# Under Armour Cuts Sales View on Softer Demand Around the World

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 7 Aug 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/5e5132ee-e0b4-4e8d-ba5b-b49f01164112/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Scarlet Fu, Stacey Vanek Smith, and John Tucker -Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, discusses Under Armour forecasting a sharper revenue decline than previously expected as demand softens in several key regions. The athletic retailer now expects sales to fall by a mid-single digit percentage rate for the year. - Matthew Schettenhelm, Bloomberg Intelligence Media Litigation Analyst, discusses The Federal Communications Commission voting to repeal a nationwide audience cap that limited the number of TV-viewing households a single broadcaster could reach. FCC Chairman Brendan Carr argued that the rule relaxation is necessary to help broadcasters stay competitive and promote local news coverage. -Nathan Naidu, Bloomberg Intelligence Technology Research Analyst, discusses Take-Two earnings. According to Bloomberg Intelligence: Take-Two's fiscal 2Q bookings guidance is 7-10% below consensus as Zynga softness persists, while Grand Theft Auto VI's Nov. 19 launch means revenue is back-loaded in 2H. -Michael Halen, Bloomberg Intelligence Senior Restaurant and Foodservice Analyst, recaps earnings from Wendy’s and Sweetgreens. The Wendy’s Co. withdrew its 2026 outlook and cut its dividend as its new chief executive devises a recovery plan for the beleaguered brand. Sweetgreen Inc. cut its annual outlook due to reduced consumer demand for fresh prepared foods during the cyclospora outbreak. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
[0:10] Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am
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[0:23] Speaker 2: All right, well, let's talk about one of the big
[0:26] Speaker 2: businesses or one that aspires me a big business, and
[0:29] Speaker 2: that would be under Armour. It's the ath leisure company
[0:31] Speaker 2: Athletic where company maybe at Leisure is pushing it a
[0:33] Speaker 2: little bit. Punam Goyela's senior US e commerce and retail
[0:37] Speaker 2: analysts here at Bloomberg Intelligence, and Pam under Armour. It
[0:41] Speaker 2: feels like it's been this reorganization restructuring story for a while.
[0:46] Speaker 1: Now.
[0:46] Speaker 3: Where are we.
[0:47] Speaker 2: In that reorganization restructuring story for under Armorth because the
[0:52] Speaker 2: stock performance today shows that there's still some way to go.
[0:58] Speaker 4: I've been through this turnaround story several times over the
[1:02] Speaker 4: past two decades, so clearly it's happening once again. Now,
[1:07] Speaker 4: what I'd say for them, you know, I think they
[1:09] Speaker 4: are focused on the right things the question as well.
[1:11] Speaker 4: The consumer respond right sizing. Inventory is down just three
[1:15] Speaker 4: percent in line with the sales decline is a positive sign.
[1:19] Speaker 4: That said, it was interesting that they called out that
[1:21] Speaker 4: the consumer is actually weak because when I look at competitors,
[1:25] Speaker 4: some of the larger ones like Atiightos and Nike, they're
[1:28] Speaker 4: actually doing pretty fine in North America, and I think
[1:32] Speaker 4: that may have to do with just their bigger boat
[1:35] Speaker 4: and also the World's Cup and their bigger presence there.
[1:38] Speaker 5: Yeah, I was wondering about why demand was softening with
[1:41] Speaker 5: under Armour. I know under Armours kind of a middle
[1:43] Speaker 5: of the market brand, is part of what's happening here.
[1:46] Speaker 5: Maybe that the demand for kind of middle of the
[1:49] Speaker 5: road brands is softening. Well, maybe demand for higher end
[1:54] Speaker 5: brands is gaining ground, or is it something else entirely, Yeah.
[1:59] Speaker 4: I think it's it's a mix a few things. So first,
[2:01] Speaker 4: I do think that it has to do with the
[2:03] Speaker 4: higher end customer is doing better than the midd or
[2:06] Speaker 4: the Laurent. So we do see that across the spectrum.
[2:09] Speaker 4: That said, under Armour, while it is middle of the class,
[2:12] Speaker 4: you know, it's not Nike Adidas, but it is still
[2:15] Speaker 4: a strong brand when you think of at leisure, especially
[2:19] Speaker 4: compared to like some of the other brands that are
[2:21] Speaker 4: up and coming. I think under Armoured does still in
[2:24] Speaker 4: North America have across the board, not just in Metro
[2:28] Speaker 4: City's a name. That said, I do think the last
[2:31] Speaker 4: quarter weakness does stem a little from just when you
[2:35] Speaker 4: think about what was going on, especially in the US,
[2:37] Speaker 4: it is all about the World Cup, and under Armoured
[2:40] Speaker 4: doesn't really have a meaningful presence there, so when consumers
[2:44] Speaker 4: are shopping the stores, when they're going online, it's just
[2:48] Speaker 4: not the brand that comes front and center. That said,
[2:51] Speaker 4: under Armour is largely apparel, right with the exit of
[2:55] Speaker 4: Steph Curry, so that different sheets it from our Nike
[2:58] Speaker 4: and Aditas, which are predominantly footwear brands with an apparel offering.
[3:02] Speaker 2: I'm so glad you brought up Steph Curry because I
[3:04] Speaker 2: feel like that's how a lot of people encountered under
[3:08] Speaker 2: Armour if they weren't wearing, you know, the cold Tech
[3:11] Speaker 2: or heat tech shirts that the company made. What do
[3:15] Speaker 2: we know about what happened there and how under Armours
[3:18] Speaker 2: thinking about maybe replacing or finding another celebrity endorser or
[3:22] Speaker 2: celebrity partner to work with it.
[3:25] Speaker 4: So I think replacing Steph Curry isn't an easy task
[3:29] Speaker 4: because when they signed Steph Curry, Steph Curry wasn't the
[3:31] Speaker 4: Steph Curry that we know today, right. It was a
[3:34] Speaker 4: younger talent and it was also probably more in line
[3:38] Speaker 4: with what they could afford, as Nike and Adidas have
[3:40] Speaker 4: deeper pockets and under armour to support some of these
[3:44] Speaker 4: brand collaborations. That said, I think the focus now is
[3:47] Speaker 4: on just developing the right product. If they're going back
[3:50] Speaker 4: to their DNA, they're going back to the basics, which is,
[3:52] Speaker 4: can we develop a product that speaks for itself and
[3:55] Speaker 4: it doesn't need a brand a master. It's a hard
[3:58] Speaker 4: task and yes you can do that for some things,
[4:01] Speaker 4: but in at leisure, you do need that brand endorsement,
[4:05] Speaker 4: that athlete credibility to really rise further along for them.
[4:10] Speaker 4: I think the one product that they've been talking a
[4:12] Speaker 4: lot about, they actually talked about it several times on
[4:15] Speaker 4: the call, was a bouncy T shirt, which is an
[4:19] Speaker 4: it's a really cool product that they've developed and it's
[4:21] Speaker 4: innovative where you can wear this T shirt. You can
[4:24] Speaker 4: wear it to the gym, you can wear it to
[4:26] Speaker 4: the bar, and you can wear it every day and
[4:28] Speaker 4: it kind of fits the whole spectrum of your lifestyle.
[4:32] Speaker 4: So that T shirt is doing really well and they're
[4:34] Speaker 4: looking to use that as a stepping board to kind
[4:38] Speaker 4: of launch more products and really drive customer interest.
[4:42] Speaker 2: Okay, the bouncy T shirt, I'm looking online sixty five
[4:45] Speaker 2: dollars and it has a four point nine star rating.
[4:50] Speaker 2: This is just a plain T shirt that you know,
[4:52] Speaker 2: looks good enough to wear.
[4:53] Speaker 6: The bounces.
[4:54] Speaker 2: I don't understand how a T shirt can bounce. I'm
[4:57] Speaker 2: not sure why it's called bouncecad you wear.
[4:59] Speaker 4: That the fabric it doesn't stick to you.
[5:01] Speaker 5: Does it like deal with your sweat or is it
[5:04] Speaker 5: just that its style is such that.
[5:09] Speaker 7: You could wear to the gym then out.
[5:11] Speaker 3: Yeah, is this a performance wear?
[5:14] Speaker 4: It's everything. It's performance, it's going out and it's every day,
[5:17] Speaker 4: which is what makes us so versatile. And that's what
[5:19] Speaker 4: the that's what they're basically saying that this is a
[5:21] Speaker 4: versatile T shirt that you can go to the bar
[5:24] Speaker 4: on Friday night, you can wake up and go to
[5:25] Speaker 4: the gym Saturday morning, and then you could wear throughout
[5:28] Speaker 4: the day. It works for everything, and it's done really
[5:31] Speaker 4: really well for them. It is I would say, you
[5:33] Speaker 4: know something that's working and if they continue to innovate
[5:36] Speaker 4: in this manner more extensively, they could start to gain
[5:40] Speaker 4: some traction. But that's not going to happen overnight. I
[5:43] Speaker 4: think there's still, you know, to your original question, a
[5:45] Speaker 4: long way to still go from here before we can
[5:48] Speaker 4: say that we see a straight lineup. At this point,
[5:51] Speaker 4: it's still very mixed.
[5:53] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[6:00] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[6:04] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[6:07] Speaker 1: Auto with the Blueberg Business App. Listen on demand wherever
[6:11] Speaker 1: you get your podcasts, or watch us live on YouTube.
[6:14] Speaker 3: Through Matt Shuttenham and Matt.
[6:16] Speaker 2: You're joining us because the FCC has removed nationwide cap
[6:20] Speaker 2: limiting local TV ownership.
[6:22] Speaker 3: That's quite a headline. What does this mean in your world?
[6:26] Speaker 8: Yeah, so the media environment has changed a lot over
[6:30] Speaker 8: the past couple decades, but FCC rules haven't, and so
[6:34] Speaker 8: broadcast TV station owners for years have been stuck with
[6:39] Speaker 8: this limit on how big they can grow. The FCC
[6:44] Speaker 8: rules said no company can can reach more than thirty
[6:47] Speaker 8: nine percent of US households. And what the FCC did
[6:52] Speaker 8: yesterday is scrap that rule and say, look, we're not
[6:56] Speaker 8: going to have this numeric limit on companies. And more so,
[7:00] Speaker 8: this presents a really big opportunity for companies like Nextstar
[7:05] Speaker 8: Sinclair that own the TV stations across the US to
[7:10] Speaker 8: grow larger because they're not, you know, hamstrung by this
[7:14] Speaker 8: this long existing FCC rule anymore.
[7:18] Speaker 5: What does this mean for media consolidation? I feel like
[7:20] Speaker 5: there's always this statistic we hear that there are these
[7:23] Speaker 5: six conglomerates that now control ninety percent of US media?
[7:27] Speaker 7: Is that likely to get more extreme?
[7:29] Speaker 5: I mean, that doesn't seem like necessarily a great thing
[7:31] Speaker 5: for voters.
[7:34] Speaker 8: Right So this, you know, when you listen to FCC
[7:37] Speaker 8: Chairman Brendan Carr, he said, this is really about empowering
[7:42] Speaker 8: local TV stations so they can compete with those big
[7:46] Speaker 8: national media companies. Right now, those stations really have very
[7:51] Speaker 8: little leverage when they negotiate with ABC, CBS, NBC and
[7:57] Speaker 8: with cable companies when they have to get there their
[8:00] Speaker 8: media distributed. So in Brendan Carr's view, this is about
[8:04] Speaker 8: sort of empowering a new set of entities in that
[8:08] Speaker 8: media ecosystem, the owners of these local stations that right now,
[8:13] Speaker 8: are you know, they're they're limited or previously were limited
[8:17] Speaker 8: by this FCC rule. They could only get so big,
[8:19] Speaker 8: so they had no leverage. This gives them more of
[8:22] Speaker 8: a voice, in Brendan Carr's view, against those national media companies.
[8:27] Speaker 8: So maybe it leads to a little more competition in
[8:31] Speaker 8: that space.
[8:32] Speaker 2: So this is deregulation essentially, and the broadcast industry has
[8:36] Speaker 2: been waiting for it for a long time. Which companies
[8:39] Speaker 2: are going to jump on this and make a move.
[8:42] Speaker 8: So Nextstar has already jumped on it with its acquisition
[8:46] Speaker 8: of Tegna, but there was sort of a legal cloud
[8:50] Speaker 8: around whether they could do that. You know, by acquiring Tegna,
[8:53] Speaker 8: they went way beyond the thirty nine percent US ownership
[8:56] Speaker 8: cap and the FCC at the staff level set up,
[8:59] Speaker 8: you know, will that requirement. Don't worry about it. That
[9:02] Speaker 8: was sort of legally questionable. This is the right way
[9:05] Speaker 8: to do it, to do it through a rule making,
[9:08] Speaker 8: to actually change the rule. So it's an opportunity for
[9:13] Speaker 8: Next Star to get past legal hurdles on its Tegna acquisition.
[9:17] Speaker 8: Company like Sinclair could could also look at this. It
[9:19] Speaker 8: featured prominently in the company's earnings call a couple of
[9:23] Speaker 8: days ago. There could be opportunities to grow much larger,
[9:27] Speaker 8: go way beyond the thirty nine percent. But one big
[9:30] Speaker 8: and important footnote, there's going to be a legal challenge
[9:33] Speaker 8: to all of this that's coming next. It's not totally
[9:36] Speaker 8: clear the FCC can do what it did or whether
[9:40] Speaker 8: only Congress can do it. That's going to be the
[9:42] Speaker 8: fight that plays out next.
[9:44] Speaker 5: What is the legal challenge exactly?
[9:47] Speaker 8: So, in two thousand and four, Congress told the FCC,
[9:52] Speaker 8: let's set that limit, that ownership limit at thirty nine percent,
[9:56] Speaker 8: and it said, FCC, change your rule to make it
[9:58] Speaker 8: thirty nine percent. Question is when Congress did that in
[10:01] Speaker 8: two thousand and four, did it mean that the FCC
[10:04] Speaker 8: can't update that rule later? Is it only Congress's call?
[10:09] Speaker 8: And there are strong arguments on both sides that, you know,
[10:13] Speaker 8: the FCC says, look, we still have our power to
[10:15] Speaker 8: modify our rules. Congress didn't take that away. The other
[10:18] Speaker 8: side said no. Congress was pretty clear, we want thirty
[10:21] Speaker 8: nine and it said that five times in its statute
[10:24] Speaker 8: thirty nine percent. So it's not clear that the FCC
[10:27] Speaker 8: can use its general modification power. That's going to have
[10:31] Speaker 8: to play out in appeals court and in the Supreme Court.
[10:33] Speaker 8: Did Congress give the FCC its general discretion to update
[10:37] Speaker 8: its rules or was this a call that Congress reserved
[10:40] Speaker 8: for itself.
[10:42] Speaker 2: All right, Matt, one final question before we let you
[10:44] Speaker 2: go from where you sit Paramounts Guide Ence, Warner Brothers Discovery.
[10:49] Speaker 3: Is anything going to happen in the next couple of weeks?
[10:52] Speaker 8: Yeah, I mean so so. Lots of moving pieces on
[10:55] Speaker 8: that on the anti trust side, and jenre is really
[10:59] Speaker 8: our go to on all of those questions, so, you know,
[11:03] Speaker 8: really interesting questions there as state antitrust enforcers have stepped
[11:08] Speaker 8: up when the federal regulators have taken more of this
[11:11] Speaker 8: deregulatory approach.
[11:13] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[11:20] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[11:24] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[11:27] Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
[11:31] Speaker 1: you get your podcasts, or watch us live on YouTube.
[11:34] Speaker 2: All right, Stacey, you know a thing or two about
[11:38] Speaker 2: Grand Theft Auto the video game franchise, right.
[11:41] Speaker 7: Yeah, yeah, I mean I know, it's really huge.
[11:43] Speaker 5: I actually had a cousin who sold a song to
[11:46] Speaker 5: Grand Theft Auto, So it was one of the songs
[11:47] Speaker 5: that you might hear on the radio in a car
[11:50] Speaker 5: inside of the game, and it was a really big
[11:52] Speaker 5: deal for them. They actually make quite a bit of money.
[11:54] Speaker 5: It's a huge, very wealthy universe.
[11:57] Speaker 2: Yeah, it's a cultural I mean totally basically, so many
[12:01] Speaker 2: people live in that universe, and we're going to get
[12:04] Speaker 2: a new update Grand theftdot of six GTA six for
[12:07] Speaker 2: those in the know at some point. Nathan I do
[12:09] Speaker 2: is Bloomberg Intelligence technology research analyst, and Nathan I say,
[12:13] Speaker 2: at some point, because it feels like we've been waiting
[12:15] Speaker 2: for the release of GTA six for months, if not
[12:19] Speaker 2: a year.
[12:19] Speaker 3: I remember talking about this quarter after quarter after quarter.
[12:24] Speaker 9: Yeah. Actually, people have been waiting, especially fans. You say
[12:28] Speaker 9: cultural totem, I think it's more like a cult at
[12:30] Speaker 9: this point. People fans have been waiting for thirteen years.
[12:34] Speaker 9: That was how long ago the GTA five was released,
[12:37] Speaker 9: and there's such a strong pand up demand for this franchise. Yeah, exactly,
[12:42] Speaker 9: And even in the last thirteen years, still eighteen million
[12:46] Speaker 9: people played every single month across PC and console, and
[12:50] Speaker 9: it remains the third most played game of all time
[12:54] Speaker 9: as of March. This just tells you how much there
[12:56] Speaker 9: is a demand, and you can see the shares of
[12:58] Speaker 9: take to the parent company actually is training up today,
[13:02] Speaker 9: and that tells you that even though the guidance, which
[13:04] Speaker 9: we think is on the conservative side, peoples to believe
[13:08] Speaker 9: that the games might actually perform better than what the
[13:10] Speaker 9: company is saying.
[13:12] Speaker 5: So this might sound like a naive question, but why
[13:15] Speaker 5: did it take them so long to get this new
[13:17] Speaker 5: version of the game ready?
[13:18] Speaker 7: I am seeing here.
[13:19] Speaker 5: That the CEO has said that the expectations around this
[13:22] Speaker 5: are quote terrifying.
[13:25] Speaker 9: Yeah, it's it is quite terrifying, because you know, there
[13:29] Speaker 9: is a lot of estimates pointing to I mean as
[13:33] Speaker 9: much as many as eighty five million unit sales at
[13:35] Speaker 9: the top and based on salesize estimates. But I'm a
[13:38] Speaker 9: lot more conservative on that front. And why it takes
[13:42] Speaker 9: the company so long. It's a huge production. It takes
[13:46] Speaker 9: more than a billion just to develop the game, and
[13:49] Speaker 9: for contacts. I think a Star Wars or the Avengers
[13:56] Speaker 9: movie like costs like half a billion. And it's it's long.
[14:01] Speaker 9: There's a lot of aspects that go into the game.
[14:04] Speaker 9: Is not just selling it upfront. It's also sustaining recurring
[14:07] Speaker 9: sales for more than ten years. I mean because GTA
[14:10] Speaker 9: five continued to perform in the last thirteen years, and
[14:13] Speaker 9: every year it continued to turn out you know, three
[14:17] Speaker 9: hundred to four hundred million in revenue to take to
[14:22] Speaker 9: and rock Start, the maker of the game, even after
[14:25] Speaker 9: upfront sales was captured in the first year. And GTA
[14:29] Speaker 9: six should prove to be able to do the same.
[14:32] Speaker 9: And actually we can see in the online mode of
[14:35] Speaker 9: GTA five, which is the current version, like people still
[14:39] Speaker 9: to spend about sixty bucks a month to play the game,
[14:42] Speaker 9: and that's what context three x the standard ad free
[14:46] Speaker 9: Netflix subscription. So there's actually photos who pay, there's a
[14:50] Speaker 9: cut following, and people continue and it just can't get
[14:52] Speaker 9: enough of this game, and you know, it's high budget,
[14:56] Speaker 9: is I guess the company just want to make sure
[14:59] Speaker 9: they get it right because it's literally the make up
[15:01] Speaker 9: break game of the century.
[15:05] Speaker 3: Nathan. We only have like twenty seconds left. But I'm curious.
[15:08] Speaker 2: I'm sure they make this game available to reviewers. Do
[15:11] Speaker 2: they make it available to analysts early?
[15:14] Speaker 9: No, there's no early access, so you but there's pre
[15:18] Speaker 9: orders momentum that we can engage some early wins. Yeah, yeah,
[15:22] Speaker 9: there's pre orders, and preorders apparently is blowing past expectations,
[15:26] Speaker 9: Like New Zoo is estimating that preorders is at two
[15:30] Speaker 9: hundred or more million globally, and you know they're expecting
[15:35] Speaker 9: upward of five billion by end of November in cross sales.
[15:40] Speaker 9: I mean, Consensus is only pegging this at four billion
[15:43] Speaker 9: or below. So that tells you how Consensus even is
[15:46] Speaker 9: being a bit conservative on that front.
[15:50] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[15:57] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[16:01] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[16:04] Speaker 1: Auto with the Blueberg Business app. Listen on demand wherever
[16:07] Speaker 1: you get your podcasts, or watch us live on YouTube.
[16:12] Speaker 6: You know, on a day like today, what would be
[16:14] Speaker 6: better than a Frosty very little? Have you ever had one?
[16:17] Speaker 5: Of course, of course I've had Frosty's.
[16:21] Speaker 6: You know what, nothing better frost the other day like today,
[16:24] Speaker 6: But I might be the only one thinking that with
[16:26] Speaker 6: Stacy and I might be the only ones thinking about that.
[16:29] Speaker 6: Wendy's pulling us out, look also cutting their dividend. Dave
[16:34] Speaker 6: Thomas is probably rolling in his grave.
[16:36] Speaker 7: Oh I loved those ads. He was great.
[16:39] Speaker 6: What was the other one? Where's the beef?
[16:42] Speaker 9: Oh?
[16:42] Speaker 7: Where's the beef?
[16:43] Speaker 6: Michael Hanlon Bloomberg Intelligence Senior Restaurant and Food service handles
[16:47] Speaker 6: joining us. Now where's the beef? Or no, what's the beef?
[16:50] Speaker 6: With Wendy's.
[16:52] Speaker 10: Listen, I'm going to take the other side of that trade.
[16:54] Speaker 9: I bet you.
[16:56] Speaker 10: Dave Smith is somewhere smiling and Dave tom wasn't it.
[17:01] Speaker 10: I'm sorry, Dave Thomas. Yeah, it's some up there somewhere smiling.
[17:04] Speaker 10: Because new CEO Bob Wright, who had previously worked for
[17:10] Speaker 10: Wendy's for quite some time, you know, has a really
[17:13] Speaker 10: good plan to bring this brand back to glory. And
[17:16] Speaker 10: he and his new CFO Steve cerulis that they did
[17:20] Speaker 10: a phenomenal job turning around pot Bellies, and I think
[17:24] Speaker 10: it was a great first call for both of them. Yeah, sure,
[17:27] Speaker 10: they cut the dividend and they you know, retracted twenty
[17:31] Speaker 10: twenty six guidance, but that's really just to give them
[17:33] Speaker 10: some time for their turnaround plants to start gaining some traction.
[17:38] Speaker 7: So what is the turnaround plan?
[17:39] Speaker 5: Because I feel like this is such a tough moment
[17:41] Speaker 5: for food companies, I mean beyond just cyclospora, but you know,
[17:45] Speaker 5: prices are going up, margins are getting thin, consumers are
[17:49] Speaker 5: getting pickier.
[17:50] Speaker 7: What is the plan.
[17:53] Speaker 10: Yeah, that there's a lot of low hanging fruit here
[17:55] Speaker 10: because this brand has been severely mismanaged for some time.
[17:59] Speaker 10: And so number one is going to be revamping the
[18:02] Speaker 10: menu and making sure that there's everyday value on that menu.
[18:06] Speaker 10: And what I mean by value isn't necessarily price. It's
[18:08] Speaker 10: what you get for what you pay.
[18:10] Speaker 9: You know.
[18:11] Speaker 10: Bob right on the call mentioned that, you know, people
[18:13] Speaker 10: come away feeling from feeling that the experience was worth it,
[18:17] Speaker 10: you know, and being happy about their overall experience when
[18:20] Speaker 10: they leave a Wendy's restaurant or drive through. There's also
[18:24] Speaker 10: a lot of low hanging fruit in terms of operations.
[18:26] Speaker 10: Operations have slipped. We see this when chains are struggling, right,
[18:29] Speaker 10: When franchises aren't making money in a restaurant, you know,
[18:34] Speaker 10: they're gonna pull labor and then this ends up causing
[18:37] Speaker 10: you know, operations to slip further, right, and so there's
[18:40] Speaker 10: an opportunity here for some retraining, adding labor back to
[18:43] Speaker 10: the to the to the restaurants and marketing. I mean,
[18:48] Speaker 10: this chain was had done such a good job with
[18:51] Speaker 10: marketing for so long. You know, to your point, you're
[18:54] Speaker 10: talking about the old where's the beef ads, but even
[18:57] Speaker 10: you know, more recently, like they had a great online
[19:01] Speaker 10: presence with social media, very snarky Twitter account that that
[19:05] Speaker 10: got a lot of attention. You know, I remember some
[19:09] Speaker 10: years ago when when Fortnite was in its heyday, they
[19:12] Speaker 10: had a collaboration with Fortnite and they had the Wendy's
[19:17] Speaker 10: you know, a Wendy character in the game that you
[19:20] Speaker 10: could find in the kitchen of a restaurant and all
[19:24] Speaker 10: sorts of cool stuff that and and that's really falling off, right,
[19:27] Speaker 10: and so.
[19:29] Speaker 3: You know, there's there's a.
[19:30] Speaker 10: Lot you know, digital improving, the digital marketing and the
[19:34] Speaker 10: and the digital experience. Loyalty things like that are going
[19:37] Speaker 10: to be another point of ethicism. And then the last
[19:39] Speaker 10: one is like making the franchisese money, right, you have
[19:43] Speaker 10: to make your franchisese money so that they're motivated to
[19:46] Speaker 10: build no news stores.
[19:47] Speaker 3: So those are the.
[19:48] Speaker 10: Five primary points for this turnaround plan.
[19:51] Speaker 6: Okay, so they're telling the franchisees at this point be patient.
[19:54] Speaker 6: I guess that's the same message to investors. At this point,
[19:58] Speaker 6: when does it start to take How patient do they
[20:01] Speaker 6: have to be?
[20:02] Speaker 10: Well, listen, first of all, you know, I don't know.
[20:05] Speaker 10: I bet you franchisees that listened into that call were
[20:09] Speaker 10: very happy with it, right, Like what Bob said was,
[20:13] Speaker 10: you know, this chain is not run by private equity groups.
[20:18] Speaker 10: The franchisees are family owned people that he knows personally, right,
[20:22] Speaker 10: And so what he said was turning this brand around
[20:25] Speaker 10: was personal to him, right, And so you know, I
[20:30] Speaker 10: think the energy that the franchise e base is going
[20:32] Speaker 10: to be energized, right by having a guy in there
[20:35] Speaker 10: that they know that has had a lot of success
[20:38] Speaker 10: turning around Pop Belly, that did a great job when
[20:41] Speaker 10: he was with Wendy's. When Wendy's was, you know, a
[20:45] Speaker 10: pretty solid competitor in the quick service space. So I
[20:48] Speaker 10: think franchisees are happy with the change at the top.
[20:51] Speaker 10: You know, how long is it going to take. It's
[20:52] Speaker 10: going to take time. The good thing is they're lapping
[20:55] Speaker 10: really really weak comps in the second half. So management
[20:59] Speaker 10: said that Saintstar sales are going to be down similar
[21:02] Speaker 10: to what they've been down, which was down about six
[21:04] Speaker 10: percent plus in the first half in the US. We
[21:07] Speaker 10: think they're sandbagging in a little bit because comparisons are
[21:09] Speaker 10: going to get easier through your end, and we think
[21:12] Speaker 10: as a result, results are going to go from bad
[21:16] Speaker 10: to less bad, you know, but the real turnaround will
[21:20] Speaker 10: probably kick in sometime in twenty twenty seven.
[21:23] Speaker 5: Another company we've been hearing a lot about this morning
[21:25] Speaker 5: is Sweet Green.
[21:27] Speaker 7: They've just been getting hammered.
[21:29] Speaker 5: Apparently sales are way down a lot because of the
[21:31] Speaker 5: cyclospora outbreak.
[21:33] Speaker 7: What are you thinking for them?
[21:35] Speaker 6: And say in the twenty seconds, because that's all we have.
[21:39] Speaker 10: Yeah, listen, that company was in dire straits prior to cyclospora.
[21:44] Speaker 10: Obviously this impacts them a lot more than everybody else
[21:47] Speaker 10: because they sell a lot of salad, but they had
[21:49] Speaker 10: their issues heading into this outbreak.
[21:54] Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
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