Miscellaneous Earnings Call Notes

Yahoo’s (YHOO) CEO Marissa Mayer on Q2 2016 Results

Marissa Mayer is proud of the last four years

“As we work to conclude the strategic alternatives process, this groundwork will serve as a solid foundation for Yahoo!’s next chapter. I am proud of what this company has achieved of these past four years. I remain committed to our team and our company and I continue to be optimistic and passionate about the future of Yahoo!”

W.W. Grainger (GWW) Q2 2016 Results

Laura D. Brown – Senior Vice President-Communications & Investor Relations

June selling volume down 3%

“There were 22 selling days in June of 2016, the same as 2015. Company sales were flat in June versus the prior year. The sales performance included 4 percentage points from acquisitions, offset by a 3 percentage point decline from volume and a 1 percentage point decline from price. In the United States, June daily sales decreased 3%, driven by a 4 percentage point decline from volume and a 1 percentage point decline from price, partially offset by 2 percentage points from intercompany sales, primarily to Zoro. June customer end market performance in the United States was as follows: retail was flat; light manufacturing, government and commercial were down in the low single-digits; heavy manufacturing was down in the mid-single digits; contractor was down in the high single-digits; reseller was down in the mid-teens, and natural resources was down in the high-teens.”

Mattel’s (MAT) CEO Chris Sinclair on Q2 2016 Results

Kevin Farr

Brexit will have minimal impact on current results

“Brexit will only have a modest impact on our full year results. Based upon current trends, we believe the negative impact from foreign exchange will be roughly $0.02 to $0.05 of EPS for the year related to Brexit.”

QUALCOMM’s (QCOM) CEO Steve Mollenkopf on Q3 2016 Results

Favorabale demand for chipsets, especially in China

“In QCT, the favorable demand trends for our new chipsets across the mid and high-end smartphone tier, especially with the top 10 vendors in China are helping to deliver improved financial performance. We are also seeing incremental demand for our lower tier chipsets in China versus our prior expectations driven in part by our differentiated all mode and modem leadership.”

5G deployment may have been pulled forward to 2018/2019

” In general, we are obviously trying to drive 5G as quickly as we can. It’s an area which we think to be a strong player in 5G, you have to be a strong player in 4G, 3G and WiFi and consequentially we think that we will maintain a very strong IP position moving forward. The standards bodies are working on that right now. So, I think we have a lot of visibility into the strength of our submissions as well as to how the industry is unfolding. I think in general, if you’d have asked me that question, a year ago, I would have said that it would have happened closer to 2020. Certainly over the last year and accelerating here over the last quarter there has been a real pull to push that in or to pull that in closer to 2018/2019 timeframe depending on what the deployment is.”

Cohen & Steers’ (CNS) CEO Bob Steers on Q2 2016 Results

Joe Harvey

Markets sending seemingly inconsistent signals

” Markets expressed seemingly inconsistent expectations as the quarter progressed. The 10-year treasury yield declined to 1.5%, suggesting slow growth, disinflation and a flight to safety amidst Brexit concerns. Yet, oil and commodity prices continued to rally. These conflicting signals are hard to reconcile, especially in light of our view that inflation should accelerate towards 4% into 2017, driven by rising energy, rent and food prices. While part of the inflation bump should be temporary, rising wages, prospects for additional central bank and fiscal stimulus and a likelihood that commodities have entered a new bull market, suggest to us that the positive market performance in real assets will continue, while the fixed income bull market has less and less room to run”

Brexit will long term be good for the UK

” I think that Brexit over the long-term will be good for the UK. It will result in some short-term pain, probably a brush with recession. But long term, I think it’s good that they can control their own destiny apart from being tied to Europe. And in terms of commercial real estate in the UK, we are expecting prices to decline anywhere from 5% to 15% or 20% depending on the property type and the biggest declines are being expected in the office market. ”

D.R. Horton (DHI) David V. Auld on Q3 2016 Results

David V. Auld – President & Chief Executive Officer

Optimistic about CA but also Texas

“Bob, the growth we’re looking at there is at a new price point that hasn’t existed out there. And we feel very optimistic based upon the land that we’ve been able to put in front of that program. So do we feel more optimistic about California than the balance of the country? Absolutely not. I think Texas continues to be strong and our Southeast area just continues to outperform”

Miscellaneous Earnings Call Notes 2.6.16

Amazon.com (AMZN) Management on Q4 2015 Results

Brian Olsavsky

Distribution partners have not been able to handle all the capacity that we need at peak

“what we’ve found is in order to serve – properly serve our customers at peak. We’ve needed to add more of our own logistics to supplement our existing partners. That’s not meant to replace them. And those carriers are just not – no longer able to handle all of our capacity that we need at peak. They have been and continue to be great partners. And we look forward to working with them in the future. It’s just we’ve had to add some resources on our own. You mentioned trucks. The Amazon trucks, we did invest in those – this past year. We use those primarily for movement between our warehouses and our source centers.”

Microsoft (MSFT) Satya Nadella on Q2 2016 Results

Security is now a major driver of cloud adoption

“Security is now a major driver of the cloud adoption. As threats become more frequent and sophisticated, Azure’s unique technology like machine learning empower customers to adapt to these new realities.”

AI will be at the heart of every business in the future helping to understand the past and predict the future

“At the heart of every business in the future will be systems of intelligence, powerful AI that helps people understand the past and predict the future. Cortana Analytics is the building block for these systems of intelligence. ”

Flextronics International (FLEX) Michael M. McNamara on Q3 2016 Results

See weaker industrial demand pull through

“As far as the macro, what we see is kind of broadly across the industrial set of businesses particularly – probably more so in the United States, but also in Europe. We see it’s just been a challenge. We’ve started seeing the macro push probably in the September quarter. We talked a little bit about it – maybe even at the end of the June quarter. We continue to see it going into the December quarter. And our forecast for March reflects kind of a weaker industrial demand pull-through.”

United Rentals’ (URI) CEO Michael Kneeland on Q4 2015 Results

Market activity is solid and in many cases trending upward

“Beyond the current market uncertainty, we agree with the industry forecasters that there are multiple years of growth ahead for rental in North America. The latest projection from Global Insight is about 6% annual growth in construction and industrial rentals through at least 2017. And we’re seeing levels of customer activity to support this view. That point can’t be lost when revenue flattens out for reasons I mentioned earlier. So it’s important to note that our actual — market activity is solid and in many cases trending upward. And our customers are on a whole optimistic.”

Honeywell International (HON) David M. Cote on Q4 2015 Results

Not seeing negative surprises in January

“Right now, I’d have to say it feels just fine. I know last year we got surprised the other way. This year we’re not getting surprised. But it’s three weeks, so who can tell how the whole thing’s going to go? But it’s – I would say we’re not having to deal with the same kind of negative surprise we had last year.”

Big thing in aerospace for us is that flight hours continue to increase

“if you take a look at what’s happening in the aerospace industry, the biggest thing for us is that flight hours increase. And flight hours last year were up 4% or 5%. They’re likely to be up 4% to 6% again this year. And the big thing is that planes fly, and as long as they fly, and as long as there’s a need for the kind of upgrades that we keep talking about, and as long as the technology keeps progressing towards this kind of connectivity and the need for airlines and passengers to just be connected better than they have in the past, those are all good phenomena for us.”

No doubt it’s a slow growth environment

“there’s no doubt, it’s a slow growth environment. That being said, whether it’s slow growth or high growth, we believe your best bet is Honeywell ”

Colgate-Palmolive’s (CL) CEO Ian Cook on Q4 2015 Results

It’s difficult to find anybody with anything optimistic to say

“it is difficult to find anybody with anything optimistic to say about much of anything these days. Without being overly general, I would say that the underlying consumer sentiment and behavior in China and India is okay. I would say that the underlying consumer sentiment in Mexico is okay. I would say that the underlying consumer sentiment in Russia is not great. And that would be English understatement. And I would say in Brazil, the underlying sentiment in Brazil is not great.”

Mattel (MAT) Christopher A. Sinclair on Q4 2015 Results

Richard Dickson – President and Chief Operating Officer, Mattel, Inc.

Barbie still relevant

“never has Barbie been more diverse on so many dimensions and more celebrated. TIME Magazine’s cover story and associated buzz last week are great examples that underscore not only how powerfully relevant the Barbie brand is, but reinforce that we’re on the right track.”

Ralph Lauren (RL) Stefan Larsson on Q3 2016 Results

Our performance over the last couple of years has been very disappointing

“And when I looked at our performance over the last couple of years, including the recent quarters, it’s very disappointing. So I see significant untapped value in both the idea behind the brand and as well as how we drive the business. And therefore, in the way I outlined the way we approach, building the growth plan for the future, there will be a customer facing component which is about evolving the brand, evolving our product, marketing, shopping experience, and then radically improve some of our business engines. ”

The consumer is now in charge in retail

“When it comes to the disruption, I’m a firm believer that we’re just seeing the beginning. So I believe that the biggest disruption is that the customer is now in charge. So the customer has better visibility and better choices than ever before. So any company that’s in the business of providing generic products or don’t have any real value add beyond the lower and lower price or who, more importantly, is not close enough to the customer will be in trouble. So that’s why we are building on the strength that’s made us great, and we are adding an even closer focus to what’s going on in the market and what’s going on with the customer.”

Mattel 1Q15 Earnings Call Notes

New management working on turnaround

“I have been deeply engaged inside the company and with the board and our management developing a comprehensive plan for a rapid turnaround of Mattel. Now, simply put, our focus is to move quickly to put the company back on track for growth and improve profitability”

We have execution problems and need to sharpen some of our strategic priorities

“ our challenges are grounded primarily in execution, but it also pointed out the need to sharpen and expand some of our strategic priorities. And frankly, as the industry continues to grow, there is no reason in my judgment with our incredible portfolio of brands in our superior scale why we can’t be leading with that growth.”

The nature of play has changed

“the nature of play has changed in many ways. The isolated brand perspective that Mattel long adhered to is less relevant. And a new and exciting role to play has emerged, a role to play which encourages and rewards partner brands with greater scope, world class content and faster innovation.”

Mattel really has two complementary businesses

“at its very foundation, Mattel has really two complementary businesses, but together leverage the global scale of our extraordinary design expertise and our unmatched global supply chain and sales capabilities.”

Get back to brand building

“with a rapid review of our culture, Mattel is getting back to embracing brand building, creativity and innovation. And we will put a premium on speed and personal accountability. And we are also changing things by organizing around the following six strategic priorities.”

Seems to be excited about the global supply chain

“Leadership in our global supply chain is clearly critical to achieving our objectives and so too is our commercial organization. Here we are emphasizing expanded relationships with our brick-and-mortar and omni-channel customers to deliver more engaging retail experiences, new merchandising concepts, continuous brand support throughout the year, and targeted price value propositions to be more competitive.”

Leverage a lot more outside expertise

“the company has also begun to leverage a lot more outside expertise to help us drive change. We need to approach our business differently and new strategic partnerships, many of which will be outside of our usual boundaries will be a significant focus for us in 2015 and beyond. These partnerships will enable us to adopt new technologies to accelerate product innovation, support new content creation, expand retail distribution, including e-commerce and to grow our licensed entertainment offerings.”

Partners with Google, ToyTalk

“We have already seen some of our early success of Toy Fair with our partnership with ToyTalk and our ongoing collaboration with Google and many more are underway. We are also leveraging our relationships with traditional media partners to extend the existing brands and to launch new ones. And we are deepening our engagement with companies like YouTube and Netflix to develop even more content and distribution platforms. We are also in active discussions with a number of media and studio companies to work with us around content development.”

Still have a lot of work to do

“we still have challenges and lots of work to do. And I am confident that with the revitalized management team we can quickly capitalize on growth opportunities and perform better for all of our constituents.”

Partnering in 3D printing

“we are pleased to announce an exclusive partnership with Autodesk, the world leader in 3D design software. 3D printing is quickly moving from the exotic to the everyday, thanks to the growth of the Maker movement and consumer accessible print outlets. That’s why we are focusing strategically on the design and software side to drive future leadership and growth. We want Mattel to be at the forefront as the 3D printing becomes an important component of the toy industry. And through this partnership, Mattel’s 3D printing apps activated by Autodesk will soon deepen brand experiences for kids, parents and collectors alike by offering them the opportunity to customize their favorite toys.”

Partnership with Quirky

“ Today, we are announcing an exclusive new partnership with Quirky, perhaps one of the best known and most unique invention companies in the world. Their unique approach effectively brings real-time relevant invention through a broad and growing community of influences and inventors exponentially increasing our well of ideas and supercharging our existing capabilities to grow brand and toy innovation faster.”

Best in class technology partnerships

“Collaborations with additional best-in-class technology partners are an ongoing priority in our strategic plan putting us back in the forefront of category innovation and creating additional value for our IP.”

Monster high transitioning from growth to core brand

“We continue to manage Monster High transitioning if you will from growth property into what we are defining as an evergreen core brand. Based on everything that we see from research to consistent feedback from consumers and retailer response Monster High is absolutely a strong viable property.”

Mattel 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

A disappointing conclusion to a otherwise good year

“The fourth quarter of 2013 was a disappointing conclusion to what had been a pretty strong year for Mattel.”

A transformative year for holiday sales

“From my perspective, the 2013 holiday period has to be one of the most transformative I’ve seen, particularly here in the United States. Consumers came out much later and less frequently to brick-and-mortar stores with ShopperTrak showing retail foot traffic in stores to be down as much as 15%.”

Consumers bought, but more deliberately, focused on deals

“And while consumers ultimately bought, they seem to have done a lot more online research than they had in the past, and they were more deliberate, focusing on discounts and deals.”

Part of it was our fault

“It was clear that our innovation and end market execution did not resonate with consumers enough to achieve our sales goals.”

But categories were weak

“U.S. NPD results showed the key categories we play in, dolls, infant preschool and vehicles, performed below the industry average. In the end, 2013 looked a lot like the past decade for toys with a relatively flat market in mature markets and growth in emerging and developing markets.”

Looking at the leverage points of the business

“Our long-term goal was to deliver a 6% to 8% profit growth, and that drives our TSR model so that we deliver the upper third, upper quartile TSR. The way that we think about that is we have a variety of levers to pull. Revenue is a lever. Gross margin is a lever. The middle of the P&L is a lever. And we approach every year a little bit differently trying to get an understanding of where we think opportunities are on each of those particular levers. Now if I look at 2013, we obviously thought that revenue was going to be a stronger lever for us.”

We just didn’t have the innovation

“with hindsight being 20/20, as we look at the innovation in our product line relative to competition out there, frankly, we just didn’t have the innovation. And that’s what’s hurt our share in Fisher-Price. And again, we were very disappointed in that.”

Hard for an endcap to work as well in 2013 as in 2012

“I think some of our promotional spending was not as effective. As we’ve been saying here, the store traffic is down 15%. It’s hard for an end cap to work as hard in 2013 as it did in 2012. So there’s a lot going on in terms of where we are in share.”