BNN - Friday, May 24, 2024 - 01:00 p.m. (ET) - Segment #1

tlf on a tsx. >> How low welcome to training day. I'm amber kanwar. Here are your trending dre's this hour guild and shares moving higher. Glenn chin mandy is back in a surprise turn of events. The entire board, including ceo vince tyra announcing their reserva there that they were leaving the company. Their resignations last night. So gun-shy mandy back in at the helm, the stock up 4%. But what happens next? Is this really a past outperformance? We'll get perspective from an analyst coming up, td kicking things up with respect to bank earnings. They certainly have their own issues to contend with. But when you look at the quality of the outside of their anti-money laundering issues, what did it tell us about the transit we're going to see from the other big banks set to report nigel d'souza of veritas asked will be joining us. And lastly, doing the hope to poke that is shares at dekkers. The owner of hoka running shoes surging here up 14% as sales in that shoe as well as was coming in significantly higher than expected. All this and more coming up on trading day. But first, here's a look at some of the top stories we're tracking for you right here in the bnn bloomberg newsroom. Spending by canadian consumers rebounded last month, early numbers from statscan indicate that retail sales rose 0.7% in april. That would be the fastest pace since last december. If the number does hold, it will be a reversal of a negative trend. Retail sales fell for the for the 3rd straight month in march and are still below levels seen in december. London drugs says cyber criminals who stole electronic files from its corporate head office last month have released some of the date after the company refused to pay a ransom. The retailer says the files may contain employ information, calling it quote, deeply distressing situation. London drugs says it was unwilling and unable to pay a ransom to hackers. Eli lilly says it will spend more than 5 billion dollars us to be as production of the king greeted in its weight loss in diabetes shots. The investment is the largest in the company's history and comes after a surge in demand led to shortages will lose weight loss and diabetes treatments generated more than 2 million dollars in sales in the 1st quarter of this year. We're seeing a recovery in the markets following 2 straight sessions of losses. The tsx looming higher at a nice clip here, not quite at all-time high levels, but we do have a pretty broad based rally with 10 of the 11 sectors moving up energy and materials rebound here. You've also got some strength and the financials. And as we take a look at the tone south of the border, also recovering here and broad based 10 of the 11 sectors more risk on bent with tech stocks, utilities. Well, I guess that's at risk on, but and tech rallying together these days. They do talk about utilities as a risk-on trade becase of its possible ai exposure. Hello, you're watching trading day bnn bloomberg. I'm amber kanwar. Well, our top story throughout the day has been about guild. And in a stunning turn of events clinch a mandy is set to return as ceo after guild and entire board of directors and chief executive quit on thursday. This comes after a 5 month battle with an activist investor. While several of them over the future of the canadian clothing maker mass resignation marking a dramatic win for the investment firm rounding west, which owns about 5 percent of guild and share. Despite all of this, our next guest is still lukewarm on the prospects for jailed. And let's bring in david swartz, senior equity analyst at morningstar who covers guild and with a hold rating. David, thanks so much for joining us. First, let's just assess what's happened in the last 24 hours. A resignation of the board and the ceo and the reinstatement of sure. Mandy and the first reaction by investors is to bid the stock up.

>> Yeah, I think investors are happy that crisis is finally ended after months of drama. And this up in was pretty obvious going to it was pretty clear when the proxy advisory firms came, came out in support of the activists a few days ago that the existing board had very little chance to win. And so I think it's, it's a little bit of a positive that the it did and as it did and also, I think people are optimistic that 2 mommies return will revitalize the company and that he is the right person to run the company for years to come. We'll let's talk about that because it's part of that are short announcement yesterday. >> The board announced that it halted all discussions on a previously announced sail process. Now that sell process also put a bit up in the stock what do think about that? Do you think the shame? And even though he's back presumably as an operator, that him and his board should be looking at a sales process and keep that going. >> I don't necessarily think that the company needs to be sold. We were very, we were told very little about the sales process. It was all kind of a apparently it wasn't. It was a unsolicited offer from somebody somewhere, but we did quite sure or what the offer was. So the this sale process never seem to be all that, which and there certainly were suggestions that maybe it was kind of a distraction from the proxy fight and that the board had kind been going along with it in an attempt to try to keep their but no. And the think mcgill there needs to be sold. I do think the stock is a little bit I ferry both the new york and toronto shares are below where the stock is today by a few so i, I don't know. So you think the stock is undervalued right now, but that doesn't mean that I don't think that the company has a future. I think that there are opportunities for growth ago, then and we'll have to see what happens. >> What we need to hear from should mandy from the board about what they're going to do because in many ways, I think the bar has been raised right? They fought so hard to say this is the person should be running the company. What do they need to hear what it, what do they need to tell you the investors to prove that? >> Yeah, a certain lot of pressure after millions of dollars were spent by both sides in trying to get reinstated as there were allegations that he had sort of checked out as before. Right now he's going to be under a lot of pressure to really perform and perform the company, you know, was on strategic plan that he himself had introduced 2 years ago. It's unclear to this day exactly why he didn't quite believe in the strategic plan, even though he was behind developing in the for first place. It's also unclear as to what will happen. That's going to be all that much different now browning west, the actor shareholder did release a power point which had a number of suggestions on things that could guild, including moving a lot of the production from latin america, specifically honduras to bangladesh. We're gildan has been building a production facility, but I don't actually think that's feasible as far as they know, the bangladesh factory isn't even have the capacity to take all the capacity from honduras. And then there's never really been the plan. The browning west planned included a number market share gains in different categories that are kind of unrealistic. If it was really that easy to gain market share in industry. You wonder why she money didn't do it before when he was a he is going to be under pressure just reports, some strong numbers in market share gains because that's what we've been promised by the activists. Well, and at the same time, this is a company that's operating. >> In a macro environment, that as we see from other retailers, maybe isn't terribly robust right now. Yeah, it's a pretty difficult period apparel at the moment. Now, I think he'll is in pretty decent shape of categories that it sells into are different than some others. >> But even basics like underwear and t-shirts, they're not sales right now are not super strong. One of the problems of gill, then over the years that the company has very little visibility over its actual consumer demand because it does sell to a lot of print shops and to distribute years. It's not always clear. I think sometimes where the guild and knows if the demand is going to develop or not and guild products to tend to be kind of cyclical because it's and markets really have a lot to do with the industry economy in group of and sand marketing spending and things like that, which is different than some other apparel firms. And it doesn't mean that gill, then sometimes we'll go into periods of of a down when the industry economy is not as strong. >> This I mean, is a little

harder to model, but I wonder is an analyst, how you think about you know, something like the softer factors like corporate culture. This is a company that just had a completely different co for the last 5 months, he was immediately under fire. And now you know, a familiar face is kind of coming back. You know, maybe a little bit bruised or battle worn from over the last 5 months. How do you think about how that factors into the operations, the culture of the business? >> Yeah, I feel kind of bad for vince tyra because they actually wanted him to be fired before he actually started the so it wasn't anything that he they resist an immediate negative reaction to the firing of glen now there have been reports just recently that a number of executives, a guild and including the vice presidential level and above had wanted somebody to so there was a risk. And browning west said this publicly. Now, of course, they were biased. Browning west said that if she monti was not returned, that number executives a guild and we're going to leave the company. So it does seem that perhaps there were a lot of executives, a gill then that want your money to return. And so they'll be happy about how this all played out. However, you got to think a fight this brutal is going to have some negative impact on the company. I don't know that necessarily will have a big impact that that's going to show up in the numbers. All right, thank you very much, david. For all of your insight will continue to follow the story. That's david sports joining us from morningstar. We're going to take a quick break when we come back. Markets are recovering from yesterday's sell-off. >> We'll get some perspective with mike minaker when we come back. -If you're looking for an investment with a strong, consistent track record, maybe it's time to look at a new approach. -Last quarter Capital Direct investors saw a return of over eight percent. That's impressive. It feels good to help Canadian homeowners accomplish their dreams. Find out why so many people have been trusting Capital Direct for over sixteen years. -If you'd like to invest along with us, visit us online or speak to your financial advisor today and ask for a copy of our offering memorandum. CapitalDirect.ca Take advantage of historically high yields while reducing risk. Td Asset Management offers a large suite of active and passive fixed income investment solutions that can provide income and stability to your portfolio. Td Asset Management. Find a great deal foryour ideal hotel.Open trivago, type inwhere you want t select your check-in andcheck-out dates and search. Compare prices forthe same hotel and save up to $50 a night. Hotel? trivago. This is what your ear looks like filled with wax. Here's a cotton swab. Watch. It just pushes the wax in. Now here's Wush, the new, safe and effective way to clean your ears. Just Wush the wax out. That's insane. The triple stream safely clears dirt and wax buildup. It feels incredible. Get 15% off and free shipping at Wush.ca If you are an entrepreneur, you know what it means to be always invested. Grabbing hold of an idea and seeing it through, meeting old challenges with fresh solutions and believing in the power of tomorrow. We know because we're the exchange for entrepreneurs and we're always investing in public markets, in business, in growth, in you. >> Markets are in recovery mode right now to a pretty sharp selloff yesterday. Let's bring in mike vinocur, he's portfolio manager at and the wealth partners. Part of I a private. Well, here we are taking a look at some nice green on our screen. Yesterday was a pretty washout day and we thought in video is going saved. The market really just saved it was the rose on titanic. She just saved herself on that door board. You know, the fed and rate cuts. And that prospect seemed to really weigh on things yesterday. >> I think that market was a little bit there was a lot of anticipation into the print, the print was good. But if you look at the point account, I think markets would have been down a heck of a lot more had, you know, nvidia's action hadn't been, but you're saying it, you know, in the underneath of the market. Plumbing right we've known about the fed, we've known about where the economy is, these are not new topics were

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