In this podcast, Motley Fool host Dylan Lewis and analysts Jason Moser and Bill Mann discuss:
- Nvidia's killer quarter, and why the market yawned over the results.
- The global IT outage's impact on CrowdStrike's past quarter and the outlook for the rest of the year.
- Chewy's continued turnaround.
- Dollar General's merchandising woes.
- The new-look mature Salesforce.
- Two stocks worth watching: Birkenstock and Alimentation Couche-Tard.
Film critic and corporate governance expert Nell Minow weighs in on the summer box office and recent moves from Disney's and Starbucks' leadership teams.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our beginner's guide to investing in stocks. A full transcript follows the video.
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This video was recorded on August 30, 2024.
Dylan Lewis: The AI boom continues. This week's Motley Fool Money Radio show starts now.
It's the Motley Fool Money Radio show. I'm Dylan Lewis. Joining me over the airwaves, Motley Fool, senior analysts, Jason Moser and Bill Mann. Fools, great to have you both here.
Bill Mann: Hey.
Jason Moser: What's happening, Dylan?
Dylan Lewis: Not too much. We got a little stock talk ahead of a holiday weekend that I'm sure we are all excited to get on with. We've also got a trend that won't end at the box office this summer. Some earning stories you need to know. Of course the stocks on our radar, as we do every week, we are going to get the earnings parade rolling with what I imagine, Jason might be the release of the earning season. That's Nvidia, chipmaker extraordinary dropping results. I feel like everyone was waiting for this one.
Jason Moser: It feels like in Nvidia, this certainly has overtaken fantasy football drafts, I would say. I'll bet you there were more events planned around this earnings release and leading up to it than there were events playing around fantasy football drafts. I don't see that stopping any time soon. The thing is, with Nvidia, you need to be aware of the burden of great expectations. This was a perfectly fine quarter. It was a good quarter, but the market has its sights set high on this one, of course. As those expectations continue to ramp up, it's very difficult to clear that hurdle. It's obviously a very richly valued stock, but for good reason. When you look at the numbers, just very encouraging sales for the quarter, more than doubled from a year earlier to $30 Billion and profits also more than doubled to better than $16.5 Billion. Again, shining performance in the data center side of the business. This really is the biggest part of the business. That revenue was up 154% from a year ago to $26.3 billion.
Based on those numbers, obviously, a very good quarter, I think the guidance going forward is very encouraging. I think the question really that came out from this quarter, and to me, this is really more of a timing thing than anything else. But just a bit of a story in the delay of the Blackwell rollout. This is just their next level solution, better performance while consuming less energy. They had executed a change to the production process there in order to improve production yield. This just added a little bit of delay to that actual rollout. But again, that's just a timing thing. It's nothing fundamentally wrong with the product. As such, they see that demand continuing to build as they roll into fiscal 2026. All things considered, the stock may be down a little bit, but I feel like it's been up considerably over the last several years. Based on all of the numbers, this was a good quarter.
Dylan Lewis: Bill, Nvidia is our proxy for AI boom and AI spend. I think that's why there were maybe so many eyes on it this earning season. Felt like everyone was waiting for the popular kid at the party to show up in a high school movie. What do you think of that?
Bill Mann: It's pretty clear, just in terms of timing that capital spending for artificial intelligence has been a real support and an updraft in the entire US economy, and Nvidia is probably a pretty good proxy. I still wonder why so many people view it as being a barometer for the health of the overall market or economy, because essentially, Nvidia's earnings report is as if you have a 500 piece puzzle, and you've got 30 pieces left, and they're all something like sky. We already know the basics by virtue of what the hyperscalers have told us they're going to be spending over the next year. Demand continues to exceed supply. I think it's pretty clear that the scaling for models, that's not something that has changed. We are looking at a spending cycle in which we are still in early days. But on a quarter by quarter basis, it doesn't matter all that much whether they hit or miss. I think actually the market given its response has taken that to heart.
Dylan Lewis: Jason, you noted that the comps are going to get a bit tougher. We are seeing them now on four straight quarters of triple digit growth. They're looking out to this upcoming quarter and saying, only 80% year over year is what we're willing to guide for here. The numbers get tougher, the numbers get quite a bit bigger that they are lapping, and we see, I think with the market reaction here, a fairly miuted one. Shares were down a little bit on what was otherwise an exceptional report by pretty much any measure. Is this the market taking a little bit of a breather here?
Jason Moser: I think that makes sense. As you noted, that revenue growth forecast of only 80%. Obviously we're being facetious there, that's still tremendous growth. But this isn't the type of company where it's just going to continue growing to the sky. At some point that capital spend from all of its customers taps out and you hit a reset, they have to iterate in advance and build new products, which I'm certain they'll do. But there's a big question mark, I think it's exactly how AI is going to play out. We've seen so much about how it's going to do all of these things, and it's still not fully clear from Nvidia's customers, all the way down to us consumers, how AI necessarily is going to impact our lives to the extent that all of the spend in the market ultimately makes sense. We ultimately want to see that return on that investment. That isn't as clear as probably it will be in a year or two. But in a year or two, you have to figure that a lot of that capital spend will have been spent, which then makes you ask the question, what's next for Nvidia? How far will this actually go?
Dylan Lewis: We've got a little time still till we have to pay the piper when it comes to some of that AI spend. We'll be checking in along the way. We also had a highly anticipated earnings result for a slightly different reason, though. We had the quarterly update from CrowdStrike. Of course, the company causing the worldwide IT outage at the very end of this most recently reported quarter. Not exactly working into the results too much that we saw reported, Jason, but there were a lot of eyes on commentary and what management was saying about the impact of the outage. You dug into the results, what did you hear?
Jason Moser: That definitely worked in a little bit to the guidance going forward and we'll get to that in a minute. But I really do think this was actually a good report, all things considered. I think it was an encouraging one given what the company has gone through and ultimately what it's put its customers through with that bungled update that shut down so many of their customers. The other thing to keep in mind with a crowd strike, and this is probably something that you could extrapolate to the greater cybersecurity space, but they pegged this AI native security platform opportunity at $225 Billion by 2028. That's up from around $100 billion opportunity today. Remember, CrowdStrike is only bringing in $3.5, $4 Billion in revenue annually right now. While the valuation has always been a bit rich, maybe a point of contention for some, that's also a very big opportunity ahead if they continue to execute.
Judging from this quarter and judging from their guidance going forward, it does seem like they're recovering from this mistake, as well as could be expected. Revenue was up 32% from a year ago, they recorded earnings per share of $0.19 versus $0.03 per share in the same quarter of a year ago. Encouragingly, annual recurring revenue stands at 3.8 $6 Billion, that's compared to $2.9 billion a year ago, and net new annual recurring revenue of $218 Million a quarter was up 11%. Much as we're seeing with a lot of these companies, those longer sales cycles are playing into exactly how quickly they're going to grow, but the adoption is still strong. These numbers, I cover these every quarter because I think it's important, but 65% of their customers are using five or more modules? Forty-five percent with six or more, 29% with seven or more, and then 48% of their large customers, those customers that spend $100,000 plus per year, have eight or more modules. That really is the nature. That's the strategy behind this business with that Falcon platform. Assuming that this recovery continues, assuming that they've responded to this appropriately, it feels like better days are ahead.
Dylan Lewis: Bill, how do you feel about how management at CrowdStrike's been handling the situation overall?
Bill Mann: Two months after the crisis, and the stock is down about 25% from where it was beforehand. Part of that has to do with the fact that we don't yet know what the aftermath is going to be. They probably have some legal liability. They are probably going to be coming out of pocket for some of the damages that happened elsewhere. I have to say so far, though, that CrowdStrike's handling of this crisis goes up in the Pantheon, along with Tylenol following the tampering crisis. They have been fairly sensational, and even in terms of just marketing, they went to a conference a couple of weeks ago, and they accepted the most epic fail award, and the President of CrowdStrike, Michael Sentonas showed up to take the award, and they're going to display it at their headquarters to say, look, this is something that we need to own, and we need to make sure does not happen again. They have been very good at getting onto the same side with their customers.
Dylan Lewis: Coming up after the break, $1 doesn't quite get what it used to, and that's continuing to hurt America's largest dollar store chain. Stay right here. This is Motley Fool's Money.
Welcome back to Motley Full Money. I'm Dylan Lewis, here on air with Bill Mann and Jason Moser. Nvidia and CrowdStrike, stealing some of the headlines this week, but plenty of other companies giving investors some fresh numbers with earnings reports, including go to pet supplier Chewy. Jason, shares up 10% on the report. Seems like Chewy gave the market a treat this quarter.
Jason Moser: Well, I'm just going to tell you, I'm glad that we're recording now because the chewy delivery came earlier today, so my dogs went nuts earlier, so we don't have to listen to them and go crazy on the show this week, thankfully. This has been a good year for the company. They've recovered nicely, I think, from a little bit of a difficult stretch earlier in the year. In shares up year to date, just over 20%. The sales growth, it's modest; 3% sales growth for the quarter up to $2.68 billion and adjusted earnings growth of 55%, which was encouraging. A part of the story with Chewy that we're going to talk about every quarter's auto ship and auto ship customer sales growth 6% for the quarter and now represents 78% of net sales, and that's encouraging. Net sales per active customer set a new record at $565. It was up over 6% in the quarter. They saw some gross margin expansion, which is encouraging to see as well. I think in regard to Chewy, the story, going forward, I think it's worth paying attention to the progress that they make in their vet care side of the business. This is very new part of the business, it's just getting started and only a handful of clinics, but it can be a very powerful acquisition tool for customers at the top of the funnel, bringing them in and ultimately selling more services and products. Then I think more importantly, even perhaps is the fact that they're getting a very positive response from the veterinarian community in regard to this effort as well. That's a very difficult market to enter there in veterinary medicine. Corporate medicine can certainly make it a little bit more attractive from a time perspective. It's maybe not going to pay as much, but it definitely has a lot of potential there for the business, something to keep an eye on.
Dylan Lewis: Not such a great report from Dollar General. Bill, pick a metric, and they missed. Top and bottom line were below expectations, comps and for your guidance, also below expectations. What's biting the retailer here?
Bill Mann: Well, this is the opposite situation of what we were talking about earlier with Nvidia. This at one point in time was a $250 stock, and now it is sub 90. It's a reminder that sometimes companies make missteps, and Dollar General has made a huge one. Like late in COVID, they started shifting from being a staple company into a consumer discretionary company. When you think about $1 general, their biggest advantage is the fact that they have broad coverage in rural areas where you just don't have access to a Costco. You don't necessarily have access to a Walmart, but you can see exactly where they are misstepping in their earnings report because their net sales went up, but their sales of home products went down seven. That was the higher margin part of their business that they really tried to move into. It has been a failure for them, I'm guessing at least partially because of Timo, the company that's owned by Pinduoduo. But certainly, you would think that Dollar General would be a trade down business in a time of high inflation, and it just has not worked out for them at all. I don't want to say this is a company in trouble, but this is a company where all of the shine has gone away from the business right now. They have big problems to solve.
Dylan Lewis: As you noted, we are looking at a business that's worth quite a bit less than it used to be. Company hitting a new five year low after the earnings report down over 50% from highs, and shares are historically cheap. They're about 13 times earnings at this point. You noted that there's some difficulties here, but is it at all interesting to you given the value here?
Bill Mann: You always want to look into things that are not being said. The things that I've described right now should be obvious to management right now, and they do have advantages as a staples providing business, but it would require them to give up moving into home products and higher margin goods. There's a path, but a management that has misstepped this badly, they really need to shift.
Dylan Lewis: Wrapping us up here with the earnings Look, we've got the lowdown on Salesforce. Jason, you dug in the results. What do you see?
Jason Moser: The company that we all know it, and yet, it's difficult to pinpoint exactly what they do It CRM, customer relationship management. It's just that system for managing all of your company's interactions with current and potential customers. That is salesforce's specialty. It's what they do so well. They've built a big suite of tools to help their customers ultimately manage those relationships. I would call this an OK quarter. Nothing crazy either way. It's just right in that meaty part of the curve, not showing up, not falling behind. But it's also clear that growth has slowed down materially for this business. I think a big perhaps the biggest question over the next several quarters, is whether that growth will re accelerate or not. Now getting to the numbers, the revenue of $9.33 billion for the quarter, that was up 8% in earnings per share beat expectations there $2.56 adjusted versus 236 expected. Again, it's a theme that's been very consistent with this show. I think with earning season in general, management there. They're assuming that the conditions they've been experiencing over the past few years. They see these conditions persisting in the form of longer sales cycles and greater scrutiny of budgets. I don't know as investors if it's reasonable to expect that top line to reaccelerate any time soon based on what we're hearing from leadership there. But, I thought it was really interesting in the call and in interviews. AI has obviously been a big point of focus for all of Big Tech and sales force certainly as well.
Benioff actually calling out Microsoft there on a quarter. Then he talking about these new innovations, these new products and services that sales force is introducing like Einstein AI that they're going to be testing out. They've got Agent Force AI offerings on the call. He was comparing those to Microsoft and talking about Microsoft and feedback they're getting from their customers and saying that so many customers are disappointed in what they're buying from Microsoft. Now, I haven't heard that personally, but listen AI and the largest language models. This is all still very new, but to sit there really point right at Microsoft and call them out, one of the companies that has been so fundamental to this AI narrative over the last several quarters. I just find that interesting, ultimately, that's going to put a target on Benioff if he's not careful. They better deliver, I guess is what I'm saying. Management raised guidance modestly for the year, still looking at 8-9% growth for the full year. Not bad, you look at earnings there, forecast at around $10 per share, puts the stock at around 26 times full year forecast, with that growth rate right now, I'm not sure it looks like such a steal, but if they can re accelerate that top line, things look better.
Bill Mann: I think it's safe to say, Marc Benioff ever the salesman. Always there on stage, willing to bring a little bit of heat and get people excited, Jason.
Jason Moser: Just a tremendous advocate for this business. Whether you love him or hate him, I think a lot of people love him. I think he's a good guy like him, I just He's a tremendous advocate for this business, and he always has been. His enthusiasm and optimism are really great to see.
Dylan Lewis: Bill, Jason, we're going to see you guys a little bit later in the show. Up next, we're checking on results from the big screen and how the movie business has been the summer. Stay right here. Listing some Motley Fool Money.
It's been a summer box office full of surprises, from bankable names flopping to an unexpected name, taking the title of Top grossing Animated Movie of All Time. To sort through the ticket stubs, this week I caught up with Nell Minow. She's a film critic and expert on corporate governance. She gave me the inside scoop on some overlooked movies from this summer's lineup and what to think about moves from Disney and Starbucks's Board. So far this summer, we've had kind of an interesting slate of movies coming out and maybe some surprises with some of the box office figures. We've had Inside Out 2, we've had Deadpool and Wolverine and Despicable Me among others on the silver screen. How would you grade the summer movie slate so far?
Nell Minow: Let's talk about in terms of box office, rather than critical worthiness. The summer got off to a very slow start, with a couple of big disappointments. The Fall Guy, which I loved and think everybody should see. It's now on streaming, of course, did very surprisingly badly with an all-star cast and wonderful action and Furiosa, which is another one that had a built in audience. Everybody loves the Mad Max movies, did not do well, and everybody started to panic. Have people forgotten how to go to theaters. Then all of a sudden, Ak 2. Was the gangbusters, and you mentioned two of the biggest. This is a record setter for Disney, the first studio ever to have back to back billion dollar movies with Inside Out 2 and Deadpool and Wolverine. That is a record that is hard to top.
Dylan Lewis: I feel like Deadpool was pretty fresh in a lot of viewers minds. We've seen some new releases from that franchise over the last couple of years. Inside Out 2 was a little bit of a surprise for me, especially with the global box office Paul. 1.5 billion is not something that you see every day. I remember watching the first one and thinking, great movie. I loved it as an adult, but it's a complicated story, especially for an animated movie. Did that one surprise you at all?
Nell Minow: It did surprise me a little bit because the first one was so perfect. It ended perfectly. How are they possibly going to go beyond that? Yet they really knocked it out of the park. They made it earn its box office. My favorite moment in that movie, anyone who's ever been a teenager or who has raised teenagers, I've done both, will recognize that one of the hallmarks of adolescence is, of course, sarcasm. In the movie, it's represented as an actual chasm so that people on one side of the chasm go, you're doing a good job, and the people on the other side hear it as, well, you're doing a good job. You would have to have years of therapy to get as much insight as you do in that movie. As soon as anxiety shows up carrying literal baggage, you know you're in very good hands. It's just a wonderful movie, and just great to see Pixlr back on top of its game.
Dylan Lewis: You mentioned that it was a pretty good summer for Disney. I think that they have struggled a little bit, particularly with some of their more superhero oriented movies over the last couple of years. Do you feel like they've found their footing now?
Nell Minow: Look, every movie is a new experience. William Goldman, the Oscar winning screenwriter famously said, "The story of Hollywood is that no one knows anything". I think you're familiar with the phrase, "Past performance is no guarantee of future performance". But I'm going to give you a quiz, I'm going to look here. I'm going to read you the top grossing movies of the summer and see you can tell me what they all have in common, OK?
Dylan Lewis: All right.
Nell Minow: Ride or die, Quiet Place, The Prequel, Twisters, Despicable Me 4. What do they all have in common? They are all,
Dylan Lewis: Squirrels, or franchise extensions.
Nell Minow: Exactly. [laughs] Which, of course, Furiosa was, too. But yeah. What I'm worried about is that this is going to lead to more sequels franchise extensions because people are going to take the wrong lesson from that. Those are all very, very good movies. Of course, twisters was how many decades after the original twister.
Dylan Lewis: People probably think it's a new movie at this point. It's been that long, especially the younger generation.
Nell Minow: Exactly. But that does make me very nervous.
Dylan Lewis: That is the model we've been seeing in the industry, though. You talked about built in audience before. It's bankable to go after something that already has a pretty decent track record at the box office. We've seen studios take a little bit more of a risk averse approach and lean into the IP libraries they have.
Nell Minow: Yeah, we're especially seeing that, of course, for the big budgets. What I'm hoping is that, every summer, what I look forward to are the little independent movies that will surprise you and introduce you to people. Glenn Powell was known. He was in Top Gun: Maverick last year. But this is the year he really became a big star in three big movies. He's got another one coming out before the end of the year, and he deserves it. He's absolutely wonderful, but he actually co-wrote Hit Man with Richard Linklater. He produced Blue Angels documentary, which is outstanding, and of course, he was in Twisters. He came out of that world of the little independent films, and I hope we still get some creativity and some support for those and that they don't all go straight to streaming.
Dylan Lewis: Any other sleeper films, you feel like people should be putting on their list to watch that maybe they would have missed?
Nell Minow: I really liked Fly Me to the Moon with Channing Tatum and Scarlet Johansen. I think that should have gotten more love. It's an absolutely knockout story. It works as a romantic comedy. It works as a slightly fantasized or heightened version of history of the first Moon landing. It also has some really interesting things to say about when we tell the truth and what kind of truth we tell. I think Fly Me to the Moon is the one that I would say is overlooked. I also want to mention that was correctly overlooked [laughs] was Kevin Costner decided that he was going to leave Yellowstone, which was a gold mine for him and put his own money into a five-part Western series and release two of them this summer. The first one Horizon did so badly, that they just pulled the second one from release, and we don't even know if they're going to film the third one. It's the good, the bad and the ugly. I would say, go to see Fly Me to the moon and skip Horizon.
Dylan Lewis: Looking out for the rest of 2024, and also just thinking about projects that are in development, maybe coming out in 2025. Anything in particular you're really excited about and looking forward to?
Nell Minow: I am. Now, I'm not going to call this one an IP extension, even though we're reuniting the director and the stars of Forrest Gump but their movie with Tom Hanks and Robin Wright, Robert Zemeckis looks very intriguing. I think it's called Home, and it's a multigenerational story, and Robert Zemeckis does love his CGI tricks, and he youngified those two. I'm a little nervous about that, but that movie looks really good and of course, we've got wicked coming at the end of the year too, so those are two big ones that I'm looking forward to.
Dylan Lewis: We turned to you to talk movies, but we also turned to you to talk a little bit about how companies are run. This next one is a blend of the two. Recently, Disney's Board put member James Gorman in charge of the company's Succession planning Committee. These are the folks that are going to be selecting Bob Igers replacement, and Disney has tried this a few different ways at this point, and it hasn't worked. What do you think about things this time around?
Nell Minow: I'm holding my breath as a Disney shareholder and as an advocate of Disney's content. I will say that succession is really difficult. This is literally why we pay the board the big bucks, that is their most important task and the one that they blow the most often. Certainly Disney has done badly on it before, I hope they've learned their lesson but it's really hard. The people who are tremendously successful at that sub CCO level, some of them are Clark Kent waiting to take off and put on their superman outfit. Some of them are not, some of them have reached their top and it's very hard to know which is which. Disney, my goodness, is there a company that has a more varied number of projects and divisions, they're in the hotel business, they're in the boat business, and of course, the movie business. They do a little bit of everything and so it's going to be very difficult for them to find a good successor, and I hope they do better than last time.
Dylan Lewis: Is there anything in particular you're looking for as a trait in a successor for Bob Iger?
Nell Minow: I would look for somebody who is very familiar with the new world of streaming and all of the other alternatives that people have, because I love Bob Iger, I think he did a great job, he did a great job the second time but the world of content is changing so dramatically. Particularly following the two strikes, and now we've got another strike going on. It's got to be somebody who is really thinking ahead and that doesn't mean just AI. You can't have a conversation at 2024 without talking about AI, but somebody who's going to really understand that industry, it's such an interesting industry, it's not a coincidence that it's the only industry in America where the unions play such an important role and that's because everybody's a free agent and so if they're going to have their healthcare, they're going to have their pensions, it's going to be with the union. It's got to be somebody who really understands the creative community and I think those are the things I look for, somebody understands the technology, the distribution of the future and the creative community.
Dylan Lewis: Disney has struggled with succession. I would say Starbucks has also struggled a little bit with succession this past month, we had word that Caple CEO Brian Nichol is going to be stepping into the CEO role at Starbucks replacing Laxman Narasimhan and from the reporting that I've been reading on this, it seems like this was largely board driven. I'm curious how you feel about the board stepping in there and acting on behalf of shareholders and really seemingly pitching Nichol on the opportunity to come aboard.
Nell Minow: I'm going to give the board a B plus with an asterisk on that. First of all, that is exactly what the board's job is and much too often, with succession, we have seen them a make a bad choice and B stick with the bad choice too long, so good for them for noticing that they've made a bad choice, good for them for acting on it that's why they get the B plus, but the Astrik is on a couple of points. One, we don't know what the departure package is, it better be rational and not like, we feel really bad that we hurt you're feeling, so we'll send some more money your way, so that's Part 1. Part 2, I'm very concerned that they're allowing their new CEO to work remotely, that's a tremendously bad sign, we all know that there have been a lot of shifts in work from home and all of that but we also know that there are communications that you have with people by running into them, by just being with them that are absolutely essential, so I'm very concerned about that, I'm very concerned that they are overpaying with his arrival package, and that that's going to impair his motivation and his incentives, so that's why there's an asterisk on my B plus. B plus reacting quickly, question mark about whether they're making the right decisions.
Dylan Lewis: Starbucks and Disney getting a lot of the headlines when it comes to these topics, but when it comes to the world of corporate governance, any stories or topics, you feel like really investors ought to be paying a bit more attention to?
Nell Minow: Yes, definitely. I think that there are a few. One is that the Supreme Court made a couple of decisions in the late part of the term, so the early part of the summer that I think are going to have a tremendously detrimental ripple effect on some industries, and investors need to be aware of that. By overturning the administrative law judges and by limiting some of the regulatory stuff that agencies can do the way they interpret their own statutes, overturning what's called the Chevron doctrine.
That is going to create a lot of uncertainty, particularly in heavily regulated industries as these challenges to these rules go forward based on these new cases, so I think that's something for investors to be concerned about. The other thing is that Delaware, which we all know, is where most companies are incorporated has pushed through very quickly, contrary to a lot of complaints from the academic community and even the business community, some changes to their laws, trying to prevent people like Elon Musk from leaving for Texas, and they're very anti shareholder, so I would be very concerned about how companies are go to respond to that, whether they're going to take advantage of these new loopholes that Delaware has created, so those are some things to keep an eye on.
Dylan Lewis: Now, I know. Thank you for coming on. Thank you for giving your thoughts on the film industry, and of course, the investor takes we need to know. Appreciate it.
Nell Minow: My pleasure.
Speaker 1: Movies Magic. Relight the tragic.
Dylan Lewis: Listeners, you can catch Nell's Musings on film and everything else at N Minnow on X/Twitter. Coming up after the break, Jason Moser and Bill Mann return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool for Money.
As always people in the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell anything based solely on what you hear. I'm Dylan Lewis, joined again by Jason Moser and Bill Mann. Gens, we've got radar stocks coming up in just a minute but before we get there and onto our Labor day weekends, a bit of trivia for you. Labor Day weekend is a big one for travel. AAA estimating that bookings are up 9% this year, and according to the company, the most popular destination for that travel remains the same as 2023. What American city is the Number 1 Labor Day weekend destination? Bill, what do you think?
Bill Mann: That's where I protect myself maybe by using an absurd answer because I don't know. Actually, I'm going to go with Las Vegas.
Dylan Lewis: Las Vegas. I think that's a mix of both there. You got a little bit of weird, but you got a popular destination there, Bill. Jason, what about you?
Jason Moser: I'm going to go with something just completely out there because I have no clue my old stump and grounds, Charleston, South Carolina.
Dylan Lewis: Well, you're both wrong, but we're all going to learn something, and that's really the point of a good trivia around, if you ask me. Seattle, Washington is the Number 1 Labor Day weekend destination according to AAA. Bookings up 30% last year, it retains its title as the place that most people are traveling this weekend. It is a wonderful city in its own right, but the reason that it is so popular for Labor Day weekend, it is the launch destination for Alaskan cruises and that apparently drives a tremendous number of people there. Some of the other top cities, Orlando, Anchorage, New York, and Boston, Massachusetts, where I'll actually be heading this weekend.
Bill Mann: Anchorage, the other end of the cruise. [laughs]
Dylan Lewis: They're just passing each other in the sea. The folks that flew into Seattle and the folks that flew into Anchorage.
Bill Mann: It's also the sunny month in Seattle, so that's good.
Dylan Lewis: You got to take advantage of it. There's probably a bit of that influencing thing.
Jason Moser: See, I was going to cheat and say Atlanta, because you got to figure everybody's going through Atlanta but I guess that's not the final destination, is it?
Dylan Lewis: Look, I'm a purist. You have to leave the airport for it to count. That's my role.
Jason Moser: I appreciate that.
Dylan Lewis: Let's get over to stocks on our radar. Our man behind the glass, Steve Broodo is going to hit you with a question. Bill, you're up first. What are you looking at this week?
Bill Mann: Probably a company that's never been mentioned on the show, for one, because nobody here knows how to pronounce it but it's a Canadian company called Alimentation Couche-Tard, which you may have never heard of, but you've definitely heard of at least one of their brands, which is Circle K. They are one of the largest convenience store owning companies in the world, and the reason why they are interesting to me is that they have made a 38 billion dollar hostile takeover bid for seven and I holdings, which is the Japanese company that owns the 7-Eleven convenience store chain. Yes, that's right. 7-Eleven is a Japanese company. We all thought it was from Wichita, it is not. A Canadian company is trying to take over a Japanese company, which owns an American icon.
Dylan Lewis: Steve, a question about Alimentation Couche-Tard. I'm brushing off some seventh grade French there, familiarly known as ANCTF over the counter.
Steve Broido: You bet. My question is, with a business like Circle K or 7-Eleven, where is the big profit here? They're everywhere, sheets. What's the differentiator, how do I make more money?
Bill Mann: Really, the differentiator for all of these companies is how much they make inside of the store. The gasoline tends to be a pass through and the important thing about Circle K is that there's a much higher mix of convenience store only and less in terms of pump sales.
Dylan Lewis: Jason, what's on your radar this week?
Jason Moser: Yes. One, we've talked about a couple of times this year, new IPO, Birkenstock Ticker B-I-R-K. They just reported earnings this week. Well, I can't help but find this company interesting to follow, everybody needs shoes. You look at that crock chart of the last five years, that's winter winner chicken dinner, so I have to wonder if maybe Birkenstock isn't an opportunity, even though it's not the Birkenstock that many of us Gen Xers and beyond likely identify with today much broader offering with something for everyone and I think that's ultimately a big part of the story but revenue growth of 19% for the quarter they recorded their highest quarterly revenue ever. Strong double digit revenue growth across all geographic segments, they saw 15% in the Americas, 19% in Europe, 41% in Asia Pacific Middle East and Africa. Continued strength and direct to consumer growing the relationship with their wholesale customers, over 90% of wholesale growth came from within existing doors as retail partners continue to expand their offerings there and they confirmed guidance for the year, so keep an eye on.
Dylan Lewis: Steve, a question about Birkenstock?
Steve Broido: Where should I not wear Birkenstock? The one place I shouldn't.
Jason Moser: I think class. I think when you're done walking across campus, and then you go sit in class for a two-hour seminar. Toe feet get a little stinky, Steve. I think class.
Steve Broido: But wedding, funerals, or whatever, that's fine. Just not in class.
Jason Moser: No problem whatsoever. Love it.
Dylan Lewis: Steve, which one's going on your watches this week?
Steve Broido: I'm going with the Circle K, the one that I can't pronounce because it just makes more sense.
Dylan Lewis: Bill, one more time for the audience.
Bill Mann: I'll at Alimentation Couche-Tard.
Dylan Lewis: There you have it. Bill, Jason, Steve, thanks for being here, that's going to do it for this week's Montley Money Radio Show. We'll see an next next time.
Bill Mann has positions in Costco Wholesale, Starbucks, and Walt Disney. Dylan Lewis has no position in any of the stocks mentioned. Jason Moser has positions in Chewy, Starbucks, and Walt Disney. Steve Broido has positions in Chewy, Microsoft, Nvidia, Salesforce, and Starbucks. The Motley Fool has positions in and recommends Alimentation Couche-Tard, Chevron, Chewy, Costco Wholesale, CrowdStrike, Microsoft, Nvidia, Salesforce, Starbucks, Walmart, and Walt Disney. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
