Spotify ("The Swedish Netflix") reports, essentially while we are sleeping tonight. The Podcast King is expected to to report revenue growth of about 20% at $4.6b and earnings of $2.52-ish or more, which is a growth rate too large to really delve into here. Not because it isn't impressive but because I don't think it matters all that much what Spotify reports as much as how they guide.
Spotify isn't cheap for the best reasons. 1. The company is now printing money and utterly indispensable to ~265 million people worldwide. 2. There isn't (yet) a tariff on steaming stuff 3. Spotify is a global brand, generating more than half its revenues from "other countries" (there are apparently consumers in non-America, I'm having a team look into it).
While we're pie-charting let's add this:
That's Spotify's revenue breakdown on advertisements vs subscribers. Combine those two ChatGPT-generated charts and my hand-written efforts and you know why Wall Street was comfortable bidding SPOT up 33% YTD while the rest of the world burns:
Ads are flaky but Subs stick around. This is a big part of a lot of my investment thesis this year. I think...
As the dust settles on Liberation Day the Street is starting to pick through the rubble and getting long stocks just in case the world doesn't end.
Consider On Holdings, the Swiss shoe and athletic concern. Shares are popping on a down day thanks to a couple upgrades. The gist of both is something I wrote about the company last March; On is taking market share, expanding across the globe and generally speaking the hottest brand going, at the moment.
That's the view of me, Citi, UBS and about 75% of the fashionable people I run into at our over-priced health club. It's also something noticed by Mrs. JC Parets, and Mrs Jeff Macke; two solid sources on such matters.
On vs Skechers
Being hot is the ultimate tailwind for a consumer brand. Given the headwinds of the moment (tariffs based on trades between the US and anywhere else), it doesn't hurt On to be a Swiss based company doing a lot of business in Europe and on the other side of moving a good portion of production from China to Indonesia and Vietnam.
Below is my weekly video for members of Macke's Retail Roundup.
We're into earnings season. Thank the lord...
For the next few weeks, we'll hopefully learn how these retailers are preparing for a world with(or without) tariffs. Maybe it will give us something to focus on other than the soap opera out of the White House.
These tariff shenanigans really couldn't come at a worse time for retailers—they're doing their holiday season ordering now. And without clarity on tariffs, it's awfully hard to plan ahead.
So I'm looking forward to hearing what these execs have to say. This week we've heard from HAS, CMG, and SKX. I discussed these reports, as well as my Macke Retail Portfolio, in this week's video.
