Yahoo Finance’s Ines Ferre discusses the impact of China’s recovery on US consumers, retail sales and companies including Starbucks, Disney and MGM Resorts.
Video Transcription
RACHELLE AKUFFO: Investors are keeping a close eye on China’s economic data this week as they provide insight into the momentum of the recovery. Month-to-month changes will be a key focus, especially for companies that have benefited from China’s economic improvements. With more on the influence of Chinese consumers on US companies, we have Ines Ferre from Yahoo Finance. Hey Ines.
INES FERRE: Hey, Rachelle, that’s right. And investors will pay close attention to the data that you just mentioned, especially when it comes to retail sales, especially when it comes to sales related to services, because remember, China’s lockdowns were pretty tight. So now that they’re lifted, companies are talking about what they’ve seen with consumers.
Consumers spend more on eating out. Consumers are also spending more when it comes to travel. And we’ve already seen some companies that have benefited from the recovery in China and some of them are the companies that you see on your screen there, like Starbucks, Disney, Procter & Gamble, Marriott.
For example, look at Starbucks, the fiscal second quarter, a major turning point for the company, which surprised the Street with a 3% increase in sales in China. De Straat had expected these to be lower. Starbucks has an expansion plan for China, increasing its footprint in China. And during their latest earnings calls, management spoke about the decision to continue opening stores during the pandemic despite disruptions. That decision is bearing fruit.
Onward to Disney. Disney’s international parks have been a bright spot for the company with Shanghai Disney Resort. That’s improvement, with management talking about higher turnout and improved financial results when it comes to Shanghai in their latest earnings calls.
Also look at MGM. MGM’s results blew it out of the park when it comes to MGM China, where their net sales were up 130% over the previous quarter. The end of the lockdowns is certainly very positive for the company. MGM is up 26% so far, Rachelle.
RACHELLE AKUFFO: Okay, great stuff there. Ines Ferre monitors some of those effects there and is there for us. Thank you.
