Lyft Earnings Miss Estimates After Global Expansion Push

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1:18Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. A lot of earnings flowing out here, including some of the tech companies and some of the online travel places as well. So we want to check in with Mandeep Singh, Global Tech Research Head for Bloomberg Intelligence, joining us here. Hey, Mandeep, I saw we talked about Uber a day or so ago and we had the Lyft numbers came out.

1:57I see the stock company kind of missed estimates here. Give us a sense of what is going on operationally with Lyft. We know things are going pretty darn well at Uber. How about at Lyft and where do they fit in going forward, do you think? I mean, all these companies right now have to look at, you know, the scale of AV rides from Waymo and how fast Waymo could, you know, go from here. Right now, they are doing 500 ,000 rides across the U.S. in more than 10 cities. And I think that's where you're starting to see an impact. I mean, like Uber and Lyft still are growing double digits. But when you look at the take rates, you're starting to see some sort of pressure.

2:46And they've been talking about, you know, partnerships and alliances in the case of Lyft. They have partnered with Waymo in one city, Nashville, and they have partnered with Baidu in London. But that's not going to be enough if you're talking about Waymo ramping up the way they have been. they've almost doubled their rides over the past 12 months. So that's where you will start to see challenges emerge when it comes to the business models of both Uber and Lyft, which has been asset light so far. But they have to start thinking about how they add more AV capacity on their platform. Mandeep, another thing that caught my eye is management saying premium rides are growing 35%.

3:29Is this becoming a real margin and revenue driver for the company? All I know is when I take Uber or Lyft, I pick the cheapest option, but I guess some people take the premium ones. Yeah, look, they have segmented the market really well. In the case of Uber, I would say they have done a better job in terms of segmenting the market and layering on subscriptions, you know, for that kind of service where somebody wants a black SUV. Then, you know, they prioritize the customers who is a subscription user. And in the case of Lyft, they talked about, you know, partnering with Chase Sapphire and, you know, airlines to have those sort of alliances.

4:10And all that is great, I think, in terms of driving engagement and stickiness, because for the most part, people used to just compare prices. And that's how they were arbitraging, you know, whichever one had the lower cost when it comes to a particular ride. Should Lyft just sell itself, Mandeep? It just doesn't feel like they can scale here vis-a-vis Uber. What do we do with this thing? Well, I think down the line, I do expect one of the AV platforms, whether it's Tesla or Waymo, leveraging someone like Lyft or even a DoorDash, which has a partnership right now with Lyft in terms of cross-sell opportunities between food delivery and mobility.

5:00So DoorDash is a great example of a company that has scaled really well on the delivery side, is making that pivot to agentic AI use cases. And so, you know, for them, it would make a ton of sense to expand into, you know, ride sharing with an acquisition as they have done with their acquisition of Deliveroo in the UK. So I do think, you know, that combination makes a ton of sense. And we can go to Airbnb because they also raised their full year outlook, but profits they'll miss because spending jumped. What do you make of the balance they're doing right now? Because I know they're expanding into hotels, airport pickups and a lot of other add on services.

5:41I mean, Airbnb's big advantage has been that they get a lot of direct traffic and they are a verb, you know, similar to what Uber is on the ride sharing side. So the problem they're trying to solve for is the saturation in that alternative accommodations market. So they had to expand in new categories. It sounds like hotels and possibly, you know, layering on some ride sharing services or airlines would make a ton of sense. But they also have to cater to this agentic shift that is happening. So I think platform level, there will be some changes, but clearly they have the stickiness when it comes to the host they have on the platform and the inventory they have when it comes to, you know, exclusivity on Airbnb's platform.

6:34So Airbnb, I mean, they actually boosted their sales outlook. But Expedia had some problems there. Is that an Expedia specific issue or is that just people doing more on Airbnb? maybe less on Expedia. I mean, all these companies have a big catalyst in FIFA World Cup, you know, for the second half. And we know these big events drive a lot of demand when it comes to, you know, platforms like Airbnb. Even, you know, Uber and Lyft will get a boost during that quarter. So there's no doubt that, you know, no matter what the macro situation is with higher gas prices and what's going on, the FIFA World Cup will be a big event.

7:19And all these companies should do well, you know, in terms of catering to that demand. I mean, the Jersey Shore Mansion is only about an hour, hour and 10 minutes away from MetLife Stadium. I'd love to visit. Check it out. What about OK, so airlines and other travel companies are warning about softer demand. But Airbnb sounds pretty optimistic. Why do you think it's holding up when you made the point earlier that they have direct access to these companies, whether airlines or hotels? Yeah, look, I think when it comes to the supply side, Airbnb still has some exclusive supply. Like you could say, you know, I would go across different hotel chains depending on whoever is offering a lower price.

8:03But when it comes to price elasticity around some of the inventory that Airbnb has, which you cannot find anywhere else, that's where Airbnb has an advantage and especially for larger groups. And, you know, if you're talking about big events, that certainly should hold up much better. But you are seeing some softness in, you know, travel overall, which is why you see pressure on Expedia and, you know, some of the other travel names.

8:31Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this.

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10:43Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. More earnings. We got some more of the restaurant companies reporting earnings here. We want to get to it with Michael Halen, senior restaurant and food service analyst for Bloomberg Intelligence. Hey, Mike, let's start with a name we don't talk about too much, which is the company or one of the companies that provides the actual food for the restaurants. You see all the trucks double parked as they deliver food to the various restaurants in town.

11:20U.S. Foods. Talk to us about that company. And what did they report? Yeah, you know, more of the same. I mean, you know, this is one of the best run food service distributors in the country. You know, they're looking to grow sales a little bit through M &A, but also with improved technology for their customers. They're shifting to a 100 percent commission based sales plan to kind of motivate them to sell certain things, particularly branded products, which can can boost margins. You know, just a really well-run company that's taking share slowly and steadily in the food service business. So, I mean, again, U.S.

12:02Foods Holding, this is a company that I rarely look at, but I should because I see their trucks everywhere. $19 billion market cap. It's got about 30 ,000 employees based in Rosemont, Illinois, but they provide food to a lot of restaurants around the country. Again, the stock's up 14 percent year to date, up 20 percent on a trailing 12-month basis. It's a great report, actually. Can you talk to us about international growth? Is it becoming a bright spot? And can that offset some weakness they're seeing in their business? So U.S. Foods is 100 % U.S.-based. Yeah, so they've done a good job, like I said, of taking share here in the United States.

12:44That's been their focus. That's one of the that's one of the you know, one reason why investors do like this name, because the U.S. economy has been more resilient than, say, a place like Europe, especially with the higher inflation that they've seen over there. Also, this company is pretty well positioned in market downturns. So when people tend to cut back, you know, they have a larger percentage of their business that's dedicated to government, education, customers, hospitals. And those types of customers have these fixed and dollar cost contracts, which, you know, basically are indexed to inflation.

13:29So as inflation goes up, you know, margin dollars are protected. And those businesses that I mentioned typically don't decline when the overall economy declines. So this tends to be a safer bet when the restaurant industry falters. We had a big debate internally here this morning on Bloomberg Surveillance about best french fries. And Wendy's got a lot of support here. Talk to us about the Wendy's profit earnings release they had. Yeah, Wendy's was a disaster. Um, uh, it's been a disaster all through, you know, throughout last year, there was some hopes for, uh, a turnaround in results or maybe just, you know, from, from bad to less bad.

14:13And it didn't materialize in the quarter, you know, they're saying the right things on the call, but this company has had a lot of negative momentum. You know, um, chicken was always a big part of their offering and now everybody's in that game discounting is ramping up across the industry this is the most aggressive i've seen mcdonald's in my career um so all of that is going to make the turnaround at wendy's much more difficult to execute i'm a big fan of the bacon eater too so i hope they pull through here one more uh before we let you go here texas roadhouse i know let's reading your research from the past they're trying to strive value here and that seems like a pitch that would work in today's economy.

14:59Yes, you're right. And it does. And, you know, you know, the way we look at value is what you get for what you pay and nobody offers you more value on the plate than Texas Roadhouse. You go there, you get unlimited bread, you get massive portions all for a reasonable cost. You know, look, management said that they're seeing some people trade down to cheaper cuts of beef or even to chicken and pork. They're cutting back on drinks, but they're making it up in traffic. People are, they go to Texas Roadhouse because they know they're going to get a great experience. And so they're not cutting back on their visits to Texas Roadhouse.

15:37Clearly in the numbers, we're seeing cutbacks to Wendy's and a lot of other restaurant chains and maybe some trade down to the grocery store. But if people are going to a Texas Roadhouse once a quarter or once every other month, they're not cutting back on that visit. Stay with us. More from Bloomberg Intelligence coming up after this.

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19:00Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts. Or watch us live on YouTube. dude. Paul, do you go golfing regularly? Is that a weekend thing for you? Yes. And I'm wearing my canoe book, which is my club shirt. I got the belt from Garden City Golf Club. So I'm all in my life. But golf's not actually now kind of cool. And it's growing like crazy. I know before the pandemic, it felt like it was kind of dying a little bit. And social media is all over these influences are all over the game of golf.

19:38Really? Oh, huge audiences. And they're getting huge money and the pga tour notices the lift tour notices although the litor is dying sort of yeah but it was it was part of the lift tour's birth was because of social media yeah yeah yeah that's

19:51Scarlet Fu:a good point all right well let's talk to someone who's capitalizing on all of that the rebirth of golf he is brian cox he's global vice president of scotch whiskey at bacardi and he's here to talk to us about why his brand and other luxury brands are increasingly aligning themselves with golf culture right now brian good to speak with you what is golf culture and how has it changed as paul mentioned it's now something that lives on in social media things go viral in a way that they didn't before that's for for obviously two passions of of mine golf and scotch whiskey um i think the luxury brand sector has really paid attention to the evolution of golf as you alluded to a second ago it was really the pandemic that grew the built-in audience of golf from around 24 million people that followed or played the game in the U.S.

20:44to about 40 million today so it's just a massive inbuilt audience it's also become the profile of the audience has diversified it's become younger young adults much more accessible it's also globalized you're referring live golf for example but you know japan huge market is booming also in india and these all happen with the us to be great scotch whiskey and also luxury goods markets um i'd also say at the same time the the audience has stayed fairly affluent so that's why you're seeing luxury and lifestyle brands really lean in uh the other factors of course as you will well know at garden city you've got the famous 19th hole so golf in uh in particular goes beyond just what happens on the course so it's really that lifestyle social connection moment that allows us to really have have a role in in that in the area so how are you guys at doers scotch how are you kind of trying to leverage that audience?

21:50Well, we've now in our sixth year been sponsoring the USGA and the US Open as its official Scotch whiskey. Amazing partners, great tournament, great reach, you know, big TV audience. And we use these kind of temple moments, as we call them, to really build integrated marketing programs around. So we have advertising, we have corporate hospitality uh entertaining clients and influencers you're talking about social media a second ago so that's a really important the whole online digital aspect of of golf nowadays and it overlaps between the sport against again the lifestyle we have also some fashion collaborations we work with peter millar uh we've worked in the past with other fashion brands and then we run our own promotions.

22:43So there's an aspect of integrating retail and country clubs, of course, because every country club pretty much has a 19th hole, the famous bar. So that's very relevant. And every year to celebrate the U.S. Open, we come out with a limited edition, a 19-year-old. And then we have also some very innovative serves and RTDs, which address a slightly less traditional you might say audience how are you integrating your brand with golf in

23:13Scarlet Fu:a way that changes from what it was before the pandemic i mean you know any golf tournament has lots of brands showing up everywhere but what is um what is doors uh doing that's different that kind of makes it look like it's 2026 as opposed to 2016. so that's a big uh as well for starters we're about you know we play a role as a social catalyst um it's uh you know we've got the heritage of scotland behind us and so this way of connecting with consumers uh of opening up the games we are partner with uh organizations such as five iron golf uh you've got top golf and so forth as well and so you can see how we can animate and activate beyond uh the actual course itself we also actually promote the tournament through our advertising um so that's about gaining i guess broader awareness for the actual event itself and then we do things like every year we have the duers lemon wedge which is the official cocktail of the us open uh that's served as an rtd which means ready to drink in can we sell about 17 well not us but the uh the venues will sell about 17 ,000 of those per tournament.

24:33We serve around 13 ,000 cocktails. So it's a way of expanding the usage, occasions and consumptions, which is really cottoning on. And that brings in a whole new cohort of fans, actually. Brian, you mentioned earlier the impact of social media influencers. And again, maybe my feed, my algorithm just feeds me these guys all the time, but there's a lot of them doing some really great content. getting a list stars to come on their program whether they're having a round of golf somewhere with lebron james or something else how do you play into that that's that's interesting there's i think one of the big drivers of the popularity of golf is how other sports people have really lent in um i think there's a huge uh nfl and nba uh following of golf of players that actually in the time of will will participate in the game it's their it's their hobby it's their passion point and something's clicked in this sport in the way that it's uh it's very much about as you will know playing with or against yourself but it also connects you to others so there's a dynamic in culture here i think that is driving this and it's amazing to see how other sports folks from other disciplines are actually fueling this.

25:57Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria.

26:36But on public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Add paid for by Public Holdings. Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss.