Motley Fool Money - Big Retail, Apple, and the Fight for "Taco Tuesday"

Episode Date: May 19, 2023

As reports of Apple's next device surfaced, major retailers highlighted the week's earnings. (0:21) Ron Gross and Jason Moser discuss: - Walmart's grocery division (once again) doing the heavy lifting in its latest results - Reports that Apple will unveil a $3,000 device at its developer conference in early June - Netflix impressing advertisers and Wall Street - The latest from Home Depot, Target, Foot Locker, and Deere (19:11) Scott Phillips, chief investment officer at Motley Fool Australia, shares the current state of play for investors Down Under, Australian stocks to watch, and predictions for this year's Rugby World Cup. (30:28) Ron and Jason discuss Taco Bell fighting to free the phrase "Taco Tuesday" from its current trademark holder and share two stocks on their radar: Owens Corning and Lowe's. Stocks discussed: WMT, HD, TGT, FL, AAPL, MSFT, DE, NFLX, DIS, TTD, ASX, AMZN, MDB, GOOG, GOOGL, TEAM, TNE, YUM, LOW, OC Host: Chris Hill Guests: Jason Moser, Ron Gross, Scott Phillips Engineer: Dan Boyd, Tim Sparks Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode is brought to you by KolaGard. Do you know what's really scary? Not screening for colon cancer when you turn 45. The Koloard test is non-invasive, requires no special prep or time off work, and ships right to your door. In just three simple steps, KolaGar takes the scare out of colon cancer screening. If you're 45 or older and at average risk, ask your health care provider about the KolaGard test. KoloGuard is available by prescription only. Learn more or request a prescription today at KolaGar.com slash screen. We've got a big week for retail and a big debate over Taco Tuesday. Yes, really.

Motley Fool Money starts now. That's why they call it Money. Cool Global headquarters. This is Motley Fool Money Radio Show. I'm Chris Hill, joining me in studio, Motley Fool's senior analyst, Jason Moser, and Ron Gross. Good to see you, as always, gentlemen. Hey, how are you doing, Chris? We've got the latest headlines from Wall Street.

We'll get a check on global markets with our guest, Scott Phillips. And as always, we've got a couple of stocks on our radar. But it was a big week for retail earnings, so we're going to start with the biggest one reporting. Walmart raised its full year guidance after delivering a first quarter report, highlighted by sales up more than 7%. And, Ron, we've seen this frequently over the past couple of years. Walmart's grocery business, kind of doing the heavy lifting here. Yeah, exactly.

Shoppers continue to gravitate to smaller package sizes, to store brands, because they're trying to manage their spending, and they continue to favor grocery spending over non-essentials, such as apparel, home goods, electronics. Those tend to have higher margins. But yes, they're focusing on grocery. This was a strong report. It was actually better than expected. As you mentioned, revenue and comp sales up about 7%.

Those are pretty strong numbers. Slightly slower growth, I will mention, compared with the previous quarter, but just slightly. And they did gain market share or management said they gained market share in grocery, so that they continue to execute there. E-commerce was up 27%. That's pretty strong, lifted by higher advertising revenue as they kind of focus on their marketplace and also sells through their pickup and delivery services.

So strong numbers there. Gross margins did narrow just a bit on a different mix in sales, but nothing to be concerned about inflation and food, although kind of on its way down, still 20% higher than two years ago. But operating up 17 percent, earnings up 13 percent, management lifted its outlook, as you say, and things look pretty good here at Walmart. Are you surprised that they raised their guidance because CEO Doug McMillan, I mean,

you mentioned the inflation. McMillan said on the call, inflation is creating uncertainty for us in the second half of this year. Well, I think they raised because this quarter was better than expected, so just on that you can raise. But I do think they're being cautious, as are other retailers. when they give guidance. Home Depot's first quarter revenue was lower than expected. Same store sales fell more than 4%. And the company lowered sales guidance for the full fiscal year. And despite all that, Jason, shares of Home Depot up a little bit this week. I'm not complaining. I'm a shareholder, but I am a little pleasantly surprised. I, too, am a shareholder, and I, too,

I'm very, very not disappointed with the way this week turned out. I mean, I know the stock being up, surprise some. I think, you know, when you look at everything in total, right, yeah, sure, they guided down, but they really set that tone for the year a quarter ago. And I don't think really there were any surprises as far as, you know, trepidation among the consumer, sort of a shift from spending on products to a shift on spending in services. And so that's all playing out here. I mean, there's nothing fundamentally wrong with the business at all. It's just it's exposed to greater macro forces that it has no control over. So the numbers themselves, not terribly inspiring, right? I mean, revenue $37.3 billion. It was actually down 4.2% from a year ago.

Comps down 4.5%. U.S. comps down 4.6%. Ultimately, earnings per share are $3.82 down from $0.9.9 a year ago. A lot of the metrics that matter, comp average ticket was up just 0.2%, but the transactions fell 5%. and big-ticket item comps were down 6.5%. Management did point out lumber deflation. I know we talk a lot about inflation, but in this case, lumber deflation, which is impacting the company's sales. That's my favorite kind of inflation. Exactly. And, you know, it did impact sales to the tune of about, it impacted average ticket to the tune of about 335 basis points. Remember, lumber is close to 10% of Home Depot's overall business. Put some numbers around this. They used framing lumber as an example, here. Framing lumber was approximately $422 per thousand board feet this quarter. Last year,

$1,170. So that's that depletion. It plays out on their top line in a bad way, but actually it's kind of helpful to their margins. So it's not all bad news. They paid out $2.1 billion in dividends. Got to love that. Repurchased approximately $3 billion in shares. That shares outstanding. It has come down 8.5% since 2019. So that's all good. I think in regard to guidance, Yeah, they pulled back a little bit. The earnings per share, they see declining now between 7 and 13% versus 5% just a quarter ago. But even with that guidance, the stock is still valued it around 18 times full-year estimates, which frankly is a pretty opportunistic look at this one.

Well, and you think about all of the pent-up demand in 2022, particularly over the summer. It makes sense that the guidance would not be amazing. Yeah, yep, absolutely. Target's first quarter results were better than expected with inventory levels continuing to improve. Shares down a little bit this week we're on, but it seemed like a somewhat similar quarter to what we saw out of Walmart. Except that Target focuses more on those bigger ticket non-essential items, and that's where the two diverge. Walmart was strong because they focused on grocery and essential. Target struggled

because they focus on the bigger ticket. And you can see that showing up in the numbers, which are better than expected in some circumstances, but pretty weak in general. Sales only a 0.5%. Comparable sales came in flat. Digital sales were down 3.4%. So we're seeing not great numbers here for the quarter. Sales of food and beverage were up, as we saw with Walmart, but things like apparel, home goods, electronics fell rather sharply. And discretionary categories make up 54% of targets annual sales. So if those are weak, the numbers are just going to come in week as well. Inventory was down 16%. They're trying to work through the success inventory that they've had since the pandemic when they were inventoried in the wrong direction.

Earnings down 6%. Second quarter guidance was weak, but management did maintain its full year guidance. But as we talked about with Walmart and them being conservative, executives use the word cautious 13 times during the earnings call. They're not feeling very confident about their visibility into the future. So only 20 times forward guidance. I like the company in general, but they are working through the environment and the inventory problems they had from the past. I feel like I'm rubbing off on Ron here a little bit. You're searching terminology.

How many times these things were used in the closet? For the extra mile for the listeners. I was just going to say, if you just had the past 15 months that CEO Brian Cornell had had, wouldn't you be using the word cautious over and over again? You'd be very cautious about how many times you use the word cautious. On a related note, Cornell, more so than really any other retail CEO this week was talking about organized retail theft, the challenge that they are faced. I know that this is something that every retail business deals with. Cornell was really talking about it as being a significant problem.

Is that something to watch if you're looking at Target over the next six to 12 months, how they deal with this more so than others? Absolutely, because they're calling out a big number, $500 million due to shrink or theft. That's a very big number. I almost can't see how it's going to be that big, so let's keep an eye on that. But they're not the only ones. Walmart mentioned it. Most major retailers are talking about it. It is a major problem in retail right now.

If you've got $3,000 burning a hole in your pocket, good news. There's a brand new gadget coming to market with your name on it. Details after the break, so stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser and Ron Gross. Shares of Foot Locker fell 25% on Friday after first quarter profits were solidly lower than Wall Street was expecting. The athletic apparel retailer also lowered guidance.

Ron, CEO Mary Dillon, did great things when she was running Alta Beauty. Boy, she's got her work cut up for her at Foot Locker. This is not going to be easy for her. She joined last year, and they developed what they're calling their lace-up strategy. Maybe too cute there, but their lace-up strategy. It includes moving away from shopping walls, closing 400 underperforming stores, decreasing their dependence on Nike, which was significant and improving their digital operation. Not working quite yet, Chris, because these numbers are very weak, and they were forced to lower guidance. Total sales down 11%. Same store sales down 9%.

They blame macroeconomic headwinds, including lower income tax refunds, changing vendor mix. They're repositioning their champs brand, and they had to take higher markdowns in order to move product. And they also did talk about shrink and theft as well. Adjusted profits down 57%. These are really weak numbers. They cut their guidance. They expect sales for the current year to fall between 6.5% and 8%. They did name a new CFO this week, but they've got their work to do.

Trading only 15 times guidance, probably appropriate. Maybe it should be even cheaper, in quotes. To bet on this company would be to bet on a significant turnaround. I was just going to say, you look at the stock devaluation. It's obviously cheaper today than it was last week. But it seems like, to use a phrase, Jason Moser, he's used in the past. It seems like you need to pack a lunch on this one. It's going to take a while, and they don't really seem to be very different to me

than a lot of the other apparel stores that you see in the average mall, so they have their work cut out for them. Apple is planning to hold its annual developers conference on June 5th, and details of the event are starting to leak out. The Wall Street Journal reported this week that Apple is expected to unveil a mixed reality headset, resembling a pair of ski goggles that comes with an external battery pack and a price tag of $3,000. Jason, I will not be among the first to buy this device, but if any company can pull this off, I have to believe it's Apple. Maybe. I think a consumer device for this nascent market in mixed reality cannot stay $3,000.

I think that's just prohibitively expensive, and I don't think very many people will be. clamoring to get that device. But it is Apple. There will be some. And that really is the power of their brand. And ultimately, the fact that they really make good stuff, right? As time goes on, we'll see that price come down. We'll see more and more experimentation with core use cases. It's just that standard sort of hardware thing. They introduce something new. It'll find its way into the market. Demand either materializes or it doesn't. If it doesn't, you bring the price down. I think at some point, though, the price is only part of the equation. Really, when it comes to this mixed-mixed-reality stuff, it's finding the use cases. And I think there are two opportunities

ultimately in play here. And I know a lot of the focus is on the consumer, right? Getting a head sight and escaping off into another world. But you look at industrial, augmented, virtual, mixed reality. Industrial has gained far more traction in recent years simply because of the clear and beneficial use cases. I mean, you're thinking of things like 3D step-by-step- operating or repair instructions, a dashboard of the analytics data to be able to help assess and complete a task. Think of things like healthcare. So you've got companies like PTC and ANSIS on the software side. Microsoft, with its hollowins, a lot of investments they've made there, not really working out either. Apple's just kind of sitting there biting its time, sort of

watching this market unfold. And I think that's the right thing to do, particularly with its scale and its resources. But, yeah, I would imagine $3,000 is not going to have that thing flying off the shelves. There are a couple interesting things at play here, one of which is the fact that, at least according to the report in the Wall Street Journal, this is more so than any new device launch that Apple has had, probably in its history. This thing is not ready to go. They are reportedly planning to come out with something that is kind of in the beta phase at this point. The other thing is, think back to earlier this month the response we saw for Alphabet. that. Google had its annual developers conference. The response was so positive to what they unveiled.

And by the way, this $3,000 device, this is not going to be the only thing Apple unveils at their developer conference. So from a stock perspective, it's going to be interesting to see what happens in early June the response to this and what may come in the market. Yeah, I mean, I don't think this is anything that is a tailwind or a headwind either for the business in the near term. I think it makes sense they need to get into this market at some point sooner rather than later, lest they just get passed by everyone. But again, it does feel like from the consumer's perspective, this really is a market that's still looking for those core use cases and the technology is only going to be able to do so much there.

Last week on the show, Andy Cross called out Deere as the stock on his radar. On Friday morning, Deere raised guidance after second quarter profits came in higher than expected. Did you tell me, Ron, how'd they do? They did well. And as you said, they were able to increase their guidance as supply chain problems ease. Not go away, but they're easing, and the company was able to benefit from higher prices. It's a very cyclical business, but they're in a strong part of the cycle right now, even an upgrade cycle.

You could probably call it. Sales are up 30%. There's demand by farmers for new equipment and parts to repair aging machinery that they haven't really upgraded in quite some time. Sales rose across each of the company's three segments on higher prices and volume. Their large farm equipment segment, which is their largest, makes up 53%. It rose 53% from a year earlier, and the profits more than doubled for that segment. So, real strong. Construction up 23%, small machinery up 16%. Margins widened as they controlled costs, and as those supply chain constraints, as I mentioned, it started to ease.

The one week part of their business was their financial services business. It's a very small part of the business, down significantly because of the movements around interest rates, but nothing to be concerned about. Earnings up 42 percent, raised guidance. Orders remain strong, even though crop commodity prices continue to come down. So if that continues, that's where the cycle is going to reverse at some point eventually. But for now, they felt like they could raise it. guidance, only trading 12 times forward, which is similar to where Caterpillar is now, so that makes

sense. John May is one of those executives whose timing is maybe a little unfortunate. He became CEO of Deere right before the pandemic. Kind of impressive that he's raising guidance at a time like this, particularly when you factor in, as Doug McMillan said, the uncertainty around inflation affects every business. Yeah, Deere has done a good job with new products bringing software to their products in a pretty big way, which will impact margins in a good way going forward. But it is cyclical. You can't really escape those macroeconomic cycles. So investing in Deer, you have to understand that. On Wednesday, Netflix held its upfront presentation to advertisers and said that its new ad-supported tier has nearly 5 million monthly active users. That must have been music to Wall Street's ears because on Thursday, shares of Netflix up 10%, Jason.

Yeah, I understand the enthusiasm here, and let's dig into why that's the case. First and foremost, it feels like the honeymoon is over here. If you want ad-free TV, you've got to prepare to pay up for it. Because a clear strategy here for these businesses going forward, the economics of ads-supported is they're very compelling for these businesses, so they're really trying to push more and more subscribers to those ad-supported models. You start with Netflix, for example, in the U.S., they noted in their most recent earnings report that ads. The ads plan has already reached a total average revenue per member, which is the

subscription plus the ad revenue that's greater than their standard plan. They now, thanks to their licensing deals, the ad support plan has on average around 95% content parity globally with their ad-free plans, right? So you're getting basically kind of apples to apples there. Going to Disney, you're looking at Disney, you've seen the same thing. Iager talked about, out on the call here, they have realized the economic benefits of the ad-supported plan. They're actually going to raise the price of the ad-free plans in order to create essentially more demand for the ad-supported plan because the ad-supported plan is so economically beneficial to the models there. They're seeing the same thing. Average revenue per users

just turning in some very promising numbers there. And then you look at something like Trade Desk, which is kind of the backbone of a lot of this programmatic advertising to begin with. They talk about hearing this language from Netflix regarding programmatic ads. They're obviously partnering with Disney on that front as well. You see a number of different ways to win in this space, but clearly Netflix, Disney, and the trade desk are three of the companies that are really kind of leading the way here, it seems. I'm so spoiled.

Every time I hit Fast Forward on a show and it says, Fast Forward is not enabled for the show. I'm like, oh, I just want to throw the remote. Well, and you're seeing more and more content getting on platforms like, I mean, freebie, right? That Amazon supported freebie offering. Have you seen jury duty? I mean, come on, guys. You've got to check that one out.

All right, guys, we'll see you later in the show. After the break, it's our man in Australia, Scott Phillips. This is Motley Full Money. Back to Motley Full Money. I'm Chris Hill. is the chief investing officer at Motley Fool Australia. He is also the host of a very popular investing podcast, which also goes by the name of Motley Fool Money. He joins me now from the Gold Coast. Scott, it's been too long. Thanks so much for making the time.

Chris, you are very kind, man. I'm always, always humbled to appear on the radio show. And, mate, can I say, I've drafted shamelessly off Motley Full Money. The original, the OG, called out the same thing because, hey, invitations, it's a serious form of flage. Rather, right? Absolutely. I do want to talk about the market in Australia, but I am curious what the view of the U.S. stock market is from your vantage point. At a high level, 2022 was the worst year in over a decade.

2023 here in the States has been dominated by, yes, on a business level, a lot of talk of AI, also at a macro level, a lot of discussion of interest rate hikes and the debt ceiling. And I'm curious, when you look at stocks in America, what stands out to you? Chris, I still believe that the, don't let our Australian listeners hear this. The U.S. market, the U.S. economy, has some of the very, very best businesses on the planet. That's no surprise to you or no surprise to your listeners. And I think what's been fascinating for Australian investors is the last 12 months, 2022, a particular, I should say, in Australia wasn't as bad as in the US because we have an abundance of resources companies

and banks in Australia. And despite some of the banking dramas you guys have been having, the last, 2020 was actually a relatively good year because the energy sector, which really is big in Australia, was really successful. So when we look at the US over the last 12, 18 months, I think there's been a bit of a surprise. A lot of our growth and tech socks got smashed as yours dear during 2020. The recovery of your market, not surprising at all. I am very excited about the future for American companies.

I think the work that's being done by some of the very best, biggest, fastest growing companies on the planet is happening on the NASDAQ of the New York Stock Exchange. While the index itself, great opportunity for Australian investors to jump into US stocks last year, but I am every bit as excited as I ever have been about the future of US business. of US listed companies of the value that's being created by some of the best businesses on the planet. What is the current state of play these days for Aussie investors? Based on comments that you've made on your show, things that you've written, we follow each other on Twitter, so based on some of your tweets, I get the sense that you think the ASX

is, I don't know if bargain is the right word, but it seems like an opportunity. I think that's right. I love the way you've phrased that, mate. I think there's always someone out there. You know this, your listeners know this. There's always someone out there who's prepared to say the next crash is coming or everything's going to be terrible. Watch out for the next bear market.

We know the usual suspects. If you look at the long-term history of the Australian Stock Exchange, the US stock markets, the world, develop world stock markets, they go up and to the right. Not in a straight line, not without pullbacks, not without years, like 2022. but the future is always bright. You know, the best time to buy shares is always today.

Not because necessarily I know what's going to happen tomorrow, but because if you look back over any stretch of time, the immense value created by investing in public markets has just been phenomenal. I've quite honestly, mate, for the last, I've been working for the Motley Fool. Not quite as long as you have, but for a long time now. And I have been saying since day one and today, and hopefully many years into the future, buy stocks today,

not because I'm making any macro forecasts or market forecasts. We all think that's a silly thing to try and do, but because the awesome power of compounding by some of the best companies on the planet is just something you don't want to stand the way of. Betting against that is crazy. So honestly, yeah, I actually do think right now, particularly for stock pickers in the Australian market, some of our companies are very expensive,

but there are a lot that are not, that are still suffering from market jitters, from pessimism, from concern about what might come next economically. But I think in three, five, and ten years, Tom, we'll look back and say, why did we let the next three months worry us when the ten years that followed that are very likely to be very good. So, yeah, I absolutely would be investing in general, as always, but I do think there is absolutely a great opportunity for stock pickers in the ASX. You and I have talked in the past about Domino's Pizza, among other companies based in the US as doing well in Australia.

For folks listening, what's another American business that you think is faring pretty well and connecting with either consumers or businesses in Australia? Yeah, that's a great question, mate. And I think what I hope your listeners know, that, I haven't seen the numbers recently, but not that many years ago, half of the revenue from the S&P 500 companies came outside the US. And if you open up any cupboard in Australia, if you work with any business in Australia, the number of US companies that we deal with and work with remains really strong. Mate, I'm going to, this won't surprise your listeners, it's not a particularly original answer,

but I'm a shareholder of Amazon, I'm a long-term shareholder of Amazon. I love that business. I think it's an amazing company. And it continues to do really, really well around the world. So if I can give your listeners an antipedean, a down-under perspective on Amazon, it is that it is making every bit of the same inroads here as it's been making in the US for many, many, many years. It remains an incredibly strong, incredibly successful business.

I think it will be for a long time to come. Some other businesses that I think, MongoDB, a business that you've talked about a lot, is a business that does continue to, again, make inroads here. The world of software is something Australian companies just don't compete. anywhere near as well as we do in other industries because the best software businesses, the most dominant global software businesses tend to be born over there where you are. And that, at the speed of the internet, we all know, is just phenomenally fast. The growth of that has been incredible.

I am, as you said, interested in AI and the growth of that. I think, and again, think about the cloud, the web businesses. Think about Microsoft's cloud business. Amazon's cloud business, again, Google, the same thing. I own shares in alphabet as well. These are just phenomenal, phenomenal businesses. And I think the growth of these around the world, I really want your listeners to know you can invest globally from right there at home

because of the sheer scale and breadth of some of your best businesses. Speaking of software, one Australian-based business that we talked recently on the show about was at Lassie. And let's go beyond that. What's one or two other publicly traded Australian businesses that you think more American should know about? Yeah, let me give you two, Chris. One is zero. The code in Australia is XRO.

It is a cloud accounting business. Some of your listeners will maybe using zero. It is available in the US. It's not anywhere near as dominant there as it is here. It's actually a New Zealand business, but Australia claims all the good New Zealand businesses as our own, so we'll keep doing that. It is ASX listed, though. is a company that has something like 70% market share in New Zealand.

It's the most dominant cloud accounting software package here in Australia, big in the UK, hoping to grow in the US. It is a really fantastic business, visionary leadership. It took the Salesforce software as a service model and really ran with it hard and continues to make every post a winner. The other one's a very different business called Technology One. You guys talk about enterprise resource planning software a lot. This is a company, TNE is the code on the ASX.

It is a company that basically provides enterprise software, as I said, for some really, really sticky customers. And if you're looking for defensive software, these guys provide software for government, education and healthcare. They are three sectors that aren't going away anytime soon. Their customers are pretty sticky and they're going to be around. Their earnings growth has just been almost staircase-like over the last 10, 15 years. They continue to get customers, their retention rate.

is above 99% in terms of the number of customers. It's a really, really great quality Australian software business that I think has a long, long way to run. I know you're passionate about investing, but I know there is something else coming up in a few months that you're also passionate about. And I'm talking, of course, about the Rugby World Cup. It's going to be held in France.

It's been 24 years, Scott, since Australia has won the Rugby World Cup. And I'm curious how you're feeling about the Wallabies chances. mate I am we are going to win this one no there is no question about it Chris we are absolutely lay down mazairs can I also say by the way the women's world cup is being held in Australia very soon too so we have two big world cups I feel very good about our chances in both I'm sorry to your Kiwi listeners to your UK listeners to your European listeners who think their teams are going to win I hate to break it to them I'm going to say he first and

exclusively Chris on Motley full money Australia will win both rugby world cups I have absolutely every confidence. That's, again, not even a question, mate. That might as well not even bother turning up. We're that good. You can check out the Australian version of Motley Fool money on whatever podcast app is your favorite. It is free. You get a different perspective on the stock market and you get more insights and analysis from this guy. Scott Phillips, always great talking to you. Thank you so much for being here. Chris, it's absolutely my pleasure. I'm, mate, I will not leave this podcast without thanking you for your many years of loyal service to the Motley Fool. More importantly, I think, to Motley Full Money and to your listeners. I am a loyal listener and have always been. We will miss

you dearly at the company. Your listeners will miss you even more, mate. Thank you very much for everything you've done for investors and for listeners across your time at the Motley Fool. We are very, very lucky and grateful for your service. I appreciate it, Scott. Thank you so much. Up next, Jason Moser and Ron Gross return. They've got a couple of stocks on their radar. You're listening to Motley Full Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy ourselves stocks based solely on what you hear.

Welcome back to Motley Fool Money, Chris Hill here in studio with Jason Moser and Ron Gross. Guys, where we sit right now in this studio, we are just two blocks away from the U.S. Patent and Trademark Office. And this is relevant because this week, Taco Bell petitioned the PTO to be able to use the phrase Taco Tuesday, which, of course, begs the question, Why can't they? That's because another restaurant chain holds the trademark on the phrase, and it is not the restaurant you may have guessed.

It is Taco Johns, a chain headquartered in Wyoming, and they have held the trademark on the phrase Taco Tuesday since 1989, Ron. I'm a little torn here because this is, look, Taco Bell is 20 times the size of Taco Johns. This is David versus Goliath. I'm kind of on Goliath's side, because Taco Bell isn't. say, we want the phrase. They're saying, hey, everybody should get to use this phrase. Well, since I own the trademark on the word Tuesday, I pay it a little bit every time they use Taco Tuesday. So, who am I to complain? But yeah, it's a little much for me. The history of this is fascinating. I mean, it started out as Taco Tuesday, T-W-O-S-D-A-Y, right?

And they were just saying, hey, we're going to say two tacos for 99 cents. It tried to gin up some sales back in, like, 1980 or something like that. It worked out. So then they kind of took it from here. It's fascinating to see the Patent and Trademark Office. They granted this trademark at 89. Attorneys say it's eligible for protection. Other attorneys feel like Taco Bell has a strong case here because U.S. Trademark Law, quote, unquote, prevents the registration of common phrases or phrases that become commonplace after a registration is granted. So ultimately, Chris, the biggest tragedy of all of this, it seems like the lawyers are ultimately the winners here. Am I right that LeBron James tried to do this as well?

He did. Unsuccessfully? He did. Yeah. Hmm. Give it to the people. This should belong to all of us. Before we get to the radar stocks, I need to mention something that came up earlier in the week,

an announcement that went out to podcast and radio trade media, that I will be leaving the Motley Fool at the end of the month. My last episode on the podcast is going to be May 30th, and I will, at that time, share some thoughts and answer some questions about my departure. but this is my last appearance on our radio show, and I wanted to say a quick word of thanks to the people who run our affiliate radio stations. We started Motley Full Money in February 2009. In January 2010, this became the first podcast to be heard on commercial radio.

And I know podcasting has grown in popularity over the years, but broadcast radio is an important form of media, and I'm proud of the fact that this show is now heard on more than 75 stations, making it the number one stock-investing radio show in America. The economics of Weekend Talk Radio are such that, rather than running original programs like ours, a lot of talk stations just sell the time to run things like hour-long commercials for health supplements. So I wanted to thank a few of the radio executives who made the decision to make this show available to their audience.

Robin Bertolucci in Los Angeles, Russ Reynolds in San Francisco, Lisa Wolfe right here in Washington, D.C., Renee York in Phoenix, Max Miller in Sacramento, and Janine Lee in Hartford, Connecticut. These are the early investors in Motley Full Money as a radio show. Their stamp of approval helped us get to where we are today. And I just wanted to thank them on my last appearance on the radio show. Well, said, Chris, and I'll be brief, so I don't get emotional here. But we've been doing this together for around 14 years, and it has been a highlight of my time here at the Fool. You've made it so easy and so fun, and it's been a true pleasure. We will miss you, but don't be a stranger, please.

I won't. I will echo those sentiments. I mean, 14 years is more great memories than I think probably any of us can really pull, pull. But one that will always stand out is when you and Dan and I loaded up the train and went up to New York City and taped market foolery on location at Shake Shack to celebrate their IPO. We had lunch. They brought us one of every dessert. It was just a sublime day, and that would be one that always stands out.

So thank you for everything, and we'll miss you. I appreciate that. Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd's going to hit you with the question. Ron, you're up first. What are you looking at this week? Dan, you're going to love it. I'm going with good old Owens Corning, O.C., largest manufacturer of fiberglass insulation,

and the second largest producer of asphalt roofing shingles in the U.S. If that doesn't get your blood pump, but Dan, I don't know what will. 30% of revenue generated internationally. This is the same Owen's courting that had to file for bankruptcy back in 2000 as a result of asbestos-related injuries. The company did reemerge six years later. The plan to reorganize included trust to resolve both the current and that future liability from that. Demand is obviously driven by new residential construction, repair and remodeling, increasingly difficult building codes that require. energy efficiency. Since initiating its dividend in 2014, increased its payout every year at a compound

annual rate of 12.5 percent. Also, reduce its share count by 23 percent over the same period. Currently has a 2 percent dividend yield, trading for a little over 10 times, which is relatively cheap compared to others in that industry. Dan, question about Owens Corning? Yeah, Ron. So what kind of equipment do you have at your house for insulation, insulation, and roofing. I know you're a big DIY guy, so you've got to be a big fan of some Owens Corning's products. Me and the Pink Panther are constantly insulating my ass. Jason Moser, what are you looking at this week? Well, Dan, I mean, you know, I am a little bit more of a DIY guy. I don't know how I can follow up Ron here, but I'm going to try. LOWS,

ticker L-O-W. We've got earnings for Lowe coming out on Tuesday morning next week. A fun fact for you all. The five-year charts here, we were talking about Home Depot earlier, Lowe's is up 165% of the last five years versus Home Depot's 75%. Now, Lowe's share account is down about 28% compared to Home Depot's 8.5%, so that has played into that calculus for sure. But just interesting to see, you know, for all of the talk and the credit we give to Home Depot, Lowe's has really brought the results these past five years. The question, of course, is given what we saw with Home Depot This week, what will things look like for lows next week?

They did talk about residential investment being under some pressure, talked about inflation, higher interest rates, a more cautious consumer. They are forecasting a slight decline in the home improvement market. And to that end, they did guide for sales ranging in 88 to 90 billion range, which would be down from a year ago. And then comps expected to be flat to down 2%. I think really the big question mark is, will we see revisions to that guidance, given what we will we?

we saw with Home Depot this week. I wouldn't be terribly surprised to see that, but we shall see. Dan, question about Lowe's? So not really a question, Chris, more of a comment. I always really enjoy lows a whole lot more than the Home Depot. I think it is a much better shopping experience. The stores are nicer. The staff is more knowledgeable. And I think it's just better. I always prefer a Lowe's to a Home Depot. That's really interesting. I guess, you know, I kind of go wherever it's most convenient. I have to go to Home Depot tomorrow. As a matter of fact, to pick up some deck wash.

Guys, I've got to... Said me never. One hell of a weekend plan. Let me tell you. By the way, plug for Ace Hardware. Don't sleep on Ace Hardware. Very strong experience. That's where I go get all of my Trager stuff, because it's really close to our house.

Yeah, they've got all the Trigger goodies. What do you want to add to your watch list, Dan? I'm going with Lowe's, Chris. I just like going. You know, as a homeowner, I think it's a great place. Jason Muser of Ron Gross. Guys, thanks for being here. Thanks, Chris.

That's going to do it for this week's Motley Full Money Radio show. The show is Mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you next time.