PIPELINES TO UNDERGROUND STATIONS, IT IS PIPELINES TO ADDING MORE ROOMS. HILTON ADDED MORE THAN 130,000 ROOMS TO ITS PIPELINE IN 2023, LOOKING TO ADD EVEN MORE ROOMS THIS YEAR. MARRIOTT ADDED 164,000 ROOMS TO ITS DEVELOPMENT PIPELINE IN 2023. RIGHT NOW, THAT COMPANY'S PIPELINE STANDS AT A RECORD 573,000 ROOMS. THAT'S JUST A MASSIVE NUMBER, GUYS. AND THE LAST BULLISH INDICATOR, NUMBER THREE, HOTEL LEADERSHIP TEAMS STAYING HUNGRY FOR MORE. I LOVE EXECS THAT ARE JUST GOING FOR IT ALL. THEY'RE NOT HUNGRY WITH PRIOR SUCCESS. THAT'S JUST MY THING, AND I LOVE SEEING THIS. AND I SEAT IT REALLY IN THREE NAMS, MARRIOTT, LIKE I MENTIONED HERE. I LOOK AT THAT COMPANY'S EXECUTIVE TEAM PUSHING INTO LAS VEGAS FINALLY WITH A NEW MGM LOYALTY DEAL THAT WILL PROBABLY BOOST THE LOYALTY PROGRAM FOR MARRIOTT, WHICH IS ALREADY INDUSTRY-LEADING. CHOICE HOTELS. I LOVE THAT THIS COMPANY'S GONE HOSTILE FOR WYNDHAM. THAT DEAL MIGHT GET DONE. HILTON SIGNED A DEAL WITH SMALL LUXURY HOTELS OF THE WORLD TO PUSH DEEPER INTO THE LUXURY MARKET. THREE INDICATORS HERE YOU WANT TO BE LOOKING FOR IF YOU WANT TO PICK SOME HOTEL STOCKS. >> ALL RIGHT, WELL, LET'S TALK ABOUT PICKING SOME MORE HOTEL STOCKS, BECAUSE YOU JUST MENTIONED THREE BULLISH INDICATORS THAT YOU ARE WATCHING WHEN IT COMES TO THE BEST PLAYS. THE REBOUND IN CORPORATE TRAVEL IS ALSO A KEY THEME THAT ANALYSTS ARE WATCHING THAT COULD HAVE A BIG IMPACT ON THE TRAVEL INDUSTRY'S WINNERS AND LOSERS. LET'S DIVE INTO IT AS PART OF OUR YAHOO! FINANCE'S TRAVEL GUIDE 2024 INDUSTRY INSIGHTS. WE ARE DIVING INTO WHICH IS THE BETTER POTENTIAL PLAY FOR YOUR PORTFOLIO WHEN IT COMES TO HOTELS, WHEN IT COMES TO AIRBNB. HERE AS PART OF THAT, WE WANT TO BRING IN MICHAEL, BAIRD SENIOR RESEARCH ANALYST, ALONG WITH BRIAN SOZZI, STILL WITH US HERE. MICHAEL, LET'S TALK ABOUT THOSE NAMES THAT ARE BEST POSITIONED. SOZ JUST LAID IT OUT. BUYBACKS AND DIVIDENDS, EXPANSION PLANS, AGGRESSIVE MANAGEMENT STYLE, IT SOUNDS LIKE TO HIM, AT LEAST, SEPARATES THE WINNERS AND LOSERS. ONE OF THOSE NAMES, CHOICE HOTELS, IS YOUR TOP PICK. WHAT DO YOU LIKE ABOUT CHOICE HOLDS, AND WHAT DO YOU SEE IN TERMS OF THAT UPSIDE? >> THANKS, GOOD MORNING. WITH CHOICE, AS YOU MENTIONED, THEY'VE GONE HOSTILE, TRYING TO ACQUIRE WYNDHAM. OUR VIEW ON THE STOCK IS IT'S A WIN-WIN. IF THE DEAL GOES THROUGH, AND IT'S REALLY UP TO THE FTC AT THIS POINT, BOTH COMPANIES HAVE SORT OF EXHAUSTED ALL AVENUES OF, YOU KNOW, FROM CHOICE FOR THEIR ATTEMPT, THEIR HOSTILE ATTEMPT AND WYNDHAM FROM THEIR DEFENSE. IF THE DEAL GOES THROUGH, THERE'S LOTS OF SYNERGIES. BIGGER AND BETTER IN THE HOTEL FRANCHISING BUSINESS, AND I THINK THE PUBLIC MARKET IS DISCOUNTING LOTS OF RISKS, AND ULTIMATELY, I THINK ONE TO TWO YEARS OUT POST-DEAL, PEOPLE ARE GOING TO BE SAYING, BIGGER IS BETTER. LOOK AT ALL THESE SYNERGIES. THEY'RE GOING TO BE ABLE TO DELEVER AND BUY BACK EVEN MORE STOCK. AND IF THE DEAL DOESN'T GO THROUGH, WE LIKE THE CHOICE STAND-ALONE PLAN, THE RECOVERY IN EARNINGS, AND THEIR BALANCE SHEET'S IN PHENOMENAL SHAPE AND THEY'RE GOING TO BE ABLE TO BUY BACK A TON OF STOCK AT A DISCOUNT. WE VIEW IT AS A WIN-WIN. IT'S VERY MUCH AN IDIOSYNCRATIC STORY AND CALL THAT WE'RE MAKING, BUT THAT'S THE SET-UP WE SEE FOR CHH TODAY. >> MICHAEL, SOME FOLKS I'VE TALKED TO ON THE CHOICE HOTELS-WYNDHAM BATTLE SUGGEST THAT THIS -- CHOICE WANTS TO MAKE THIS DEAL TO COMPETE ON LOYALTY WITH A MARRIOTT AND HILTON, GET MORE REWARDS MEMBERS. WHY NOT JUST GO INTO A MARRIOTT OR HILTON, WHICH ARE JUST LARGER COMPANIES? ARE THOSE THE BETTER PLAYS? >> WELL, BIGGER IS BETTER. THAT INCLUDES LOYALTY. I THINK WHEN YOU THINK ABOUT THE HOTEL BRAND BUSINESS, IT'S ALL ABOUT ONE PLUS ONE IS GREATER THAN TWO. WHEN YOU HAVE MORE DOTS ON THE MAP, OWNERS ARE HAPPIER BECAUSE MORE DEMAND COMES THROUGH THE DIRECT CHANNELS. DEVELOPERS HAVE A GREATER INCENTIVE TO CONVERT OR BUILD HOTELS, AND GUESTS HAVE MORE OPTIONS TO STAY IN, AND THERE'S A NICE FLYWHEEL THERE. IT'S A DIFFERENT CUSTOMER BASE FOR WYNDHAM AND CHOICE IN THE LOWER-END CHAIN SCALES THAN FOR HILTON AND MARRIOTT. THE HILTON AND MARRIOTT CUSTOMER, LOT OF TIMES, THE "BUSINESS BUSINESS TRAVELER IS EARNING HIS OR HER POINTS AND REDEEMING THEM AT ASPIRATIONAL PROPERTIES. THERE AREN'T THAT MANY WITHIN CHOICE AND WYNDHAM'S PORTFOLIO, AND A LOT OF THE REWARDS FOR CHOICE AND WYNDHAM ARE SOMETHING AKIN TO STAY NINE NIGHTS, GET THE TENTH FREE, A LITTLE MORE OF AN IMMEDIATE REWARD. BIGGER IS BETTER, AND THAT INCLUDES THE LOYALTY SYSTEM, AND WHEN YOU LOOK AT MARRIOTT AND STARWOOD, WHEN THAT DEAL CLOSED IN 2016, AND NOW MARRIOTT JUST HITTING 2 MILLION LOYALTY MEMBERS, THEY CAN LEVERAGE THAT PLATFORM. YOU SEE IT WITH WHAT HILTEN AND MARRIOTT ARE DOING WITH THEIR CREDIT CARD AGREEMENTS. THEY'RE TAKING THEIR MOST LOYAL GUESTS AND CREATING ANCILLARY FEE STREAMS AND PROFIT STREAMS THAT ARE VERY, VERY VALUABLE AND VERY STICKY. >> MICHAEL, TAKE US TO THE OTHER SIDE OF THE TRADE HERE TOO, WHEN YOU THINK OF EXPEDIA, PARENT COMPANY OF VRBO, AND AIRBNB, WHAT LEVERS CAN THEY PULL IN THIS ENVIRONMENT WHERE WE WERE LAYING OUT SOME OF THE PIPELINES THAT MARRIOTT/HILTON HAVE THAT THEY'RE GOING TO CONTINUE TO BRING TO MARKET, WHEREAS THE OTHER TWO ARE REALLY FOCUSED ON JUST MAKING SURE THAT PEOPLE ARE LISTING THEIR PROPERTIES. >> YEAH, THERE'S A MUCH GREATER FOCUS ON THE SUPPLY SIDE THERE, SO WHEN YOU THINK ABOUT BOOKING, EXPEDIA, AND AIRBNB, VERY MUCH FOCUSED ON THE LEISURE TRAVELER. LEISURE TRAVEL CONTINUES TO NORMALIZE. I KNOW THAT'S AN OVERUSED WORD, BUT PEOPLE ARE STILL TRAVELING. PEOPLE ARE STILL SPENDING MONEY. YES, THE GROWTH RATE IS SLOWING. I KNOW YOU PLAYED THE CLIP FROM PETER, BUT IT'S STILL POSITIVE, AND IT'S STILL GOOD, AND TRAVEL BROADLY IS GAINING GREATER SHARE OF PEOPLE'S WALLET THEY'RE NOT BUYING HOUSES, AND THEY'RE NOT BUYING WASHERS AND DRYERS ANYMORE. THEY'RE SPENDING ON OTHER THINGS. WHEREAS THE HOTEL BRANDS, PARTICULARLY HILTON, HYATT, AND MARRIOTT, THEY BENEFIT FROM BUSINESS TRAVEL STILL RECOVERING AND LARGE CITYWIDE GROUP AND CONVENTIONS STILL RECOVERING TOO. THERE'S MUCH MORE OF A BUSINESS TILT TO THE DEMAND SIDE OF THE PIE FOR THE HOTEL BRANDS, WHICH IS WHY THE STOCK PRICES ARE STILL PERFORMING THE WAY THAT THEY ARE. >> ALL RIGHT, MICHAEL BELLISARIO, THANK YOU SO MUCH FOR TAKING THE TIME TO JOIN US HERE THIS MORNING. OF COURSE, OUR THANKS TO BRIAN SOZZI AS WELL. >>> JUST ABOUT 90 MINUTES INTO THE TRADING DAY, STILL LOOKING AT GAINS FOR THE S&P AND NASDAQ. A BIT OF RELIEF ON WALL STREET FOLLOWING THAT PCE PRINT THIS MORNING. THE DOW, THOUGH, JUST BELOW THE FAULT LINE, OFF ABOUT 40. >>> THAT DOES IT FOR US TODAY. KEEP IT RIGHT HERE ON YAHOO! FINANCE. RACHELLE AND AKIKO HAVE YOU FOR THE NEXT HOUR. SEE YOU TOMORROW. ♪ >>> WELCOME TO YAHOO! FINANCE. IT IS 11:00 A.M. ON THE EAST COAST, 8:00 A.M. ON THE WEST. I'M AKIKO FUJITA, AND HERE'S WHAT I'M WATCHING AT THIS HOUR. INFLATION COOLDOWN, STOCKS PUSH HIGHER AS THE FED'S PREFERRED INFLATION GAUGE COMES IN LINE WITH EXPECTATIONS. WHAT THIS MEANS FOR POTENTIAL INTEREST RATE CUTS FROM THE CENTRAL BANK. >>> GOOD-BYE OPRAH, SHARES OF WW INTERNATIONAL ALSO KNOWN AS WEIGHT WATCHERS PLUNGE AS THE TALK SHOW HOST LEAVES THE BOARD AND SELLS HER STAKE IN THE COMPANY. THE FIRM FACING INCREASING COMPETITION FROM OBESITY DRUGS LIKE OZEMPIC. >>> AND GOING SMALL TO ADDRESS THE HOUSING CRUNCH, PENDING HOME SALES DROPPING 4.9% IN JANUARY ACCORDING TO THE NATIONAL ASSOCIATION OF REALTORS. WE'RE GOING TO BE TAKING A CLOSER LOOK AT THE BOOM IN ADUs OR GRANNY FLATS AS SOME CALL IT IN THE FACE OF TIGHT INVENTORY. THE CEO OF SOMARA IS GOING TO BE JOINING ME LATER IN THE SHOW. >>> BY THE WAY, THE LAST DAY OF FEBRUARY HERE, THE DOW TRADING PRETTY FLAT BUT THE S&P 500 UP ABOUT 10 POINTS, AND THE NASDAQ UP 69. AND OF COURSE THIS ON THE BACK OF THAT PCE PRINT COMING IN PRETTY MUCH IN LINE WITH EXPECTATIONS. LET'S TAKE A LOOK AT WHERE TREASURY YIELDS ARE RIGHT NOW. WE HAVE SEEN A PULLBACK IN THOSE YIELDS, THE TEN-YEAR UP 4.23%, AND THE 30-YEAR YIELD AT 4.36%. WELL, CORE PCE, PERSONAL CONSUMPTION EXPENDITURES, THE FED'S PREFERRED INFLATION GAUGE LOGGED ITS LOWEST ANNUAL INCREASE SINCE MARCH OF 2021 IN JANUARY. WHILE MONTHLY PRICES ROSE AT THE FASTEST RATE IN A YEAR, WHILE THERE IS STILL WORK TO BE DONE ON CURBING INFLATION, OUR NEXT GUEST BELIEVES WE ARE INCHING CLOSER TO THE FINISH LINE. FOR MORE ON THE LATEST INFLATION READ, LET'S BRING IN TWAN WIN, RSM U.S. ECONOMIST. GOOD TO TALK TO YOU TODAY. HOW DOES THE LATEST PRINT FIT IN LINE WITH WHERE YOU EXPECT THE ECONOMY TO MOVE? >> SO IT'S DEFINITELY GOOD NEWS THAT THE YEAR-OVER-YEAR INFLATION NUMBERS ARE GOING DOWN, BUT A LOT OF PEOPLE ARE FOCUSING ON THE MONTH OVER MONTH, AND EVEN THE SUPER CORE STRONGER PRINT THAT LAST MONTH. WE'RE NOT TOO WORRIED ABOUT THE STRONG INFLATION PREMIUM GENERALLY BECAUSE ALL THE SEASONAL FACTORS AND THE SPIKE IN HOUSING INFLATION, WHICH IF YOU LOOK AT IT IS MORE LIKE NOISE THAN TREND, SO I DO THINK GIVEN THE REBOUND ENERGY AND D GASOLINE PRICES WE MIGHT SEE A STRONG NUMBER FOR INFLATION. BUT EVEN IF THAT'S THE CASE, WE DON'T EXPECT ANY SHARP REBOUNDS THAT REALLY CHANGE THE CALCULATION FOR RATE CUTS IN 2024. WE THINK HOUSING INFLATION WILL EVENTUALLY COME DOWN IN THE SUMMER, AND ACCEPT ANY KINDS OF INCREASES IN GOODS INFLATION OR ENERGY INFLATION THAT EVERYBODY IS CONCERNED ABOUT. EVEN LOOK AT THE OVERALL PICTURE, WE THINK THERE ARE A LOT OF REASONS TO EXPECT INFLATION TO EASE FURTHER IN THE SUMMER. >> SO PUT THE JANUARY NUMBERS IN CONTEXT, IS WHAT YOU'RE SAYING, JUST GIVEN THE NOISE WE USUALLY SEE IN THAT MONTH. WHAT DOES THAT MEAN IN TERMS OF WHEN THE FED REACHES THAT 2% TARGET AND WHEN THOSE INTEREST RATE CUTS ARE LIKELY TO BEGIN. >> WE THINK THAT THERE'S QUITE A GOOD CHANCE WE MIGHT ACTUALLY GET TO 2% BY MID YEAR FOR THE OVERALL INFLATION, PCE INFLATION, AND THE CORE PCE INFLATION, WE MIGHT SETTLE AROUND 2.5%, OR BECAUSE OF THAT COOLDOWN IN HOUSING INFLATION. SO THAT REALLY CONTINUES TO REAFFIRM OUR FOCUS THAT WE MADE LAST DECEMBER THAT WE MIGHT EXPECT THE FIRST RATE CUT AROUND JUNE THIS YEAR. IF YOU LOOK AT WHAT HAS HAPPENED IN THE PAST, WE HAD SOME GOOD INFLATION NEWS, AND THE MARKET KIND OF JUMPED AHEAD OF ITSELF TO PRICE IN EARLIER RATE CUTS THAN JUNE. NOW, THE PROBABILITY OF RATE CUT, THE FIRST RATE CUT IN JUNE IS ABOUT 70% IN TOTAL. WHICH IS NOT 100%. THAT IS WHY WE ALWAYS WANT TO STAY AWAY FROM CHANGING OUR MINDS WITH ONLY A FEW DATA POINTS, ESPECIALLY AFTER LOOKING AT THE JANUARY DATA, AND WE THINK THAT THE FED IS STILL IN THE SAME BOAT. THEY ARE NOT GOING TO CUT RATES TOO EARLY, AND BY THE SUMMER, WE THINK THE FED WILL HAVE ABOUT ONE YEAR OF INFLATION DATA THAT REALLY SUPPORTS LOWER INTEREST RATES. >> SO YOU SAY CORE PCE EXPECTED TO REMAIN AROUND 2 1/2%, WHAT IS THE INCENTIVE FOR THE FED TO CUT EVEN IF IT'S JUST IN JUNE? >> SO I THINK AROUND JUNE, AGAIN, THEY'RE GOING TO HAVE ONE YEAR OF INFLATION DATA, AND BY THAT TIME, I THINK THE ECONOMY WILL COOL DOWN MATERIALLY. AND IF YOU LOOK AT THE LABOR MARKET, I THINK THERE'S A LOT MORE INCENTIVE FOR THE FED TO KEEP REAL STEADY, TO KEEP THE LABOR MARKET STRONG, AND NOW, WITH THAT IN MIND, THOUGH, I THINK IT'S VERY IMPORTANT TO SPECIFY THE RISK THAT THE ECONOMY MIGHT CONTINUE TO OUTPERFORM OUR EXPECTATIONS, AND ONE REASON IS IF YOU LOOK AT THE STOCK MARKET, IT HAS BEEN ON A MASSIVE RALLY SINCE LAST YEAR, AND I THINK IT IS TIME THAT WE CANNOT IGNORE THE FACT THAT THE STOCK MARKET, WE JUST PUT OUR RESEARCH NOTICE ON THE IMPACT OF THE STOCK MARKET. AND THE RULE FOR EVERY INCREASE IN STOCK MARKET WEALTH, EVERY $1 INCREASE IN STOCK MARKET WEALTH, CONSUMER SPENDING INCREASES BY $0.32. AND IF YOU LOOK AT ALL THE GAINS FROM DIVIDEND AND ASSET PRICES FROM LAST YEAR, THAT COULD POTENTIALLY ACCOUNT FOR 1 TO 4% INCREASE IN TOTAL ANNUAL GDP ON A NOMINAL BASIS. SO THE BOTTOM LINE IS WE DON'T THINK THE FED IS IN THE POSITION TO RISK CUTTING THIS YEAR. SO THE RISK IS WE MIGHT SEE THREE OR EVEN LESS THAN THREE CUTS IN 2024. IF THE ECONOMY CONTINUES TO OUTPERFORM. >> SO A RATE CUT IN JUNE OR NO RATE CUTS AT ALL? >> WE THINK A RATE CUT IN JUNE, AND THEN THE FED WILL HAVE AMPLE TIME TO THINK ABOUT THE NEXT RATE CUT AFTER JUNE, AND THEY CAN EVEN SPREAD OUT THE RATE CUTS LIKE WHAT THEY DID WITH THE RENT INCREASES THAT WE SAW LAST YEAR. SO JUST TO SLOW DOWN THE PACE OF THE RATE INCREASES, SO THIS TIME IT SLOWS DOWN THE PACE OF RATE CUTS. THEY DON'T HAVE TO CUT TOO MUCH IN 2024. NOW, ON TOP OF THAT, WE THINK THAT THE FED HAS THE KIND OF LUXURY THAT THEY HAVEN'T HAD FOR QUITE SOME TIME. THAT IS BECAUSE OF THE INCREASE IN RECENT PRODUCTIVITY. ACTUALLY, TO THE FED'S FAVOR, NOT ONLY WILL IT BOOST GROWTH, BUT IT WILL KEEP INFLATION DOWN AT THE SAME TIME. I THINK, AGAIN, THE FED REALLY TAKES TIME TO CUT RATES. >> TUAN, RSM U.S. ECONOMIST, IT'S GOOD TO TALK TO YOU TODAY, APPRECIATE THE TIME. >> THANK YOU. >>> WELL, CONGRESSIONAL LEADERS SAY THEY HAVE A PLAN TO AVERT A GOVERNMENT SHUTDOWN. AT LEAST FOR NOW. THE SHORT-TERM BILL FUNDS THE GOVERNMENT UNTIL MARCH 8th AND MARCH 22nd. TO BREAK THIS ALL DOWN FOR US, YAHOO! FINANCE'S VERY OWN RICK NEWMAN IS HERE. WE'RE BACK TO A SHORT-TERM FUNDING BILL, RICK. >> YEAH, WE SHOULD POINT OUT, WE ARE FIVE MONTHS INTO THE GOVERNMENT'S FISCAL YEAR. REPUBLICANS SAID ONE OF THE THINGS THEY WERE GOING TO MAKE, A HALLMARK OF THEIR CONTROL, THE HOUSE OF REPRESENTATIVES THIS YEAR, WAS WE WERE GOING TO GET BACK TO REGULAR SPENDING BILLS. IN OTHER WORDS, YOU PASS A SPENDING BILL FOR THE WHOLE YEAR AT THE START OF THE FISCAL YEAR, OCTOBER 1st, AND THEN YOU DON'T HAVE TO GO THROUGH ALL OF THIS NONSENSE. OF COURSE THAT HASN'T HAPPENED, SO THE SHORT ANSWER TO WHAT'S HAPPENING NOW IS CONGRESS HAS NOT YET PASSED THIS PERMANENT SPENDING BILLS BUT THERE'S pREP THE HOUSE AND THE SENATE HAVE COME UP WITH SOME KIND OF AGREEMENT, WHAT THEY'RE GOING TO DO IS ANOTHER SHORT-TERM SPENDING BILL, BE APPARENTLY THEY DO HAVE ENOUGH AGREEMENT ON THE BASIC PRIORITIES THAT DURING THAT TIME, THE NEXT FEW WEEKS GOING INTO MARCH, THEY WILL ACTUALLY GET THE FULL SPENDING BILLS DONE, AND IF THIS REPORTING IS ALL TRUE AND NOTHING BLOWS UP, THEN I GUESS BY THE END OF MARCH, THAT MEANS THE GOVERNMENT WILL BE FUNDING ALL THE WAY THROUGH THE END OF SEPTEMBER, AND THEN AFTER SEPTEMBER, I GUESS WE JUST START UP WITH THIS WHOLE THING ALL OVER AGAIN, BUT BASIC TAKE AWAY HERE IS THAT THE ODDS OF A GOVERNMENT SHUTDOWN ARE RAPIDLY DECLINING. THEY'RE NOT ZERO BECAUSE SOMETHING COULD ALWAYS GO WRONG HERE. IT LOOKS LIKE THE GOVERNMENT IS JUST GOING TO STAY IN OPERATION. >> THE OTHER BIG STORY WE'RE WATCHING OUT OF D.C. TODAY, RICK, IS WHAT'S PLAYING OUT IN THE SENATE. SENATE MINORITY LEADER MITCH McCONNELL ANNOUNCING HE IS STEPPING DOWN FROM HIS LEADERSHIP POST, ALTHOUGH WE SHOULD POINT OUT HE'S PLANNING TO SERVE OUT THE REST OF HIS TERM. WHO IS IN LINE TO REPLACE HIM? OR I SHOULD SAY WHICH ONE OF THE JOHNS ARE IN LINE TO REPLACE HIM. AND HOW MUCH INFLUENCE DO YOU THINK THE FORMER PRESIDENT DONALD TRUMP IS GOING TO HAVE ON THIS DECISION? >> THERE ARE THREE JOHNS AS EVERYBODY IN WASHINGTON IS TALKING ABOUT. SENATOR JOHN CORNYN OF TEXAS, JOHN THUNE OF SOUTH DAKOTA, AND JOHN BARRASSO OF WYOMING. I GUESS YOU MIGHT SAY CORNYN OF TEXAS MIGHT BE THE EARLY FAVORITE. THESE ARE GUYS WHO HAVE A LOT OF EXPERIENCE IN THE SENATE. THEY HAVE WORKED PRETTY CLOSELY WITH MITCH McCONNELL. IT DOESN'T LOOK LIKE WE'RE GOING TO HAVE SOME UPSTART WHO WOULD BE ABLE TO GET ENOUGH VOTES. I MEAN, THE SENATE OBVIOUSLY VERY CLUBBY. THEY WANT TO GO WITH A KNOWN QUANTITY. GETTING AROUND TO THE QUESTION OF TRUMP, THIS IS A VERY INTERESTING QUESTION. McCONNELL IS GOING TO SERVE TWO TERMS HERE, FIRST HIS TERM AS SENATE MAJORITY LEADER, WHICH BASICALLY ENDS IN NOVEMBER, AND THE SENATE REPUBLICANS WILL CHOOSE THEIR NEW LEADER AFTER THE ELECTIONS IN NOVEMBER, AND THAT'S WHEN McCONNELL -- SO McCONNELL IS GOING TO KEEP THE JOB UNTIL THEN. HE WILL NO LONGER BE THE MINORITY LEADER, BUT HE'S GOING TO STAY IN THE SENATE AS A SENATOR UNTIL HIS TERM IS UP IN '27. THE ELECTION FOR THE REPUBLICAN LEADER WILL COME AFTER THE NOVEMBER ELECTION WHICH WILL TELL US TWO THINGS, WHO IS THE PRESIDENT GOING TO BE, TRUMP OR BIDEN, AND ALSO WILL REPUBLICANS TAKE CONTROL OF THE SENATE AND HAVE A MAJORITY. I'M NOT SO SURE THAT TRUMP IS GOING TO BE CALLING THE SHOTS HERE THE WAY HE SEEMS TO BE CALLING THE SHOTS WITH REGARD TO WHAT REPUBLICANS ARE DOING IN THE HOUSE. HE BASICALLY SEEMS TO BE CHANNELLING HIMSELF STRAIGHT INTO HOUSE SPEAKER MIKE JOHNSON REFUSING TO BRING UP THE UKRAINE AID BILL FOR A VOTE, FOR EXAMPLE, REFUSING TO VOTE FOR A BIPARTISAN IMMIGRATION BILL. THAT ALL SEEMS TO BE TRUMP'S MEDDLING. I'M NOT SURE HE'S GOING TO HAVE THAT MUCH INFLUENCE. IF TRUMP WINS IN NOVEMBER, I SUPPOSE IT COULD BE A DIFFERENT STORY. THERE ARE A LOT OF THINGS TO FACTOR IN HERE, AND WE'RE NOT GOING TO KNOW A LOT OF THIS UNTIL NOVEMBER OBVIOUSLY. >> STILL A LOT OF TIME UNTIL NOVEMBER. RICK NEWMAN AS ALWAYS, THANK YOU SO MUCH. >> SEE YOU, AKIKO. >>> COMING UP, WE'RE GOING TO BE LOOKING AT REAL ESTATE PENDING HOME SALES. DATA OUT TOLD. AND WE'RE GOING TO BE ASKING IF THE FUTURE OF HOUSING IS IN SMALLER STRUCTURES. THAT CONVERSATION IS COMING UP AFTER THE BREAK. >>> PENDING HOME SALES OUT THIS MORNING, DECLINING 4.9% IN JANUARY, AND DECLINING ACROSS ALL U.S. REGIONS YEAR ON YEAR. LET'S BRING IN YAHOO! FINANCE'S DANI ROMERO TO GIVE US THE DETAILS. >> THE DROP IN CONTRACTS SIGNED IN JANUARY REALLY REFLECTS THE WINTER WEATHER RATHER THAN A DECLINE IN DEMAND. REMEMBER, BUYERS AVOID COLDER WEATHER WHEN BUYING A HOME, WHLE OTHERS REALLY ARE EXPECTING LOW RATES TO ACTUALLY DROP DURING THE SPRING SEASON, BUT REMEMBER. ANOTHER REASON WHY THERE IS THIS DROP IN JANUARY, SOME ECONOMISTS WERE SAYING THERE COULD HAVE BEEN A PULL FORWARD IN SALES FROM JANUARY INTO DECEMBER. REMEMBER, DECEMBER SAW AN 8.3% GAIN WHICH WAS REVISED DOWN TO 5.7 DUE TO THE FAVORABLE WEATHER. BUT BACK TO THE JANUARY RESULTS. IF WE COMPARE THIS TO A YEAR AGO, PENDING HOME SALES IS STILL DOWN 8.8%. AND ON A MONTHLY BASIS, CONTRACTS SIGNED IN THE NORTHEAST AND IN THE WEST ROSE. WHILE IN THE MIDWEST, THE SOUTH, THOSE DROPPED. WHY? THE SOUTHERN STATES AND THE STATES IN THE MIDWEST ARE EXPERIENCING REALLY STRONG JOB GROWTH COMPARED TO THE REST OF THE COUNTRY, AND WHILE THAT ALSO MEANS THAT A LOT OF PEOPLE ARE LOOKING FOR LONG-TERM LIVING, HOWEVER, INVENTORY STILL REMAINS THE ISSUE AT HAND. NOW, THERE IS SOME GOOD NEWS. RED FIN REPORTED THAT DURING THE FOUR WEEKS ENDING FEBRUARY 25th, THERE WAS THE BIGGEST JUMP IN NEW LISTINGS. IN NEARLY THREE YEARS. THAT WAS ALMOST A 13% GAIN THERE. TOTAL INVENTORY IS IMPROVING. HOWEVER, HOUSING COSTS STILL REMAIN HIGH. THE TYPICAL MORTGAGE RIGHT NOW PAYMENT IS $2,671, WHICH CONTINUES TO CRUSH THOSE HOME BUYERS AND ALSO THOSE ELEVATED MORTGAGE RATES IS NO HELP RIGHT NOW WITH SALES, AKIKO. >> YEAH, THOSE MORTGAGE RATES CERTAINLY HURTING PROSPECTIVE BUYERS, THERE. DANI ROMERO, AS ALWAYS, THANK YOU SO MUCH. HOME SALES MAY BE DOWN, BUT HOME PRICES CONTINUE TO REMAIN ELEVATED. THE LATEST S&P K. SHILLER HOME PRICE INCREASE, POINTING TO A POINT AND A HALF INCREASE IN 20 MAJOR MARKETINGS. THE LACK OF INVENTORY IS A KEY CONTRIBUTOR, WITH A BIG BOOM IN THE BUILDOUT OF ACCESSORY DWELLING UNITS OR ADUs. CALIFORNIA RECENTLY PASSED A NEW LAW ALLOWING HOMEOWNERS TO SELL ADUs, AND OUR NEXT GUEST IS LOOKING TO CAPITALIZE ON THAT BY BUILDING CUSTOMIZED UNITS FOR PROSPECTIVE BUYERS. THE COMPANIES BORN OUAIR AIRBNB. YOU GUYS HAVE A BIG ANNOUNCEMENT ABOUT ACQUIRING A FACTORY OVER IN MEXICO SO YOU CAN VERTICALLY INTEGRATE THE OPERATION. WHAT DOES THIS MEAN ABOUT YOUR ABILITY TO RESPOND TO THIS DEMAND? >> YEAH, HI, AND THANKS FOR HAVING ME HERE. YOU KNOW, WE DID JUST ANNOUNCE THAT WE'RE GOING TO -- WE BROUGHT ON 150,000 SQUARE FEET IN MEXICO TO ACTUALLY BUILD OUR UNITS, AND WHAT'S REALLY EXCITING ABOUT THAT IS THAT WE NOW, WITHIN OUR COMPANY, WE DESIGN, WE ENGINEER, WE MANAGE SUPPLY CHAIN AND WE NOW MANUFACTURE THE UNITS THAT WE BUILD. YOU KNOW, WE DESIGN AND INSTALL THESE BEAUTIFUL FLEXIBLE LIVING SPACES THAT PEOPLE CAN USE IN THE BACKYARD. AND GIVES THEM MORE WAYS OF BEING ABLE TO, YOU KNOW, OPERATE THEIR LIFE'S ACTIVITY. SO THE FACT THAT WE ACTUALLY OWN OUR MANUFACTURING IS REALLY INTERESTING BECAUSE WE NOW CONTROL THE QUALITY. WE CAN CONTROL THE ON TIME DELIVERY. WE CAN CONTROL WHATEVER PRODUCTS WE WANT TO PUT INTO IT, AND OUR PRODUCT DEVELOPMENT CYCLE TIME GETS MUCH MORE RAPID. WE CONTROL THOSE ASPECTS. VERY EXCITED TO BRING THAT ONLINE. >> AND, MIKE, FOR THOSE WHO HAVEN'T NECESSARILY BEEN FOLLOWING THE STORY OR THE GROWTH IN ADUs, TALK ABOUT WHAT KIND OF UNITS WE'RE TALKING ABOUT. HOW BIG ARE THESE YUNTUNITS AND WHAT'S THE PRICE POINT YOU'RE LOOKING AT? >> WE'RE A COMPANY THAT HELPS PEOPLE WITH NEW WAYS OF LIVING AND THE WAY OF LIVING IS HAVING A FLEXIBLE LIVING STRUCTURE THAT YOU CAN PUT IN YOUR BACKYARD. WE DESIGN THESE SMALL HOMES, IF YOU WILL, WHICH, TODAY WE HAVE A LINEUP OF A STUDIO, A ONE BEDROOM, ONE BATH, A TWO BEDROOM ONE BATH, AND TWO BEDROOM TWO BATH THAT WE'RE ANNOUNCING THIS WEEK, AND THESE ARE ANYWHERE FROM 400 SQUARE FEET TO 800 SQUARE FEET, AND YOU CAN POP THESE INTO THE BACKYARD. IF YOU THINK ABOUT AN EXTRAORDINARILY FLEXIBLE WAY TO ADD LIVING SPACE TO YOUR HOME, YOU ALREADY HAVE A BACKYARD. YOU'VE BOUGHT IT. IT'S PARTS OF YOUR COST STRUCTURE. WHY NOT BE ABLE TO USE YOUR YARD IN A MUCH BETTER WAY, BOTH FINANCIALLY AND QUALITATIVELY. SO WHAT WE DO IS WE BUILD THESE UNITS. AS I MENTIONED, WE'LL BUILD THESE IN MEXICO. THEN WE DROP THEM ON TO THE BACKYARD, AND THE ENTIRE PROCESS TAKES LITERALLY LIKE SIX WEEKS TO ACTUALLY BE IN YOUR BACKYARD, DO THE CONSTRUCTION OF, YOU KNOW, SO WE CAN HOOK UP THE UTILITIES AND THEN BE ABLE TO TRUCK IN THE UNIT INTO THE BACKYARD. >> AND, MIKE, FOR YEARS, WE HAVE SEEN ADUs SERVE AS A WAY FOR HOMEOWNERS TO BE ABLE TO GET ADDITIONAL INCOME, BEING ABLE TO RENT OUT THAT SPACE, ESPECIALLY WITH HOME PRICES SO HIGH, IN PLACES LIKE CALIFORNIA. WE'VE SEEN A CHANGE IN REGULATIONS THAT ALLOWS FOR HOMEOWNERS TO NOW SELL THOSE UNITS THEMSELVES. WHAT HAS THAT MEANT SPECIFICALLY, HAS THAT PUSHED UP DEMAND EVEN MORE? >> YEAH, WHAT'S REALLY DRIVING THIS IS THE CALIFORNIA HOME PRICES, AS YOU KNOW ARE VERY HIGH. WITH HIGH HOME PRICES COMES HIGH RENTAL INCOME. SO THE ABILITY TO BRING ON MORE HOUSING UNITS IS A REAL OBJECTIVE OF CALIFORNIA. THEY HAVE PASSED MANY OF THESE DIFFERENT REGULATIONS AND LAWS THAT ENABLE AND DOZENS AND DOZENS SINCE 2016, THAT ENABLE HOMEOWNERS TO BE ABLE TO ADD THIS CAPACITY NOT BACKYARD. ABOUT HALF THE TIME THE CUSTOMERS MAY USE THESE FOR RENTAL INCOME, AND BECAUSE YOU'VE ALREADY BOUGHT THE LAND, YOU'VE ALREADY OWNED THE BACKYARD, ADDING A COST OF THE UNIT ITSELF ON TO THE BACKYARD AND BE ABLE TO GET FULL RENTAL INCOME IS VERY ATTRACTIVE, AND IT ALMOST CREATES AN IMMEDIATE FREE CASH FLOW IMPACT FOR MANY AREAS OF CALIFORNIA. YOU KNOW, AND SO WHAT CALIFORNIA DOES IS TRYING TO STIMULATE THIS HOUSING, MORE AND MORE HOUSING UNITS. IT'S AFFORDABLE BY NATURE BECAUSE THE UNITS ARE SMALLER SO THEY TEND TO RENT FOR LESS OR COST LESS TO BUILD, AND SO IT APPEALS TO MANY DIFFERENT CUSTOMERS BUT THE DEMAND FOR THESE ADUs ON THE BACK OF ALL OF THESE LAW CHANGES, SINCE 2016 TO NOW HAS GONE UP RIGHT ABOUT 20X, AND IT'S CURRENTLY THE LARGEST PERMIT REQUEST FOR THIS FORM FACTOR IS THE HIGHEST OF ANY IN CALIFORNIA RIGHT NOW. IT'S A WAY FOR THEM, AND IT'S A TOOL. IT'S A VEHICLE THAT THEY MAKE THESE CHANGES AND MORE AND MORE PEOPLE WILL TAKE ADVANTAGE OF IT BECAUSE THE ECONOMICS ARE SO STRONG. AND THAT IS ONE WAY TO ADDRESS THE HOUSING SHORTAGES IN CALIFORNIA. >> SO, MIKE, CALIFORNIA HAS LED THE WAY ON THIS, BUT THERE'S OBVIOUSLY A LOT OF OTHER MARKETS THAT HAVE BEEN LOOKING SPECIFICALLY AT ADUs. FOR SAMARA, WHERE ARE YOUR OTHER GROWTH MARKETS RIGHT NOW IN THE U.S.? >> YEAH, WE THINK IT'S GOING TO PRETTY MUCH START WITH CALIFORNIA JUST BECAUSE OF THE HOUSING STRESS. BUT EVEN INDEPENDENT OF THE HOUSING STRESS, THIS IS KIND OF A REPRESENTATION OF A NEW WAY OF LIVING. SO ONLY HALF THE TIME THEY'RE ACTUALLY RENTED OUT. BUT TO ACTUALLY HAVE THIS FLEXIBLE LIVING SPACE RIGHT IN YOUR BACKYARD ALLOWS YOU TO DO MANY DIFFERENT THINGS TO ACTUALLY OPERATE YOUR LIFE. YOU KNOW, THE AVERAGE HOMEOWNER IN CALIFORNIA IS THERE ARFOR LI 17 YEARS. YOU MIGHT USE IT FOR INCOME ON DEMAND, RENT IT OUT FOR THREE MONTHS, SIX MONTHS, AND YOU ALSO MIGHT BRING YOUR PARENTS TO LIVE. USE IT FOR YOUR KIDS COMING HOME FROM COLLEGE, MIGHT BE A PANDEMIC SOMEDAY, AND WORK FROM HOME IS GOING TO BECOME A THING, BUT ALL THE WHILE THAT THAT UNITS SITS IN THAT BACKYARD, YOU'RE APPRECIATING. I MEAN, IT'S ACTUAL REAL ESTATE, SO YOU WOULD EXPECT IT TO APPRECIATE RIGHT ALONG WITH THE FRONT OF THE HOUSE. JUST IN TERMS OF A VERY COST EFFECTIVE WAY TO BRING ON THE OPPORTUNITY TO EITHER HAVE pINC TO USE IT IN MANY DIFFERENT WAYS TO JUST DESIGN A BETTER LIFE FOR YOURSELF IS VERY HIGH. WHEN WE THINK ABOUT THE OTHER REGIONS, GETTING BACK TO YOUR QUESTIONS ON WHAT ARE THE OTHER GROWTH MARKETS. CERTAINLY ANYWHERE THERE'S GOING TO BE HOUSING STRESS IS HELPFUL. IT'S A FORM FACTOR THAT PEOPLE ARE GOING TO USE TO OPERATE THEIR LIFE IN THE FUTURE. INDEPENDENT OF THE HOUSING STRESS THAT MAY BE OCCURRING, AND THE INCREMENTAL RENTAL RATES GOING ON, WE THINK PEOPLE WILL ADOPT THIS AS A DIFFERENT WAY OF LIVING TO HAVE THIS SUPER FLEXIBLE SPACE, YOU KNOW, TO BE ABLE TO HAVE 500 SQUARE FEET IN YOUR YARD, USE IT FOR MANY DIFFERENT WAYS OVER THE COURSE OF THE DECADES AND, YOU KNOW, ALSO BE ABLE TO RENT IT OUT. >> YEAH, PRETTY IMPRESSIVE TO SEE SOME OF THESE ADUs IN OPEN HOUSES I HAVE GONE TO. OFTENTIMES LOOK BETTER THAN THE MAIN UNITS. GOOD TO TALK TO YOU TODAY. >> I'LL HAVE TO CHECK OUT SAMARA OUT THERE. THANK YOU SO MUCH FOR JOINING US TODAY. >> OKAY. THANK YOU. >>> COMING UP, WE'RE GOING TO BE TAKING A LOOK AT MAJOR NAMES IN THE HEALTH CARE SERVICES SECTOR, AND THE BEST PLACE MOVING FORWARD. THAT'S COMING UP AFTER THE BREAK. >>> TD COWEN OUT WITH A NEW NOTE ON THE HOSPITAL SERVICES SECTOR FINDING HOSPITAL REVENUE GREW UP CLOSE TO 8% YEAR ON YEAR DRIVEN BY IN-PATIENT AND OUT PATIENT ACTIVITY. THAT FIRM NOTES THIS YEAR IS SEEING SOME MODERATIONS. WHAT ARE THE STRONGEST PLAYS FOR INVESTORS IN THE SPACE. LET'S BRING IN GARY TAYLOR, TD COWEN, SENIOR EQUITY ANALYST, GOOD TO TALK TO YOU. LET'S TALK ABOUT THE GROWTH STORY. HOW MUCH MORE RUNWAY DO YOU THINK THERE IS? >> HEY, GOOD MORNING, THANKS FOR HAVING ME. IT'S A GOOD QUESTION. YOU KNOW, I THINK WE ARE GOING TO SEE HOSPITAL REVENUE GROWTH MODERATE, AND IT'S SO IMPORTANT TO US TO TRACK NOT JUST FOR THE MARKET CAP AND THE SECTOR, THAT'S THE ACTUAL HOSPITAL OR PROVIDER STOCKS, BUT YOU HAVE EXPONENTIALLY MORE MARKET CAP, WHICH IS THE HEALTH INSURANCE COMPANIES, AND THESE COSTS, THIS HOSPITAL REVENUE GROWTH, THIS PROVIDER REVENUE GROWTH IS THE MEDICAL EXPENSES THE PAYERS HAVE TO PAY FOR. IT'S IMPORTANT FOR BOTH SECTORS. OVERALL, I THINK THERE'S ONE MORE GOOD MONTH. FEBRUARY WILL BE GOOD. IT'S GOING TO BE DRIVEN BY LEAP YEAR. AS WE GET INTO THE REST OF THE YEAR, STARTING IN MARCH, THE COMPS GET SO MUCH MORE DIFFICULT THAT WE EXPECT WE ARE GOING TO SEE THIS REVENUE GROWTH MODERATING FOR PROVIDERS. AND THEREFORE THE MEDICAL EXPENSES MODERATING FOR THE HEALTH INSURANCE COMPANIES. >> YEAH, YOU POINTED OUT IN YOUR NOTE THAT YOU THINK THE TRADE IS IN THE LATE CYCLE RIGHT ANNOUNCEMENT. WITH THAT SAID, WALK ME THROUGH YOUR TOP PICKS ON THE BACK OF THIS GROWTH. >> SURE. DEPENDS ON TIME FRAME, OBVIOUSLY. DEPENDS ON RISK APPETITE, BUT IN THE VERY NEAR TERM, WE CAME INTO THE YEAR SAYING WE WANT TO OWN THE PROVIDERS OVER THE HEALTH INSURERS FOR THE FIRST HALF OF THE YEAR, AND ANTICIPATING BY THE TIME WE PIVOTED TO THE BACK HALF, WE WOULD BE IN A POSITION TO RECOMMEND PAYERS OVER PROVIDERS. WE'RE CURRENTLY IN THE FIRST HALF OF THE YEAR, OBVIOUSLY. STILL IN THE PROVIDER TRADE. OUR FAVORITE NAMES ARE HCA, LARGE HOSPITAL IN THE U.S. ACADIA, ONE OF THE LARGE STANDING BEHAVIORAL PROVIDERS, AND SURGERY PARTNERS, WHICH IS AN AMBULATORY SURGERY CENTER COMPANY. THE ONLY INSURER THAT WE HAVE KIND OF BUMPED UP INTO THE TOP CATEGORY THIS EARLY IN THE YEAR IS HUMANA, AND THAT'S BECAUSE HUMANA HAS HAD TERRIBLE NEWS. HE'S CUT THE EARNINGS GUIDANCE DOWN. THE STOCK IS DOWN 40%, AND WE'RE WANTING TO TAKE ADVANTAGE OF THE STOCK BEING LOWER. >> SO FOR THOSE WHO ARE WATCHING THIS, NOT NECESSARILY FOLLOWING THE TRADE SO FAR, WHAT'S A GOOD ENTRY POINT WHEN YOU THINK ABOUT SOME OF THOSE NAMES YOU JUST HIGHLIGHTED? >> YEAH, WELL, YOU KNOW, FOR THE PROVIDER TRADE, I THINK IT'S A LITTLE LATE, SO IF YOU'RE A RETAIL INVESTOR, AND YOU'RE LOOKING AT HCA, FOR EXAMPLE. HCA NOVEMBER WAS 225 GOING INTO ITS INVESTOR DAY. PEOPLE THOUGHT THE OUTLOOK WAS TERRIBLE. THE STOCK IS NOW AT 310. THIS ISN'T A GREAT ENTRY POINT IN MY VIEW. IF YOU HAVE A MULTIYEAR VIEW, LONG-TERM INVESTOR, BEST COMPANY IN THE HEALTH CARE PROVIDER SPACE. OWN THE STOCK. DON'T CARE MUCH ABOUT ENTRY POINT. HONESTLY, WE WOULD LIKE TO SEE THAT BACK AT THE 280, 290 RANGE, TO BE MORE OPPORTUNISTIC, OUTSIDE OF JUST OWNING IT FOR THE NEXT MONTH OR TWO. ON HUMANA, WE THINK BELOW $400 IS A PRETTY INTERESTING. THE STOCK IS AT 350. THERE'S ONE MORE PIECE OF NEGATIVE NEWS THAT COULD COME OUT IN APRIL. THE BEAR CASE, IS IT WOULD TAKE THE STOCK TO THE 320 RANGE. THE REALITY IS WE THINK HUMANA IN 18 MONTHS WAS SOMEWHERE BETWEEN 450 AND 500. SO IF YOU'RE DOLLAR COST AVERAGING ENTRY POINT ANYWHERE IN THE NEXT MONTH OR TWO, AT 350 OR LOWER, WE THINK THAT'S PRETTY ATTRACTIVE. >> UNITED HEALTH, ONE OF THOSE NAMES THAT YOU MENTIONED AS, YOU KNOW, ONE OF THE TOP PICKS, WE GOT THE ANNOUNCEMENT YESTERDAY THAT THE DOJ HAS LAUNCHED AN ANTI-TRUST INVESTIGATION INTO THE COMPANY. HOW SHOULD INVESTORS BE LOOKING AT THE HEADLINE RIGHT NOW, AND HOW BIG OF A RISK IS IT? >> YEAH, WELL, UNITED IS NOT ONE OF THE TOP PICKS RIGHT NOW. WE ARE RECOMMENDING THE STOCK, BUT IT'S NOT ONE OF OUR TOP PICKS. HONESTLY, WHAT WE'RE CONCERNED RIGHT NOW REALLY IS MORE THE NEAR TERM FUNDAMENTALS OF THE COMPANY. WE THINK IT'S LIKELY THEY MISSED THE FIRST QUARTER MEDICAL LOSS RATIO. WE THINK THERE'S MID SINGLE DIGIT EARNINGS RISK FOR 2024. WE DON'T THINK THEY HAVE GUIDED PARTICULARLY CONSERVATIVELY. WE'D BE LOOKING, AGAIN, TO ADD TO THAT A LITTLE BIT LOWER HEADING INTO THE BACK HALF OF THE YEAR. BUT WITH RESPECT TO DOJ, I'M LESS CONCERNED ABOUT IT. HONESTLY. WE SEE SOME POLITICAL MOTIVATION HERE. WE KNOW THERE'S SOME TIES TO SENATE STAFFERS, SENATORS, YOU KNOW, THAT DON'T LIKE HEALTH INSURANCE IN GENERAL, THAT PARTICULARLY THINK UNITED IS PROBLEMATIC AND SOME TIES TO THE DOJ. SO HONESTLY, IT LOOKS A LITTLE BIT POLITICALLY MOTIVATEDS , AN JUST FROM A FUNDAMENTAL PERSPECTIVE, WE DON'T BELIEVE THERE'S A LOT OF MARKETS WHERE UNITED WOULD BE VIOLATING TRADITIONAL ANTI-TRUST, HORIZONTAL STANDARDS. TO MAKE ANY REAL CASE IS GOING TO RELY ON MORE NOVEL, VERTICAL THEORIES OF HARM THAT THE FTC AND DOJ HAVE PROMULGATED. THEY HAVE BEEN UNSUCCESSFUL IN THOSE IN THE COURTS OF LATE. >> GARY TAYLOR, TD COWEN SENIOR EQUITY RESEARCH ANALYST. GOOD TO TALK TO YOU TODAY. APPRECIATE YOU STOPPING BY. >> GREAT. THANKS FOR HAVING ME. >>> COMING UP, WW INTERNATIONAL SHEDDING REVENUE AND A BIG NAME FROM ITS BOARD. MORE ON THAT STORY AFTER THE BREAK. >>> WENDY'S IS PUSHING BACK AGAINST CLAIMS ITS IMPLEMENTING SURGE PRICING IN ITS MENU, IN A RECENT EARNINGS CALL, KIRK TANNER ANNOUNCED PLANS TO INTEGRATE AI IN ITS MENUS TO GIVE THE FAST FOOD CHAIN IN HIS WORDS FLEXIBILITY IN ITS OFFERINGS. THE COMPANY NOW SAYS THAT'S NOT THE EQUIVALENT OF RAISING PRICES BASED ON DEMAND. WHO'S FOLLOWING THIS STORY FOR US. WHEN WE HEAR SURGE PRICING, WE THINK ABOUT UBER, THE PRICES GO UP WHEN DEMAND IS HIGHER. WENDY'S SAYING THAT'S NOT WHAT WE INTENDED AT ALL. >> WENDY'S SAYING THAT EXACTLY. AND YOU HAVE SEEN THE MEMES ACROSS THE INTERNET WHERE PEOPLE SAID, HEY, CAN I PAY ABOUT $2 LESS, THE PRICE OF A BACONATER THAT IT WAS TWO HOURS AGO. WENDY'S SAYS THAT'S NOT THE CASE, AND NO PLANS TO RAISE PRICES WHEN CUSTOMERS ARE VISITING THE MOST. RATHER THEY PLAN TO USE AI TECHNOLOGY, LIKE YOU SAID, TO HAVE THE FLEXIBILITY TO CHANGE MENU ITEMS ON DIGITAL MENU BOARDS AND OFFER VALUE AND DISCOUNTS DURING THE DAY. THIS KICKED OFF WHEN CEO KIRK TANNER SAID BEGINNING AS EARLY AS 2025, WE'LL BEGIN TESTING ENHANCED FEATURES, LIKE DYNAMIC PRICING, THEY CALLED IT, AND DAY PART OFFERINGS, ALONG WITH AN AI ENABLED MENU CHANGES AND SUGGESTIVE SELLING. THAT, ALONG WITH PLANS TO INVEST $20 MILLION TO ROLL OUT DIGITAL MENU BOARDS TO ALL U.S.-COMPANY OWNED RESTAURANTS AND PLANS TO INVEST $10 MILLION OVER THE NEXT TWO YEARS TO SUPPORT DIGITAL MENU BOARD ENHANCEMENTS. THAT INCLUDES ORDER ACCURACY AND UPSELLING OPPORTUNITIES, WHICH MEANS SUGGESTIONS TO CUSTOMERS, HEY, DO YOU WANT TO ADD A FROSTY OR COLD BREW OR WATER, AMONG OTHER MENU ITEMS TO YOUR ORDER. THEY HOPE BY CHANGING MENU OPTIONS AND IMPLEMENTING VALUE THROUGHOUT THE DAY, AND LURING IN MORE CUSTOMERS DURING SLOWER TIMES OF THE DAY, BREAKFAST AND AFTERNOON. THIS HAS CREATED A LIFE OF ITS OWN. CREATED SO MUCH BUZZ ACROSS THE INTERNET ABOUT HOW MUCH AI TECHNOLOGY CAN IMPACT THE WAY FAST FOOD COMPANIES OFFER VALUE, SET PRICING, AND ULTIMATELY ENGAGE WITH CONSUMERS, TAKING A LIFE OF ITS OWN, NOW WENDY'S SAYING, HEY, WE'RE NOT RAISING PRICES DURING THE BUSIEST TIMES OF DAY. >> OKAY. IT'S GOING TO BE A LOT OF EYES ON THE MENU BOARD. BROOKE DiPALMA, THANKS SO MUCH. >>> WELL, WW INTERNATIONAL BETTER KNOWN AS WEIGHT WATCHERS SHARES TUMBLING TODAY. THIS COMES AFTER OPRAH SAYS SHE WILL NOT STAND FOR REELECTION ON THE COMPANY'S BOARD IN MAY. THE HEALTH MANAGEMENT COMPANY REPORTING FOURTH QUARTER REVENUE DOWN 7.6% COMPARED TO A YEAR AGO. FOR MORE ON THIS, LET'S BRING IN D.A. DAVIDSON MANAGING DIRECTOR, LINDA, IT'S GOOD TO TALK TO YOU. THE CONTEXT OR THE BACKGROUND TO ALL OF THIS IS, OF COURSE, OPRAH HAS ACKNOWLEDGED THAT SHE HAS BEEN ABLE TO LOSE A LOT OF WEIGHT, USING THOSE GLP-1 DRUGS. YOU'VE GOT STILL WHAT LOOKS TO BE A BULLISH PRICE TARGET ON WEIGHT WATCHERS. YOU CHANGING THAT TARGET AT ALL IN LIGHT OF WHAT'S PLAYED OUT TODAY? >> NO, NOT AT ALL. IN FACT, I RAISED MY OPERATING PROFIT ESTIMATE IN 2024 BY 20%. AND SO I KEPT MY 2025 EPS ESTIMATE THE SAME AT $0.60 A SHARE. REALLY MY PRICE TARGET STAYS THE SAME. I DO THINK THAT THERE'S A LOT OF MEDIA ATTENTION TODAY BEING PUT ON THE WHOLE OPRAH ISSUE. BUT SHE HAS BEEN REDUCING HER STAKE IN THE COMPANY FOR QUITE A WHILE NOW AND DISTANCING HERSELF. AND ACTUALLY THE PRESS RELEASE SAID PART OF THE REASON SHE IS STEPPING OFF THE BOEARD AND DONATING HER REMAINING STAKE IS SHE DOESN'T WANT THERE TO BE THE APPEARANCE OF A CONFLICT OF INTEREST AS SHE TALKS ABOUT THE USE OF THE GLP-1 WEIGHT LOSS DRUGS. THERE'S A LOT OF ATTENTION ON THAT AND NOT THE OPERATING RESULTS OF THE COMPANY, WHICH ARE ACTUALLY IMPROVING. >> SO THE OPRAH DECLINE, WE SHOULD SAY, THAT MAY BE A LITTLE OVER SOLD, BUT THERE HAVE BEEN REAL CONCERNS HERE ABOUT WEIGHT WATCHERS AND ITS ABILITY TO COMPETE IN THE MARKET IN LIGHT OF THE SURGE WE HAVE SEEN IN DEMAND OF GLP-1 DRUGS. WHAT DO YOU THINK INVESTORS ARE M MISSING? >> I THINK WHAT INVESTORS ARE MISSING IS THERE HAS BEEN A TURN AROUND IN THE CORE BUSINESS. THE GLP-1 AND THE CLINICAL BUSINESS IS AN IMPORTANT PART OF THE STORY BUT CERTAINLY NOT THE WHOLE STORY. WE ESTIMATE THE TL 1 BUSINESS WILL REPRESENT 20% OF REVENUE IN 2025. SO THE MAJORITY OF THE BUSINESS IS STILL THE CORE BUSINESS. PEOPLE HAVE BEEN CONCERNED WITH DECLINES IN THE LAST FEW YEARS, BUT THAT BUSINESS HAS ACTUALLY STABILIZED AND IS GROWING CORE SUBSCRIBERS, AND SO I THINK THAT'S KIND OF WHAT PEOPLE ARE MISSING HERE, IS THAT YOU'VE GOT AN IMPROVING CORE BUSINESS, AND THEN YOU'VE GOT THE ADDED ICING ON THE CAKE OF THE RAPID GROWTH OF THEIR CLINICAL BUSINESS. >> SO LET'S GO BACK TO THAT PRICE TARGET YOU MENTIONED. $12.50 A SHARE IS WHAT YOU'RE LOOKING AT RIGHT NOW. WHAT ARE THE KEY CATALYSTS THAT WILL GET IT THERE WHEN YOU CONSIDER WHERE THE STOCK IS TRADING TODAY? >> SURE. WELL, I'VE ACTUALLY GOT LOW SINGLE DIGIT CORE REVENUE GROWTH IN 2024. AND THEN IN 2025, I'VE GOT 10% REVENUE GROWTH BECAUSE THAT'S WHEN CLINICAL BECOMES A BIGGER PORTION, AND CLINICAL WILL PROBABLY STILL GROW 50%, I WOULD SAY, IN 2025. SLOWER THAN IT IS NOW. BUT STILL A GOOD GROWTH RATE. ALSO THEIR GROSS MARGIN IS EXPANDING QUITE A BIT. AS THE BUSINESS SHIFTS FROM WORKSHOP TO DIGITAL. AND AS THEY IMPROVE THE SCALE, THAT GROSS MARGIN WILL GO CLOSE TO 40%. YOU HAVE A NUMBER OF GROSS MARGIN DRIVERS, YOU'VE GOT IMPROVING TOP LINE PERFORMANCE, AND RIGHT NOW, WE ARE PROVING THEY CAN KEEP MARKET SPENDING STABLE AND DO THE GROWTH INITIATIVES THAT THEY'RE PLANNING! LI LINDA BOLTEN WISER, MANAGING DIRECTOR, IT'S GOOD TO GET YOUR TAKE. THANKS FOR JOINING US. >>> CAVA CRUSHING SAME STORE SALES EXPECTATIONS. WE'RE GOING TO SPEAK WITH THE CEO, BRETT SCHULMAN AFTER THIS SHORT BREAK. >>> IT'S A JAM PACKED HOUR FOCUSING ON THE BIGGEST MOVERS AND SHAKERS ON WALL STREET. >> THIS IS MARKET DOMINATION, AND HERE EVERY DAY IS GAME DAY. >> WE HAVE ONE HOUR LEFT UNTIL THE MARKET CLOSE. >> IT'S GAME TIME FOR INVESTORS TO MAKE THEIR FINAL PLAYS. >> THE CLOCK IS TICKING AND WE'VE GOT YOU COVERED WITH YOUR QUARTER-BY-QUARTER PLAYBOOK. >> WE'RE BRINGING YOU IN ON ALL THE MARKET ACTION. >> WITH STEP-BY-STEP ANALYSIS OF OUR BIGGEST TRENDING TICKERS. >> AND EXPERT INSIGHT INTO THE DAY'S BIGGEST HEADLINES. >> WE'LL BRING YOU THE CLOSING BELL AND GET YOU TO THE FINISH LINE. >> THIS IS "MARKET DOMINATION," TUNE IN DAILY FROM 3:00 TO 4:00 P.M. EASTERN. >>> SHARES OF CAVA HITTING A NEW HIGH TODAY. THE FAST CASUAL CHAIN DOUBLING DOWN ON GROWTH NOW PLANNING TO OPEN ANOTHER 48 TO 52 LOCATIONS THIS YEAR. THAT WOULD BRING ITS TOTAL FOOTPRINT TO 309 STORES. CAVA SHOWING STRONG CUSTOMER TRAFFIC IN THE LATEST REPORT WITH SAME-STORE SALES CLIMBING MORE THAN 11%. FOR MORE ON THE COMPANY, WE'RE JOINED BY CAVA CEO, BRAD SCHULMAN, ALONG WITH BROOKE DiPALMA. WE'RE TALKING ABOUT A BUMP IN THE STOCK TODAY. OVERALL YEAR TO DATE, YOUR STOCK IS UP ABOUT 38%. WHAT DO YOU THINK INVESTORS ARE LOOKING ABOUT THIS GROWTH STORY? >> IT'S GREAT TO BE WITH YOU. AND I THINK WHAT PEOPLE ARE SEEING IS THAT OUR RESULTS ARE REFLECTIVE OF OUR ABILITY TO DEMONSTRATE THE POWER OF OUR CATEGORY DEFINING BRAND, THE UNIQUE MEDITERRANEAN CUISINE WHERE TASTE AND HEALTH UNITE. THE EXTRAORDINARY POTENTIAL IN FRONT OF US AND THE WAY THE TEAM WAS ABLE TO DELIVER OUTSTANDING RESULTS AND EXPAND ON OUR STRATEGY ACROSS THE COUNTRY. >> YOU'RE WORKING TOWARD A LONG-TERM GOAL OF 1,000 RESTAURANTS BY 2032. WHAT IS THE RIGHT CADENCE OF OPENINGS HERE, AND WITH THE PROJECTION OF 38 TO 52, DO YOU ANTICIPATE YOU'LL RAMP UP IN 2025? >> WE HAVE STATED WE ARE PROJECTING 15% COMPOUND ANNUAL UNIT GROWTH WITH A GOAL OF A THOUSAND RESTAURANTS BY 2032. IT'S A BIT OF A MODERATION FROM 2023, WHICH IS WHY WE FEEL COMFORTABLE ABOUT OUR PIPELINE. >> AND PEOPLE ORDERING IN PERSON AT THESE RESTAURANTS IS ACTUALLY MORE THAN THE PEOPLE ORDERING ONLINE. YOU DON'T HEAR THAT TOO MUCH THESE DAYS AS WELL. BUT AS YOU THINK ABOUT THE VAUNT DESIGN MOVING FORWARD, WHAT IS THAT OPTIMAL MIX OF PEOPLE ORDERING ONLINE AND IN PERSON. DO YOU ANTICIPATE A SHIFT HERE OR AN INCREASE ON EITHER PART? >> WE HAVE SEEN IT BE PRETTY CONSISTENT. 64% OF OUR GUESTS CHOOSE TO COME INTO THE PHYSICAL SPACE TO INTERACT WITH US. 36% OF THE TIME, THEY WANT TO OPT INTO DIGITAL CHANNELS. HAVING THE MEDITERRANEAN CUISINE BROUGHT TO THEIR DOOR. OR THE PICKUP LANES, WALKING IN AND PICKING IT UP OFF THE SHELF AFTER THEY HAVE ORDERED ON THE DIGITAL APP. WE THINK IT'S AN ACCOUNT. WE CAN HAVE GREAT PHYSICAL CHANNEL. OUR CUISINE WORKS AT LUNCH, IT WORKS AT DINNER. IT WORKS FOR SINGLES, WORKS FOR FAMILIES. WHAT WE FIND IS OUR GUESTS, WE WANT TO GIVE THEM A MULTICHANNEL ENVIRONMENT. THEY CAN OPT INTO THEIR CHANNEL OF CHOICE DEPENDING ON WHAT DAY THEY WANT TO ENGAGE WITH US HERE ON. >> BRETT, HERE IN CALIFORNIA WHERE I AM. WE ARE EXPECTING A BIG BUMP IN WAGES FOR FAST FOOD WORKERS, GOING FROM $15.50 AN HOUR TO $20 AN HOUR. THAT'S A SIGNIFICANT BUMP. WHAT DOES THAT MEAN FOR CAVA BOTTOM LINE, AND ARE YOU CONCERNED THAT THIS COULD TRICKLE DOWN INTO OTHER STATES WHO ARE LOOKING AT CALIFORNIA, THE ORGANIZATION AMONG THE WORKERS TO SEE IF THE WAGES COULD GET PUSHED HIGHER IN OTHER STATES AS WELL. >> WE HAVE TAKEN THE PHILOSOPHY OF INVESTING IN OUR TEAM MEMBERS, OUR GUESTS AND THAT CREATES LONG-TERM SHARED VALUE. WE CAN GO ALL THE WAY BACK TO OUR EARLY DAYS WHEN WE TOOK OUR STARTING NATIONAL WAGE TO $13 AN HOUR. MANY OF OUR PEERS WERE PAYING 9 AND $10 AN HOUR IN THE MARKET WE WERE OPERATING IN. SIGNIFICANT WAGE INCREASES SINCE THEN. AS IT PERTAINS TO SOUTHERN CALIFORNIA, WE HAVE TALKED ABOUT WE'RE GOING TO ABSORB THAT 30 BASIS POINT IMPACT. WE VIEW IT AS AN INVESTMENT IN OUR TEAM THAT WILL CREATE RESTAURANT LEVEL MARGIN GROWTH OVER THE LONG HAUL. >> WHAT'S THE ASSUMPTION THE COMPANY IS OPERATING UNDER, THOUGH? IS THIS SPECIFIC TO SOUTHERN CALIFORNIA, AS YOU SAID, OR ARE YOU LIKELY TO SEE SEE THOSE WAGES PUSH HIGHER IN OTHER STATES TOO? >> WELL, WE'VE ALWAYS ASPIRED TO PAY BETTER THAN AVERAGE WAGES AND BE COMPETITIVE AND HAVE ATTRACTIVE WAGES. WE'RE CONSTANTLY REVIEWING THAT TO MAKE SURE WE'RE COMPETITIVE AND ATTRACTING OUR TEAM MEMBERS AND SUPPORTING IT, WHETHER IT'S WITH THE HEADLINE WAGE OR SUPPLEMENTARY AND ANCILLARY HEADLINES. PAID TIME OFF TO VOTE IN THE ALL IMPORTANT PLEKS ELECTION WE HAV COMING UP IN NOVEMBER. OR COMMUNITY AS MUCH AS. >> BRETT, YOU DID INCREASE MENU PRICES BY 3.THIS JANUARY OF THIS YEAR. WHAT IS THE COUNTRY AVERAGE FOR A CAVA PITA WRAP OR A BULL. AND DO YOU ANTICIPATE THAT CHANGING THIS YEAR? >> WE TOOK ABOUT 2 1/2 TO 3%. THE ONLY PLANNED INCREASE WE HAVE FOR THE YEAR, AND AS I MENTIONED, WE DO NOT PLAN TO TAKE ANY OUTSIDE PRICE TO OFFSET THE IMPACT OR UNPLANNED INCREASES IN CALIFORNIA. AND THE AVERAGE PPA IS AROUND $14, AND THIS INCLUDES MANY PREMIUM ATTACHMENTS. WE HAVE TALKED ABOUT THE GROWTH IN ADD ONES, CRAVABLE PETE THAT CHIPS. IT HAS ALLOWED PEOPLE TO TRADE UP TO THE PREMIUM OPTIONS AND STAY WITHIN THEIR BUDGETS TOO. >> WHAT'S YOUR SENSE ON HOW MUCH PRICING POWER YOU HAVE, WHEN YOU CONSIDER HOW MUCH YOUR CUSTOMERS ARE SPENDING IN STORES. >> WE THINK WE HAVE PRICING ELASTICITY. WE DON'T WANT TO TAKE IT BECAUSE IT'S THERE. WE WANT TO PUT THE BEST VALUE PROPOSITION FORWARD FOR OUR GUESTS. HE SAW THE DATA, FOOD A PERCENTAGE OF DISPOSABLE INCOME. WE WANT CAVA TO BE A PLACE WHERE THEY CAN COME AND GET A LITTLE RELIEF FROM THOSE COST PRESSURES AND GET A GREAT VALUE FOR WHAT THEY'RE MEASURING AND A GREAT VALUE FOR THEIR DOLLAR AND THEIR BODY AS WELL. >> I WANT TO QUICKLY HIT ON THE COST OF YOUR FOOD BASKET RIGHT NOW. YOU ARE ROLLING OUT STEAK NATIONALLY THIS YEAR, HOW WILL THIS IMPACT THE COST OF YOUR CURRENT FOOD BASKET? >> YEAH, SO WE SEE IT AS DOLLAR MARGIN NEUTRAL. MAYBE NOT DOLLAR PERCENTAGE NEUTRAL. BUT DOLLAR MARGIN NEUTRAL. OUR STEAK OFFERING IS A PREMIUM ITEM, AND WILL BE PRICED AS SUCH. AGAIN, WE SEE IT AS DOLLAR MARGIN NEUTRAL TO OUR BASKET. >> BRETT, I WANT TO GO BACK TO THE QUESTION AROUND SORT OF WAGE INCREASES, BUT IT IS REALLY ABOUT COST INCREASES OVERALL. WE HAVE SEEN MORE AND MORE FAST FOOD OPERATIONS, INTEGRATE AUTOMATION, ESPECIALLY WITH THE ADVANCEMENT OF AI. HOW ARE YOU THINKING ABOUT THAT PIECE RIGHT NOW, AND THE INVESTMENTS THAT YOU'RE MAKING ON THAT FRONT? >> YEAH, WE WANT TO ALWAYS INCORPORATE TECHNOLOGY TO ENHANCE THE HUMAN EXPERIENCE, NOT NECESSARILY REPLACE IT, BUT MAKE OUR RESTAURANT OPERATIONS MORE PRODUCTIVE. BE ABLE TO PUT THAT GREAT VALUE PROPOSITION IN FRONT OF OUR GUESTS. TWO EXAMPLES OF THAT. ONE, SUPER EXCITED THAT WE BROUGHT ONLINE LAST MONTH, OUR NEW STATE OF THE ART, 55,000 SQUARE FOOT PRODUCTION FACILITY IN SOUTHWEST VIRGINIA. THIS IS IN ADDITION TO OUR WHERE WE CREATE OUR CHEF CRAFTED DIPS AND SPREADS, THATAND WE DO AT QUALITY AND COMPLEXITY, AND DELIVER THE GREAT VALUE TO OUR GUESTS. OUR FACILITIES WILL SUPPORT AT LEAST 750 RESTAURANTS AND ADDITIONAL GROWTH, SO THAT'S ONE EXAMPLE, AND THEN AS IT RELATES TO AI, WE ANNOUNCED OUR CONNECTED KITCHEN INITIATIVE, WHICH WE'RE EMBARKING ON A MULTIYEAR JOURNEY WHERE WE WERE WE CAN TAKE OUR FOUNDATIONAL LABOR DEPLOYMENTS AND TAKE ON TOP THE USE OF DATA AND GENERATIVE AI MODELS TO GET MORE SOPHISTICATED AND EFFICIENT AND OPTIMIZED WITH THINGS LIKE PREDICTIVE PREP, LABOR SCHEDULING AND INVENTORY ORDERING. SO AGAIN, IT TAKES THE COMPLEXITY OFF OF OUR TEAM MEMBERS' PLATE. PUTS THEM IN A POSITION TO BE MORE SUCCESSFUL AND DELIVERING GREAT FOOD, GREAT SERVICE. MINIMIZE OUT OF STOCKS. MINIMIZE FOOD WASTE AND BRING JUST IN TIME FRESH FOOD TO OUR GUESTS, WHICH ULTIMATELY DELIVERS AN ENHANCED GUEST EXPERIENCE, KEEPS OUR GUESTS COMING BACK MORE FREQUENTLY. >> WHEN WE FIRST CHATTED WHEN YOU WENT PUBLIC IN JUNE, YOU SAID YOU HAD NO PLANS TO INCREASE YOUR CPG BUSINESS. DO YOU PLAN TO RAPIDLY PROVIDE GROWTH IN THE CPG BUSINESS? COULD WE SEE DIPS POPPING UP IN OTHER GROCERY RETAILERS THIS YEAR AND IN ADDITION TO THAT, ARE YOU EYEING ANOTHER FACILITY, DESPITE THE FACT THAT 750 IS QUITE A WAYS AWAY? >> YEAH, SO WE ARE IN ABOUT 650 GROCERY OUTLETS TODAY, AND WE ARE SLOWLY GROWING THAT BUSINESS. THE NEW FACILITY IN SOUTHWEST VIRGINIA GIVES US PRODUCTION CAPACITY TO HAVE THAT OPTIONALITY. AGAIN, NO CURRENT PLANS, LOOKING FORWARD TO TAKING ADVANTAGE OF THE OPPORTUNITY DOWN THE ROAD. >> BRETT SCHULMAN, CAVA CEO JOINING US ALONGSIDE OUR VERY OWN BROOKE DiPALMA. THANK YOU SO MUCH FOR JOINING US TODAY. >> THANKS FOR HAVING ME. >>> LET'S DO A FINAL CHECK OF WHERE THE MARKETS ARE TRADING ON THE BACK OF THAT PCE DATA THAT CAME DOWN TODAY. THE DOW STILL DOWN JUST SLIGHTLY HERE, THE S&P 500 AND NASDAQ FIRMLY IN THE GREEN. THAT DOES IT FOR ME THIS HOUR. MUCH MORE TO COME ON YAHOO! FINANCE. KEEP IT RIGHT HERE.
