More Trouble for TD and Apple’s Slowing Sales

[00:00:00] Welcome back to the Canadian Investor podcast. I'm here with Dan Kent. We're back for our Thursday

[00:00:20] news and earnings episode. We're actually doing something a bit different this week. We're doing

[00:00:25] it in two part because there were so many companies reporting that we were interested

[00:00:30] in doing and talking about on the podcast. There was also some news that came out. It's

[00:00:34] like everything came all at once. We have tons of companies to talk about. I think

[00:00:40] we probably could have done an extra two or three as well. It's just been a crazy

[00:00:44] kind of week of news and earnings as well. So pretty excited about that. Dan, how's

[00:00:49] it going on your end?

[00:00:51] Pretty good. Oilers off to the second round. Yeah, it's going to be an interesting

[00:00:56] Canucks. Canucks, yeah. So the two last remaining Canadian teams. That's it. Okay.

[00:01:02] There's only one team I might dislike more than the Flames and it's the Canucks. So

[00:01:10] it's going to be an interesting series. Yeah, I don't know why. I don't know why.

[00:01:13] It's been crazy busy on the earnings front. We do a lot of coverage on companies and

[00:01:21] I hate it when everybody reports at once. And this is definitely seeming like one of

[00:01:28] those earnings seasons for sure. Yeah, and even next week, I think there's going

[00:01:32] to be a few more. I know Canadian Tire is reporting in a couple days so we'll

[00:01:36] probably talk about that next week. I always am interested in what they have

[00:01:40] to say in terms of the Canadian consumer. So really excited. A lot of

[00:01:44] stuff to talk about. So I guess enough of this. Let's get started. We'll

[00:01:48] start with some news here because you know the elephant in the room, I guess,

[00:01:52] the Fed or the elephant next door. So they had their announcement last week to

[00:01:58] no one's surprise. The Fed's fund rate remained the same so it was unchanged.

[00:02:02] They are slowing down QT which is quantitative tightening which means

[00:02:07] that the rate at which the Fed's balance sheet is shrinking is actually

[00:02:11] slowing down. I think it's safe to say that the likely path here is a

[00:02:16] return to QE which is quantitative easing at some point in the relatively

[00:02:21] near future. Now QE means that the Fed purchases assets, typically US Treasury,

[00:02:27] with essentially printed money which it grows on its balance sheet. And

[00:02:32] quantitative tightening is the opposite of that so they once these bonds, I

[00:02:38] just say the Treasuries, come to mature they just let them roll off

[00:02:43] So that's typically how the difference between the two. QE is a form of

[00:02:47] stimulating the economy while QT typically will help kind of rain down

[00:02:51] the economy. Now inflation, Powell said that inflation is still too high and

[00:02:57] the path to forward is uncertain. They are still committed to get

[00:03:01] inflation to their 2% goal. While answering a question, Powell mentioned

[00:03:05] that the policy rate was restrictive although he hesitated on saying

[00:03:09] sufficiently restrictive. It was really interesting if anyone listened to the

[00:03:14] press conference someone was asking a reporter was asking the question like

[00:03:18] is it sufficiently restrictive and he fumbled and he took a while and I don't

[00:03:24] know why he was just kind of afraid of saying that word which a lot of

[00:03:29] people which I find surprising because overall the media reported mainstream

[00:03:34] that like essentially like rate cuts are coming and that the Fed was dovish

[00:03:39] that's the overwhelming kind of analysis that I saw but just that

[00:03:44] response there just gave me a night like the perception that he did not

[00:03:49] want to commit to anything. Then he answered another question about easing

[00:03:54] cuts and he basically said it depends on the path the economy is going

[00:03:58] forward and where inflation is at. Now economic activity is still growing

[00:04:03] at a solid pace according to the Fed again. He also dismissed concern that

[00:04:07] stagflation is starting in the US since that would require weak

[00:04:13] economic growth, high unemployment and high inflation. It's hard to disagree

[00:04:18] here with Powell I think people just saw that GDP print that came lower

[00:04:22] than expected and then inflation has been picking up in the last three

[00:04:27] prints or so and I think people were just coming to that conclusion. I think

[00:04:31] personally it could still happen down the line. It's a non-zero possibility

[00:04:35] but I think it's way too early and a lot of people I know it makes

[00:04:39] headlines with a lot of mainstream outlets were just like had that

[00:04:42] stagflation word again it may happen but I think it's way too early. Before

[00:04:48] I go on any comments on what the Fed had to say? No just on your last

[00:04:53] thing there I was gonna say like I think it's just because that's such a

[00:04:56] good headline word to use like it's gonna drive views especially because

[00:05:04] if you think of the last stagflation environment so I mean even if there's

[00:05:08] a remote possibility the media is probably gonna talk about it because

[00:05:12] that's what brings in readers but it doesn't look like it's occurring or

[00:05:17] even starting to occur on any level right now. I mean unemployment is at

[00:05:22] 3.8% like 50 plus year low. I think it's a bit too early for that. Yeah exactly

[00:05:33] and I think that's where it was coming from and look fear sells I don't blame

[00:05:38] mainstream media when they put that word out even with people that don't

[00:05:41] know it probably Google it and then get scared and he even mentioned during

[00:05:45] the press conference he's like I was there during the 1970s where you

[00:05:49] know there was high inflation double-digit inflation unemployment I

[00:05:53] think was around 10% at the time and economic growth was like very

[00:05:57] essentially stagnant very slow so obviously compared to that we are far

[00:06:02] away but I found it very interesting that he really wanted to quash that

[00:06:06] and the market increased the chances of rate cuts following the Fed meeting

[00:06:11] and of course a day after poor US job report for both July and the

[00:06:16] September meeting although July is at a 34% of rate cuts while September is now

[00:06:22] at 84% if we compare that to a week earlier it was 27% chance of a rate cut

[00:06:28] for July and 59% chance of a rate cut for September so it's pretty drastic

[00:06:34] changes here quite a big jump following those two data points that

[00:06:39] came out so the Fed meeting and the job report and I've said it before

[00:06:44] and I'll say it again I do find it quite unlikely that the Fed would start cutting in

[00:06:48] September because that would be the final meeting before the election in

[00:06:52] the US and just the perception of interference I think that's something

[00:06:55] they'll want to avoid although their discourse has been to say well we

[00:07:00] don't even think about the election we'll do what we need to do that's

[00:07:04] how we remain independent I don't believe that I think it's definitely

[00:07:08] something they would consider and I honestly think the market here is

[00:07:12] hearing what it wants to hear from the Fed because a lot of mainstream outlets

[00:07:18] were saying that he was dovish and I listened to the whole press conference

[00:07:22] and essentially just left his option open like he was not dovish the

[00:07:27] comment he did say that they were not looking to raise rate but again

[00:07:32] when I talked about the sufficiently restrictive he was very reluctant so I

[00:07:37] think it's at the back of his mind that raising rate could potentially

[00:07:41] happen some point down the line that's just my interpretation I could be wrong

[00:07:45] but I think the main takeaway is they're still relying on data to make

[00:07:49] their decision and that the market is you know making some assumptions and

[00:07:55] let's be honest the market has been wrong for over a year now on what they

[00:08:00] think the Fed will do so I think the expectations are always fun to look

[00:08:04] at but I think it's good to remember that the markets have been extremely

[00:08:08] wrong on the Fed's fund rate for over a year now. Yeah pretty well said I mean

[00:08:13] it's very hard to predict this type of stuff I usually listen to these but I

[00:08:17] haven't had time so I mean I don't have much else to comment on it you

[00:08:22] did a pretty good job you want to move on to BCE? Yeah let's move on to a

[00:08:26] company that would like lower rates yeah exactly a company that definitely

[00:08:30] needs rates to come down so BCE has been under a ton of pressure as of

[00:08:36] late soft earnings, soft guidance, pressure from interest rates continue to

[00:08:40] weigh on the company. On the quarter they reported operating revenues

[00:08:45] decline by 0.7% adjusted earnings per share declined by 15.3%

[00:08:50] and operating cash flows by 9.2% decline they generated around

[00:08:55] 85 million dollars in free cash flow which is effectively flat on a year

[00:08:59] over year basis capital expenditures came in at just over 1 billion which

[00:09:04] is a 7.7% reduction year over year so capital expenditures are pretty

[00:09:09] important right now just because a lot of these companies were spending a ton

[00:09:12] of money during the pandemic and they're kind of expected now to scale

[00:09:16] a lot of that back down just in an effort to improve free cash flow

[00:09:20] adjusted EBITDA grew 1.1% year over year and the company's EBITDA

[00:09:26] margins came in 0.8% back 0.8% higher on the back of

[00:09:32] lower operating costs so the company is seeing a large influx of mobile phone

[00:09:37] additions it continues to record record numbers on that front they're up

[00:09:40] 4.5% year over year however average revenue per user remains relatively

[00:09:46] flat the company reaffirmed their guidance

[00:09:49] of flat to four percent revenue growth low single digit adjusted EBITDA

[00:09:54] growth and a three to eleven percent decline in free cash flow growth

[00:09:58] and in terms of ARPU like average revenue per user

[00:10:03] they had previously stated that they would expect it to still grow but face

[00:10:08] you know decelerating growth just because of all the competition right now

[00:10:11] in the space but they actually revisited this and they expect ARPU to

[00:10:16] decline in 2024 just due to the competitive environment churn rates were

[00:10:21] much higher than usual and have been escalating in recent years they

[00:10:24] talked about this on the conference call the company pretty much attributed

[00:10:28] to the fact that many people are just starting to buy their own device

[00:10:32] and bounce around from company to company seeking out the best deals

[00:10:35] when you own the device you're in a little bit of a better position

[00:10:39] because you know you don't have that device balance on the contract

[00:10:42] and generally you get a little better pricing the companies this was a bit

[00:10:48] this was a bit weird to me so the company's previous leverage targets were

[00:10:52] two to two point five x EBITDA and it currently sits at three point six x

[00:10:56] so the company just moved its target to three x so they went from two to two

[00:11:01] point five and just said they're going to start trying to get down to

[00:11:04] three x now and they stated that the old debt targets were a result of

[00:11:09] stale company policy they didn't really mention anything outside of

[00:11:13] that but i mean it you would think right now like now would maybe not be

[00:11:17] the time to boost your leverage targets especially like with the

[00:11:21] pressure that they're facing but i don't know it's um yeah it's

[00:11:25] anything to keep that dividend going there you go

[00:11:29] yeah it kind of seems like if you can't hit the target just move the

[00:11:32] goal post and raise the target i don't know though they they could have

[00:11:36] provided some additional commentary as to why this is but just in general in

[00:11:41] the conference call they just said it was stale policy

[00:11:46] so they also got asked about the dividend and like the analysts didn't

[00:11:50] come right out and ask if they were going to cut it but they asked

[00:11:54] any chance that the dividend in 2024 is not what has been communicated

[00:11:59] which is pretty much you don't want to ask if it's getting cut but you're

[00:12:03] pretty much going you're asking if it's going to be cut and they said

[00:12:07] the dividend is as for 2024 as stated so i mean on a surface level

[00:12:13] they clearly have no intentions to cut it and like overall it's really

[00:12:18] difficult to analyze this company right now because a lot of the

[00:12:21] cost-cutting initiatives like the layoffs the the sale of assets they

[00:12:25] haven't really come to fruition yet and as a result

[00:12:28] like they've stated themselves there's been next to no impact

[00:12:32] thus far from those efforts they're continuing to roll them out and they

[00:12:36] they expect it to come later in the year but overall right now there's

[00:12:41] really no true indication as to how much you know money it's actually

[00:12:45] going to save the company and i mean if cash flow generation doesn't pick up in

[00:12:49] a big way i think there will be a lot of pressure on the stock price even at

[00:12:52] the levels it's at now but if they do start to turn things around i mean i

[00:12:56] think you know it probably would be relatively cheap at

[00:13:00] at these levels but i would bet the latter just because i don't see

[00:13:04] any material decline in interest rates you know over the next while here

[00:13:08] and i mean but as you said like the as we talked about the feds like

[00:13:12] the odds are getting greater that they're going to start cutting earlier

[00:13:15] but i mean i think they need they need quite a bit you know a 2550

[00:13:19] basis point decline over the next year i really don't think is going to move

[00:13:22] the needle i mean they would need a big big reduction in interest expenses

[00:13:29] in order to turn cash flows around in a big way

[00:13:32] yeah it sounds like they don't want to come in in terms of the dividend

[00:13:36] past this year that's kind of the takeaway i took is like for this year

[00:13:40] you know it's what we said but i think they will they probably

[00:13:44] realize that some of the assumption that they gave at the beginning of the year are

[00:13:48] kind of going sideways a little bit interest rates for example if we just go back at

[00:13:53] the beginning of the year and we talk about the fed and of course there's more data on

[00:13:56] the fed and i think who's kidding oh right the bank of canada and the fed and

[00:14:01] the cb in europe and the bank of japan all the major banks talk to each other

[00:14:06] and typically they act in coordination so i think the fed is just more data on it that's why we do

[00:14:11] talk about them a bit more compared to the boc but the the expectations have been pushed out

[00:14:17] right so i think what bc is looking at is a bit harder kind of refinancing situation potentially

[00:14:24] for that debt i will come due in q1 of 2025 so in less than a year at this point

[00:14:30] and then in terms of the you know the layoffs just to provide contacts or people wondering why

[00:14:36] it's not showing right now just because often like you'll you'll have severance right so people

[00:14:41] keep getting paid for a period of time or they can take a lump sum oftentimes they'll have the

[00:14:46] option between the two just based on my background you know i'm pretty familiar with

[00:14:50] those there could be also some total compensation you know implication for high pension and

[00:14:57] things like that so it does take some time to trickle through i would say probably after like

[00:15:03] 12 months to 18 months you'll really start to see that the the effects of those cost cut

[00:15:10] cost cutting initiatives at least for the jobs kind of show up in the financials but

[00:15:15] to me i mean it really looks like a lot of i agree with you if all the things go well

[00:15:24] for bell this could be an incredible value play and it could perform extremely well the problem

[00:15:30] is the amount of things that need to go well for bc they're quite there's quite a few of them

[00:15:36] and you know one thing i know you mentioned a video you published is just population growth

[00:15:41] right if population growth starts slowing down that's been a big tell win for these telcos

[00:15:47] it's gonna probably slow down their revenues big time it's pretty much like the only tailwind in

[00:15:54] terms of you know overall growth like i think i can't remember what i had mentioned in the

[00:15:59] video but i did i did look up the numbers and it was it was crazy like how much of canada

[00:16:04] canada's population growth is hitting all-time highs like it's definitely we are growing at a

[00:16:09] very fast pace but like it's all immigration virtually all immigration i'm pretty sure

[00:16:15] it was like 90 plus which is and i would have to go back and kind of confirm that but it was

[00:16:21] large if it wasn't 90 it was it was huge and i mean our birth rate are quite low so i would

[00:16:27] believe that yeah and i mean it's yeah it's it's well as i was mentioning like if you

[00:16:33] once you if you get off a plane in yyc and you and you walk through the airport

[00:16:37] first thing you hit once you come out of like say security and stuff they got phone

[00:16:42] like rogers bell tell us they all got the phone booths and you just go up there and sign up for

[00:16:48] a plan you know i mean like it's they rely a ton on immigration because they need new customers

[00:16:54] because obviously we mentioned with arpu like it's it's not moving and i would imagine it's

[00:17:00] like what are these companies going to do to drive like cost increases we already pay

[00:17:05] like the highest phone plans in in the developed countries so like if anything that's

[00:17:09] going to decline so they're going to rely a ton on just overall customer growth which is

[00:17:16] currently sitting at records for sure yeah yeah and exactly and i can relate to that right if

[00:17:20] you're new to the country i mean i've traveled before in europe i was in sweden in 2013 and

[00:17:26] even then i had like uh you know i think an iphone 4 or 5 or whatever it was at the time

[00:17:32] but you know one of the first thing i did when i got into the country because i was

[00:17:36] there for like six weeks is you try to you know get a local sim card to get a plan a phone exactly

[00:17:44] to make sure that your phone works while you're there so obviously if you're coming here whether

[00:17:49] it's uh you know just a temporary workers permit or a student whatever it is that's going

[00:17:55] to be one of the first purchases you make pretty much everyone has a phone right so it's

[00:17:59] definitely something that'll be interesting to keep track of anything else you wanted to add

[00:18:04] before we go on to the next on the slide here nope that's it okay so now we'll talk about one

[00:18:12] well i guess the second largest bank in canada so td which has seen some aml trouble so anti-money

[00:18:20] laundering and there's some news that came out this started more than a year ago when news

[00:18:27] came out that the first horizon deal that td would purchase first horizon the u.s. fell

[00:18:32] through in big part because u.s. regulators would not approve it because of their concerns on the

[00:18:38] aml practices now the allegations are that chinese drug traffickers would have used td to

[00:18:44] launder more than 653 million usd and drug trafficking money i saw a lot of places saying

[00:18:51] that uh it was mostly related to fentanyl as well um i guess we'll know more as there's more

[00:18:57] details that comes out to regarding this and they apparently would have done so by bribing td

[00:19:03] employees and as a result td has already set aside 450 million in provisions to pay penalties

[00:19:10] however it seems like this is only the beginning and there could be other fines imposed

[00:19:15] by regulators and this is being led by the u.s. of course and td has a big presence in

[00:19:21] the u.s. for those who are unaware and it's hard to say how much this will cost td but

[00:19:26] i've seen several analysts saying that it could be in excess of two billion dollars

[00:19:30] and regulators could also impose growth restriction on the bank similar to what had been imposed

[00:19:36] on wels fargo's cross uh cross-selling scandal so they had some big scandals in the u.s. and

[00:19:43] what ended up happening is that the federal reserve in the u.s. actually imposed a cap of

[00:19:49] 9.95 trillion assets on wels fargo which was the amount of asset that they had as of the end of

[00:19:56] 2017 they imposed that cap in 2018 and that really really impacted wels fargo's growth like

[00:20:04] they the stock essentially for like five six years literally went sideways didn't do much

[00:20:10] of anything warren buffett for example was a big shareholder of wels fargo he kept being

[00:20:15] asked at the annual meetings like what he would do and i'm sharing here my screen for joint

[00:20:21] tci listeners you'll see that in 2018 the assets are actually a bit lower than they were in 2017

[00:20:28] so that cap of 2017 is pretty much followed so the assets of the bank stayed beyond that

[00:20:35] below that for that whole period and i think part of these restrictions were lifted just

[00:20:40] last year earlier this year but the reason why it's a big impact on banks is that

[00:20:46] essentially most of the assets for banks are the loans that they give out so if you put a

[00:20:51] cap on these assets you're essentially not able to loan more money get more revenues make more

[00:20:57] have higher interest uh income and it really puts a big big impact on your growth so

[00:21:04] something that could happen to the td i i'm not sure whether it will happen or not but i think

[00:21:10] it's definitely a word considering if anyone is looking to buy the dip here because we're just

[00:21:17] starting to hear about the implications we don't have all the information available so i would

[00:21:23] be extremely reluctant to buy td at this point just because if wels fargo is any indication

[00:21:31] if there's more severe restrictions that are put on td by u.s regulators it could really impact the

[00:21:37] growth going forward and we don't know how long these kind of restrictions can stay in place for

[00:21:42] several years and of course because of all this td has been the worst performing bank in the last

[00:21:47] year in terms of the big six it's down four percent and the closest in terms of total

[00:21:53] returns is scotia bank which is up three percent cibc has been the best performing one

[00:21:58] at 26 total returns and everyone else is kind of in between those two now that's kind of what i have

[00:22:06] my take on it dan like anything you want to had regarding this uh yeah i mean like i think a

[00:22:12] lot of people obviously when a canadian bank goes down by this much like they're so

[00:22:17] they're so popular here in canada that a lot of people just tend to just kind of see the

[00:22:21] price dip and buy the dip but i think like there's a lot of unknowns here like a cap on

[00:22:26] assets would not be good i mean essentially if if td's capped and you know the other big five

[00:22:31] banks are still allowed to grow their assets it would be really hard to see how td could

[00:22:37] ever you know keep up with them and as a result you probably see the stock price

[00:22:41] not perform very well um i mean i i owned td i've i owned it for actually quite a while

[00:22:48] i ended up selling it you know the the first horizons deal fell through which like at the

[00:22:52] time i believe was you know initially thought because of just the regional like the banking

[00:22:57] crisis in the u.s like they didn't want to deal with it then it kind of came out that it was

[00:23:01] because of this and then you know the initial fines and then the fines get bigger and that

[00:23:05] like there's more underlying issues and i mean i just ended up i ended up selling it i didn't

[00:23:10] really want to deal with deal with this too much but um i mean there's a lot of bad

[00:23:16] publicity right now for td bank i know this is pretty much the same with

[00:23:21] every major bank but they had that uh they were caught

[00:23:25] pretty much employees were caught selling subpar funds to consumers and stuff to like getting

[00:23:31] them to not pay off credit card debt and instead buy like high fee funds and all that

[00:23:36] kind of stuff and i mean that was every bank td was part of it and then like on top of this

[00:23:41] i mean it's just not a good uh not a good time pr wise for uh for td yeah exactly and

[00:23:48] the u.s is very like it's not a regulator you want to mess with in terms of aml and aml is

[00:23:54] just anti-money laundering practices they tend to take that very seriously so i think it's just

[00:24:00] there's just more information to come out that's why for me like i'm not saying sell your

[00:24:05] shares if you own td necessarily maybe it's more of a wait and see obviously this is not

[00:24:10] investment advice but what i'm doing personally as i would not touch td with a tenfold pull

[00:24:16] right now until you there's more clarity on it because chances are if wells fargo's any indication

[00:24:22] and there are different kinds of scandals granted but if it's you know if you can learn

[00:24:28] anything from wells fargo is when these things start going on and regulators really start

[00:24:33] owning in you probably will have time to get the you know get the shares at a pretty similar

[00:24:41] price and potentially even lower maybe it'll go higher don't get me wrong but you know if wells

[00:24:46] fargo's any indication i think that's what it shows and i think it's just a reminder for

[00:24:52] people who are against crypto and bitcoin that there's a lot of money laundering

[00:24:57] a lot of criminality that happens with the regular financial system there are ways around

[00:25:02] it and i just wanted to mention that not to say that there's not any in crypto obviously

[00:25:07] there is some but i was looking at some data from chainalysis which is an on-chain analytics

[00:25:14] company and essentially if you take the highest year of like money laundered through crypto

[00:25:20] which is 2022 was higher than 2023 that was 31.5 billion according to their figures well

[00:25:27] if you compare that to what the un says is about 800 billion to two trillion that's laundered

[00:25:34] every single year through the traditional financial system while crypto only represents

[00:25:41] less than like four percent depending on what figures of the range that you use it's

[00:25:45] between one and four percent so i think it's just a reminder that you know you don't have

[00:25:50] to like crypto that's fine but just making sure you understand both sides of the argument

[00:25:56] because there's you know the traditional financial system is filled with scandals

[00:26:01] about money laundering you just have to go back like the next the last like 10 years and

[00:26:07] you will find plenty of them yeah tons i guess the one thing i would i would clarify is i didn't

[00:26:13] sell td because of this news i sold td well it's probably maybe three four months ago now it

[00:26:19] wasn't because of this that i sold it's like there's so many unknowns here but yeah the

[00:26:25] truth is you sold it to buy new york community bank yes that's it yeah buy the dip yeah buy the

[00:26:33] dip exactly but no that's it on the td so did you want to go and tell us what's happening

[00:26:40] with tim hortons among other companies yeah yeah so restaurant brands international they own

[00:26:47] burger king tim hortons Popeyes chicken and firehouse subs firehouse subs was a recent

[00:26:54] acquisition for them i'll talk about them in a bit but they reported system-wide sales growth of

[00:26:58] 8.1 percent comparable sales which is pretty much same store sale growth it doesn't factor

[00:27:05] in new additions it just gives kind of a better picture on how they're growing revenue

[00:27:11] without adding new stores that sat at 4.6 percent so the bulk of the growth was actually

[00:27:17] from tim hortons which is in the midst of a pretty big turnaround in operations

[00:27:21] so they acquired tim hortons i can't remember when it was it was probably like 20

[00:27:27] no i don't think it was 10 years ago i think it was not that far back you can look it up

[00:27:32] i think it was like yeah i'll look it up while you yeah but they it has been like tim hortons

[00:27:37] has i think this is putting it lightly it's been a drag on the business ever since it

[00:27:42] acquired it but you know not anymore it's like absolutely cruising as of late i'll talk

[00:27:48] about that in a bit but just net restaurants which would be just new additions minus closures

[00:27:53] grew by 3.9 percent year-over-year and adjusted earnings per share were effectively flat they

[00:27:57] declined by 0.9 percent the uh yes i found it yeah what is it i found it it's going to be

[00:28:03] 10 years this december okay so yeah 2014 i thought it was way later than that but um

[00:28:11] so they reported strong double-digit growth in its international segment 11.6 percent growth

[00:28:17] so this company like its segments it'll keep you know particular data on its north american segment

[00:28:23] and then its international segment and it kind of breaks down really well like just overall

[00:28:28] what stores are growing you know all that type of stuff they do actually go pretty in-depth

[00:28:32] in the quarterly reports it makes for a pretty easy read but yeah their international grew by

[00:28:37] 11.6 percent the other double-digit increase was pop eyes which continues to be kind of the

[00:28:43] growth brand of the company it grew sales by 10.4 percent tim hortons grew by 7.8 percent and

[00:28:49] burger king by just 2.6 so where tim hortons really stood out was in comparable sales so

[00:28:54] again that's you know growth that doesn't include new store additions while their pop

[00:28:59] eyes brand is growing overall sales by double digits a big chunk of that is being fueled by

[00:29:04] new store openings when we were new when we removed new store openings from pop eyes sales

[00:29:10] grew by 5.7 percent tim hortons on the other hand grew by 6.9 so it seems to me like there's

[00:29:17] two main drags on the business right now and that would be burger king and firehouse subs

[00:29:22] it kind of makes sense in a way for burger king this is kind of like the you know the

[00:29:25] blue chip of the company's brand it makes up a huge amount of their of their total overall

[00:29:30] stores you can't really expect it to grow as fast as something like pop eyes but the main

[00:29:36] issue here is you also have burger king as kind of the driving engine of underlying results as it

[00:29:40] just makes up such a big amount of the company so they saw burger king segment saw restaurant

[00:29:46] count shrink by 2.4 percent comparable sales grew by only 3.8 percent and overall sales by just

[00:29:52] 2.6 so firehouse is kind of another brand that doesn't seem to be catching a lot of

[00:29:58] traction either so they paid one billion for it in 2021 back in late 2021 they expected the

[00:30:04] company would contribute about 50 million in adjusted EBITDA to their results so on this quarter

[00:30:11] it generated 14 million in adjusted EBITDA and I mean if you kind of you know run this out

[00:30:16] annually that's only 56 million so I mean over the last three years it doesn't really seem to

[00:30:21] be growing all that much I've actually never even seen a firehouse subs I don't know if

[00:30:26] they have them and do they have them where you're at yeah I think there's one I think

[00:30:29] there's some in Iowa but I've never never been there I feel like I was subway was more my thing

[00:30:36] when I was in my teens and early 20s I haven't been much on sandwiches since then yeah I don't

[00:30:42] really go I mean we don't have any firehouse and I don't really go to subway all that much

[00:30:47] I mean it's I've heard subways just ridiculous it's like $20 for a sub and a pop now yeah

[00:30:53] wow I've heard it is crazy but yeah firehouse like I don't know it doesn't really seem to be

[00:30:59] working out all that well Popeyes is still the major growth driver of the business it's providing

[00:31:05] some of the best growth rates in the US and internationally but Tim Hortons again is just

[00:31:10] you know it's kind of turning things around and again when we speak about Starbucks later

[00:31:15] on I really think there is a shift here from you know a more like premium type of coffee

[00:31:22] play you know coffee and food to you know a cheaper one and Tim Hortons particularly like

[00:31:28] obviously Starbucks is international and Tim Hortons is primarily in Canada but I mean there's

[00:31:32] there's clearly a big shift here and my main concern I guess would be if momentum were to slow

[00:31:39] for Tim Hortons we'd probably see a slowdown in overall results but like as of right now

[00:31:44] it's been it's been a pretty good good run for RBI yeah and have you tried the flatbread

[00:31:52] pizza we've had those for like a year here really I tried it a long time ago yeah they're pretty

[00:31:58] good and then like I saw that they were they were released like what was it a month or two

[00:32:02] ago I'm like what the hell we've had these in Alberta for like probably probably like they

[00:32:07] were doing probably a trial for yeah exactly yeah oh that's funny it's just I just find

[00:32:14] it they had these like kind of chipotle bowls too I don't know if they still have them

[00:32:18] anymore it's just some of this stuff they're offering is just a little strange it seems like

[00:32:22] they just throw something at a board and just hope it sticks like like they've had like

[00:32:28] different poutines like all these bowls different wraps now they got the pizzas but I mean

[00:32:34] clearly it's it's starting to work now but they were throwing the kitchen sink at Tim Hortons

[00:32:40] in an attempt to try and turn it around over since they bought it and you know it seems

[00:32:44] to be doing so now whether or not it sticks I guess we'll see no but I think the point and

[00:32:50] we were talking about that last week right the point that consumers are probably shifting a bit

[00:32:56] more to more affordable option I mean to me it sounds very reasonable and people will question

[00:33:01] you know oh the coffee's at Morton's is not as good as Starbucks and I agree like I you

[00:33:07] know yeah I have it from time to time mostly because that's what I started drinking when I

[00:33:11] was in university and it just gives me a you know a kind of flashback kind of feeling nostalgia

[00:33:18] there you go that's what I was looking for but it is you know much cheaper than

[00:33:23] and like something equivalent at Starbucks or some of the local coffee shops are a bit more

[00:33:28] premium we have like Bridgehead in Ottawa they're not in in Alberta but they're you know

[00:33:33] Ottawa a bit more Ontario depending on where you're from and if you get coffee from those

[00:33:39] places whether it's them or even Starbucks just a regular coffee you'll probably pay like 50% more

[00:33:47] than you would at Tim Morton's and you know you can argue the quality and I totally understand

[00:33:52] that for people but at the same time if you want to still grab a coffee on the go and not

[00:33:58] make your own and you need to save a bit of money I mean Tim Morton's not a bad alternative

[00:34:04] they're pretty much the cheapest coffee you can get I mean even some like McDonald's is more

[00:34:10] expensive Starbucks is much more expensive like Tim Hortons is about as cheap as it gets so I

[00:34:14] mean at some point you know if money's tight you're gonna sacrifice quality for price and I

[00:34:19] think we're seeing it here and then I mean maybe if you swing by Tim Hortons to get a

[00:34:23] coffee you get some food things like that so which is still much cheaper than Starbucks like

[00:34:28] a mile so I think yeah we're really starting to see people's pinching pennies yeah I am a sucker

[00:34:36] though for their breakfast sandwich with those ash browns like I'll take a combo once in a while

[00:34:43] maybe once every five to six weeks if we're like in a hurry going somewhere I will grab that

[00:34:49] and it's pretty affordable like it's under ten dollars for the combo so that's kind of what

[00:34:54] I'll get from time to time definitely not healthy but it tastes delicious oh yeah I don't

[00:34:59] mind them either I don't go there very often just because like if the coffee was better I

[00:35:03] probably would but I I hate their coffee so if you do breakfast sandwich bacon or sausage

[00:35:10] sausage okay me too yeah I prefer the bacon's not crispy you don't get anything with the

[00:35:14] bacon it's like they're so minimal on there yeah and it's so soft too like I want my bacon

[00:35:20] crispy but sausage all the way yeah we'll move on to something else so something that has a

[00:35:27] name that you think you can eat but is actually not a food company and I'm referring of course

[00:35:33] with my dad joke about apple so um apple released their earnings so the stock was up

[00:35:40] high single digits the day of the earnings release I definitely don't agree with the

[00:35:44] market here and I think it was just not a great quarter for apple I'll be very up front I think

[00:35:50] the market got hypnotized by the massive buybacks that were announced and I'll go over

[00:35:55] the numbers here so revenues were down 4.3 percent you over a year iPhone revenues were

[00:36:01] down 10 to 46 billion iPad revenues were down 16.6 to 5.6 billion which by the way they just

[00:36:10] announced some new iPads I think it was today with a fresh video a kind of a revamp of that

[00:36:16] just aside no I haven't had the chance to look at it but I think it was today or yesterday

[00:36:20] and wearables and accessories were down 9.6 percent to 7.9 billion now there were some

[00:36:26] bright spots Mac revenues were up 4 to 7.5 billion and services revenue is probably

[00:36:33] still the biggest kind of driver here for apple that was up 14.1 percent to 23.9 billion

[00:36:40] of course it makes sense now that you know apple is really pushing for that but again

[00:36:46] it's going to take some time until it kind of counterbalanced especially the iPhone revenue

[00:36:51] declining 10 percent during the call Tim Cook clearly I thought it was honestly a terrible

[00:36:58] call for Tim Cook I was listening to it I'm like I don't know what people are smoking

[00:37:02] what analysts are smoking to me was just on excuse mode as to why revenues were not great

[00:37:08] so he mentions that all he mentioned all the regions where cells were growing he mentioned

[00:37:13] that the iPhone cells specifically were growing in mainland China I couldn't find iPhone cells

[00:37:19] for China specifically in their release but overall cells for China were down the over

[00:37:23] years so it was funny how he kind of picked and choose what was good and for me it's

[00:37:29] actually China is such a big risk because it represents 18 percent of apple cells and if anything

[00:37:36] there is a big risk that US and China relations get worse in the years to come

[00:37:42] and when it's essentially one fifth of rear revenue that's a big risk factor like I just

[00:37:49] I don't fully understand the market here I'll be straightforward he said that if it wasn't for

[00:37:55] pent up demand from covid in 2023 for the same quarter they would have had higher sales like

[00:38:01] that's why I'm like I was not impressed at all I was actually I'm not a shareholder directly

[00:38:06] anymore about apple I do own it because I own index funds but to me it was just like excuse

[00:38:12] mode on to why they're not growing and I just I just don't think it was a great

[00:38:18] great call at all if I'm a shareholder I want to see the company grow not like you know

[00:38:24] pick and choosing what was kind of good about your results but not talking about the elephant

[00:38:29] in the room that means your revenues actually declined 4.3 percent net income was down 2

[00:38:35] percent to 23.6 billion while EPS was flat at one point a dollar 53 per share and obviously

[00:38:43] that's because they are buying back shares margins were up across the board with the

[00:38:48] exception of free cash flow margins which were down more than 400 basis point to 22.8 percent

[00:38:53] but of course said it time and time again free cash flow can vary a lot from quarter to quarter

[00:38:59] so I would take that with a grain of salt and free cash flow was down 19 percent to 20.7

[00:39:05] billion the main reason I think the stock was up was because of the massive 110 billion buyback

[00:39:11] program that wasn't out you know like I said I don't own the shares I do own index funds

[00:39:16] my wife has some in the portfolio I manage for her but for me it's really where does the growth

[00:39:23] come from here like at the end of the day earnings are flat sure EPS are higher but

[00:39:30] it still doesn't answer the question there's no growth in earnings and there's actually declining

[00:39:36] sales I'm not saying that Apple cannot start growing in a couple years from now depending

[00:39:41] on you know the Apple Vision Pro and other things they might have in the works whether

[00:39:45] they start integrating IAI to their iPhones like that could be a tailwind for them but

[00:39:52] I don't know why but Apple gets put on this pedestal and it was just like it was just not

[00:39:57] a great quarter like granted they still generate gobs of cash flow but it's to me it feels like

[00:40:02] a stagnating business yeah it seems kind of weird that they wouldn't be able to find you

[00:40:06] know somewhere better internally to spend 110 billion dollars especially with like all the

[00:40:12] AI advancements and all that kind of stuff I mean I I've never owned Apple but I own

[00:40:17] Berkshire so I have like quite a bit of exposure and I mean he even he said it was for tax

[00:40:24] purposes but he sold off a pretty big chunk of Apple like it still makes up like 40 some

[00:40:30] percent of his portfolio but and he said it was for tax purposes I mean I would say it's

[00:40:36] maybe you could read probably hedging a bit too yeah like just trimming a little bit I

[00:40:41] mean it's probably not a bad move even if like that's the reason like when it's such a big

[00:40:46] portion of your holdings maybe just hedging a little bit there might be some tax reasons

[00:40:50] then you're like oh well it just so happens the company is trading at like the highest

[00:40:55] valuations almost it ever has like it's kind of weird to me how like expensive Apple is

[00:41:01] right now when it really hasn't grown all that much in the last few years but like back you

[00:41:04] know when it was growing at a crazy amount it was trading at nowhere near the valuation I

[00:41:10] mean the the phone sales is kind of the same as like when we went over BCE I think

[00:41:15] just people are I don't think a brand new phone is on the top of the list right now like you know

[00:41:21] normally you can go and you know trade your phone in every two years or whatever and they'll

[00:41:26] tack it on but now it's kind of like okay well this iPhone doesn't need to be replaced

[00:41:31] every year exactly yeah so I mean I have an iPhone 13 I have a 13 and my so you were

[00:41:37] talking about bc earlier and you know people financing with telecom so my contract is up

[00:41:44] this month and I think it's going to be 200 bucks that I have to pay and then the phone is mine

[00:41:49] I think it's usually how it works if now they're like oh you don't have to pay it just you know

[00:41:54] continue financing you'll get a new phone and you know stay with us longer lock you in for

[00:41:59] another two years but honestly my iPhone 13 works perfectly fine works super fast the camera

[00:42:05] is more than good enough for what I do with it like why would I get a new phone and like

[00:42:10] you said it'll just give me leverage to negotiate a better price and I am not like

[00:42:16] I don't mind switching phone companies at all so you know it's something that I'll definitely be

[00:42:21] bargaining to get my costs lowered because it's not that I'm paying a whole lot but it's

[00:42:27] 60 bucks a month where in the contract ends for 25 gig unlimited so I guess they throttled

[00:42:33] you after 25 days but you can get way cheaper stuff now for the same amount of data so 40

[00:42:39] dollars a month so I will definitely be one of the ones who will be like okay if you don't want to

[00:42:44] give me a better deal I'll just switch to one of your competitors yeah that's the most powerful

[00:42:48] thing about the you know bring your own devices like you have the leverage whereas if you're

[00:42:52] getting the new phone I mean you don't at all really I owned a pixel 3 and I owned it

[00:42:58] forever like I had I would probably still own that phone today when I smashed it in the car

[00:43:02] door accidentally so I finally had to get a new phone but I mean I think like when you know

[00:43:08] times are good people had a bit more money like maybe apple got away with you know putting out

[00:43:12] a new phone every what six months but just now I just don't see the incentive for a lot of people

[00:43:18] to upgrade it's just not at the top of the list so we'll see if plus it's annoying as

[00:43:23] hell to set it up too that's the other thing I've never had well I had an iphone back in

[00:43:27] the day but I don't anymore no I mean yeah you can transfer this stuff but it still takes

[00:43:32] like probably an hour or so to get everything set up and I just like I don't you know why

[00:43:37] would I pay more and then have to deal with that when I just don't see really improvements on

[00:43:42] you know the actual phone it's just a better at least I know there are some

[00:43:45] yeah that's it exactly yeah yeah it's um no yeah that's pretty much it for apple anything

[00:43:52] else you wanted to add there no nope that's about it okay let's go to I guess one of your

[00:43:58] holdings right starbucks they they had a pretty rough quarter I didn't dig into it as

[00:44:04] much as you did but it was from what I saw yeah it was ugly yeah yeah I own starbucks and it was

[00:44:10] it was a bad quarter and I actually haven't had time yet to uh they didn't or what was it jim

[00:44:17] kramer I think interviewed the CEO and apparently the interview was just terrible like he just

[00:44:22] shredded oh really yeah I haven't had a chance to watch it I'll probably watch it later this

[00:44:27] week but apparently it was not good but yeah if you get if you don't know what the answer

[00:44:32] when jim kramer is you that's yeah that's not great I'm gonna have to look at that yeah

[00:44:40] so I'm pretty bullish on starbucks still I've owned it for a while but I will admit I was

[00:44:45] kind of surprised at the decline in results because I kind of thought the company's brand

[00:44:50] and just overall customer loyalty was a little stronger than it seems revenue missed expectations

[00:44:55] by seven percent earnings came in 15 lower than estimates so most analysts had expected the company

[00:45:02] would grow food and beverage revenue by not like crazy amounts like they kind of realized it was

[00:45:08] going to get tough for starbucks but they expected you know one to two percent growth

[00:45:11] in all these areas they reported a 1.3 decline in beverage revenue and food revenue declined

[00:45:18] 0.5 percent a large driver of this company's growth right now is is through China so it's

[00:45:24] an untapped market they routinely put up double digit sales you know in comparable sales however

[00:45:30] they actually like I even believe last quarter they had double digit comparable sales growth

[00:45:35] in China and this quarter it declined by 5.5 percent so it was a huge swing in that regard

[00:45:43] and just generally Chinese consumers like in China are are much more frugal than North American

[00:45:50] ones so this is kind of highlighted by the fact that total consumption as a percent of of Chinese

[00:45:56] GDP is around 53.2 percent whereas in the United States it's 68 percent so it's much higher like

[00:46:03] North American consumers spend a lot more this kind of means that you know Chinese consumers

[00:46:09] are likely to lean on the saving side of things over the spending which which means if

[00:46:13] you know economic conditions get tough they're much more likely to either cut out that expense

[00:46:18] or you know at minimum lead to or head to a cheaper alternative and Starbucks is definitely

[00:46:25] feeling that pinch right now the coffee market is insanely competitive brands brand strength

[00:46:30] plays a huge part in it and I think because they're so you know kind of early in their

[00:46:35] in their you know attempt to grow in China the brand likely isn't as strong

[00:46:40] and as a result like when you combine it with a bit of a stingier consumer you get

[00:46:44] you know amplified declines in sales this was this was actually where the company got hit

[00:46:49] really hard though so they ended up revising their guidance downward so previously they

[00:46:54] expected seven to ten percent revenue growth and 15 to 20 earnings growth so it now expects

[00:47:00] revenue to grow in the low single digits and earnings to either be flat or grow in the low

[00:47:05] single digits the company also guided to China sales declining from previously issued guidance

[00:47:10] it would grow in the low single digits they bombed I think they fell 17 or 18 percent on

[00:47:15] earnings day a lot of people were saying it was a bit of an overreaction and I mean although

[00:47:20] I'm a long-term shareholder at Starbucks I'm not really sure you know if you revise your

[00:47:24] earnings guidance down 20% I think you can expect at minimum that stock is going to tank

[00:47:30] 20% like it's uh yeah it's I don't really view it as an overreaction I view it as

[00:47:37] you know in my opinion temporary I think once consumers get some relief from pricing pressures

[00:47:43] you know a bit better economy will see people you know gravitate back towards it again but I

[00:47:47] wouldn't necessarily say that it was an overreaction I mean that's you've pretty

[00:47:52] much I mean it's pretty standard right like right now especially with multiples like a lot

[00:47:57] of companies being priced to perfection if there's anything that comes in that's unexpected I mean

[00:48:02] the market will react pretty violently like it's just the reality of having a stock market with

[00:48:10] valuations that are pretty rich as a whole um it was more than mag-7 you know last year but

[00:48:18] now I think since the beginning of the year a lot of the other companies have caught up a bit

[00:48:22] more in terms of that you know valuation being higher and then you have a company that really

[00:48:29] takes investor off guard a little bit I mean it's to be expected yeah yeah and I mean

[00:48:35] when you like it's a this is a company that's typically delivered as well so I mean when they

[00:48:40] issue guidance people generally trust it but the market is forward-looking so if you cut your

[00:48:46] guidance from growing at a 20% clip to maybe not growing at all I mean I'm surprised it

[00:48:51] didn't fall more than 17% but like I'm going to continue to add it just because again

[00:48:57] I believe it's going to be temporary they got a really strong brand I think you know the consumer

[00:49:02] will eventually return but not until there's some pricing relief and again this is same thing with

[00:49:08] with RBI with restaurant brands like I think this is actually like a shift you're seeing

[00:49:13] where their Tim Horton segment is cruising while while Starbucks is is kind of suffering I

[00:49:18] mean people just don't have the money to spend seven dollars on a latte it's just not yeah not

[00:49:25] on the priority list yeah and one thing I wanted to add to China just to provide more context where

[00:49:30] people are a bit more frugal so the safety net for people when they retire is not comparable

[00:49:37] to what we have in North America right in terms of you know social security in the U.S.

[00:49:42] and Canada here CPP old age security guaranteed income supplement as well if you're really low

[00:49:48] income so there is some kind of like safety nets for people who retire whereas in China

[00:49:54] there is very little so a lot of people end up putting their wealth in real estate which has been

[00:50:00] struggling which is probably the understatement of the day so really really hit hard and people

[00:50:08] tend to not invest a lot in the stock market in China so it makes sense that they would pull

[00:50:13] back on the spending because of that reason because they need to be able to to actually

[00:50:19] you know plan for the future and retirement and one thing that's interesting and I don't

[00:50:23] have the data I looked at it a couple weeks ago but one thing that Chinese people have been doing

[00:50:31] is there's been a lot more demand for gold in China oh really I think they're yeah they're

[00:50:37] using that as a store of value because I think the the real estate kind of bubble over there

[00:50:42] as caution a lot of people to you know buying more real estate that's interesting I didn't know

[00:50:47] that yeah so I mean I think it's definitely a good overview for Starbucks I think they have

[00:50:52] a really strong brand at the end of the day I think you you're correct I think they'll be

[00:50:59] good over the long term but it could be a couple of difficult years for Starbucks and

[00:51:04] I don't know if you had mentioned it maybe I missed it when you were chatting but the

[00:51:08] average ticket price I think was also down right yeah so I think average ticket declined

[00:51:16] pretty much across the board actually no I think in the in the US maybe not I'm pretty sure

[00:51:22] it declined across the board which means like even if you go to Starbucks like average ticket

[00:51:27] would be you know if you typically spend seven dollars there and now you're I don't know what

[00:51:32] you're cutting out maybe you're getting a normal coffee or something like and you're not

[00:51:35] spending that much that that average ticket kind of just kind of highlights how people are

[00:51:40] trimming down I think average ticket fell by by quite a bit in China and I think in the in

[00:51:45] the US or North America sorry it was like maybe negative four percent so even people who are

[00:51:52] continuing to go there are starting to trim back on you know the things they typically order maybe

[00:51:57] they're just getting a coffee not food maybe they're I don't know what do they charge you

[00:52:02] extra for particular stuff at Starbucks I'm not a big Starbucks guy but I mean I go for once

[00:52:07] in a while I think the lattes are the most expensive and then like the summer I know

[00:52:12] we're not there yet but the summer kind of you know cold brew and stuff like that but yeah that's

[00:52:17] a good explanation because it it doesn't mean they lower the prices is just you know someone

[00:52:22] who would normally get a latte and let's say a breakfast sandwich or whatever maybe now they

[00:52:28] only get the latte you know the latte is the same price or slightly higher but their average

[00:52:32] ticket price has gone down because they don't get that breakfast sandwich anymore yeah it's a

[00:52:37] pretty big like KPI for for retail companies just you know how much people are spending

[00:52:43] when they go into the store like you know it's not necessarily that you know you have to get

[00:52:47] foot traffic through the door but you also have to incentivize people to spend more and just you

[00:52:51] know average ticket price is a pretty good thing to look for for particular retail companies

[00:52:56] Starbucks especially yeah no I think that was a good overview it was a fun episode we'll

[00:53:02] definitely we'll be recording a second one so when you hear that we'll have one our hope is

[00:53:08] to release it on Friday so tomorrow when you're hearing this if you're hearing it on Thursday

[00:53:13] when it's released we have a bunch of other companies I think we can tell people the ones

[00:53:18] that we'll be talking about so we'll talk about TMX Group which owns the Toronto Stock

[00:53:23] Exchange Allied Property REIT I know quite a few people own that including myself Air Canada

[00:53:30] BP earnings as well as the big announcement they have with Microsoft Cargo Jet earnings as

[00:53:36] well so a lot of stuff to talk about we just had too many that we decided you know what we'll

[00:53:42] just make an extra episode this week so hopefully everyone enjoys that and tunes in

[00:53:47] on Friday well Thursday and Friday to listen to both yeah I think Canadian Grocers I think

[00:53:53] too reported so that'll be that'll be interesting oh yeah okay I don't know if Empire is reported

[00:53:59] but Loblaws the boycott is on well we'll have to wait for next quarter if we see that boycott

[00:54:04] if it's uh you know gaining steam or not I mean it yes that boycott's a bit confusing

[00:54:10] because I think like Loblaws is the cheapest grocery store I mean maybe not Loblaw but

[00:54:14] like no frills and stuff so I mean you're you're boycotting Loblaw but you're probably

[00:54:18] spending more money in the process but well also like yeah I get a little confused with that

[00:54:23] boycott too because depending on what you're buying I've found that you know certain items

[00:54:30] will be cheaper at Loblaws or some of their brands and certain items will be cheaper at Metro

[00:54:34] and some of their brands you know or Sobeys and some of their brands like it really depends

[00:54:40] one thing that I found interesting yeah you wouldn't think so I went to Metro and we

[00:54:47] have a barbecue that's like a kind of wood barbecue yeah if you'd like so you buy like these

[00:54:52] like I think hardwood charcoal whatever and the bag at Metro was $11 but I'm like oh I'm

[00:54:59] going to Canadian Tire and you know I'll just buy it there because it's probably cheaper

[00:55:04] and I get to Canadian Tire I'm like huh it's more $13 yeah or 14 something like that

[00:55:10] but I couldn't really remember what the price was at Metro so I ended up buying one

[00:55:14] bag I'm like I'll still check which just kind of shows like you'd expect that this kind of

[00:55:20] stuff would be cheaper at Canadian Tire and even more so the small bag was actually better

[00:55:26] value than the large bag at Canadian Tire as well so the the large bag was double the size

[00:55:33] of the small one but was like essentially 10% more than buying two small bags and I looked

[00:55:40] at it I was like staring at it for like 30 seconds I'm looking at the size and I'm just

[00:55:45] doing the calculations I'm like how does that make sense usually you save when you buy more

[00:55:50] but it just goes to show that sometimes you know you might expect to pay less somewhere or

[00:55:56] more and it's actually not exactly what you expect Canadian Tire is notorious for like

[00:56:02] pricing things like crazy high and then marking them down like 80% like I'm sure

[00:56:09] everybody knows this walked into a Canadian Tire and there's this pot set or whatever that's

[00:56:14] 90% off but then you find it regular price somewhere else for almost the same as the sale

[00:56:18] price they're pretty bad no stuff like that it's crazy yeah but anyways it all goes to show

[00:56:24] that I find you know like the the boycott I find that a bit of a head scratcher especially

[00:56:30] you know maybe the intentions are good there obviously they want to show you know Loblaws

[00:56:35] they want to show that they won't necessarily have their business I think because of a price

[00:56:39] gauging that they're they're perceiving that Loblaws is doing more than the other grocers but

[00:56:45] you know not everyone actually has that luxury right if you don't have a car are you going

[00:56:50] to take public transit to go like you know five kilometers further to go to Asobe's or

[00:56:56] whatever it is so you don't buy at Loblaws that's right next to you yeah it's tough I

[00:57:00] feel like yeah if I were to guess I don't think it'll have a huge impact on results because A

[00:57:06] they're the cheapest like they're one of the cheapest grocers I think a lot of people they

[00:57:11] might do it for a while realize you know they're paying a ton of money and maybe go back

[00:57:15] and I think it just gets a lot of probably media spotlight because it's the biggest one

[00:57:20] and there's just a lot of focus on it right now but it's going to be interesting to see

[00:57:24] next quarter to see if it's actually been impacted they kind of played it down in the

[00:57:30] in the conference call but we'll see yeah yeah definitely well thank you everyone for listening

[00:57:35] if you haven't done so give us a review on whichever platform you're listening to us five

[00:57:40] star review definitely helps talk to a friend family member if they're looking for you know

[00:57:45] to learn about investing and but also you know listening to uh to us just having fun

[00:57:51] while we're talking about it I think that's why people listen to us you know religiously for

[00:57:55] those who listen to the podcast but aside from that we'll be back tomorrow with

[00:58:00] another part two of the earnings and news episode yeah thanks for listening everybody

[00:58:06] the Canadian investor podcast should not be construed as investment or financial advice

[00:58:11] the host and guest featured may own securities or assets discussed on this podcast always do

[00:58:18] your own due diligence or consult with a financial professional before making any financial

[00:58:24] or investment decisions