make any moves >> apparel, 6% of u.s. imports pays 51% of all tariffs collected and those may be going up that does it for "the exchange." i'll join tyler on "power lunch" which begins right now. >> yes, it does. thank you, kelly see you in a minute. i'm tyler mathisen welcome everybody to "power lunch. new at 2:00 today, stocks sinking on a slew of weak economic data but good news on those trade talks, is it time now to retreat from some of those positions you may have put on or will the market just keep on rallying? plus, shares of domino's down on weak earnings. brands soaring on its results. we have the ceo of both companies here and they brought food the fallout from nike's big shoe fail chris "mad dog" rousseau will weigh in as "power lunch" begins right now. >> let's bring you up to date on

the markets right now. major averages are down on the weak economic data numbers on manufacturing, durable goods orders and home sales, a little bit disappointing. we are, however, off the lows of the day. tesla, one of the big stocks we are watching right now, shares taking a hit following news that consumer reports no longer recommends the model 3 kelli? >> tyler, thank you. the latest on trade negotiations between the u.s. and china reports of significant progress are being made on some key issues kayla tausche has the very latest kayla? >> principipals have been shuttling back and forth with the eisenhower building and the trade representative, what's expected to be a day of negotiations with the formal indian treaty room when the press got a glimpse, a somber food with hands folded by the officials at the table the two sides trying to hash out half a dozen areas of agreement

on structural issues that started this trade war in the first place and the u.s. also wants china to make a handful of concessions in the coming weeks on things like making more purchases of u.s. goods and rolling back tariffs that preceded this current conflict it's whether china will agree to any of this. the embassy of china in the u.s. declined to comment but suggested that a statement may be coming from the delegation that would potentially signal positive movement. >> there you see some of the officials coming out of one of the buildings where they've been doing some of the negotiating and the meetings how close is the u.s. and china to a meaningful deal on trade? stephen and former undersecretary libby at pimco. welcome to both of you

stephen, let me begin with you what's your spidey sense tell you about what's going on? >> i guess, tyler, the real question is what would a deal look like? so i think there will be something positive to announce clearly, you're seeing some smoke signals to suggest that. but as kayla said, the question is, will they get at the real heart issues the president said a real deal must include those and those are going to be tough to get done. >> just so all the viewers and yours truly understands, when you say the word structural reforms, what are we talking about? >> it's not buying more soybeans, corn, sohrgum, fundamentally, not what the real issues are as it relates to trade. it revolves around the state support of business in china,

the so-called soes, the state owned enterprises and the support they get from the state to create an unlevel playing field for u.s. and other non-chinese companies and the counterfeiting and theft of intellectual property which some estimates suggest cost our economy as much as $50 billion a year. >> libby, if these structural reforms that stefan just talks about are really the key to a, quote, real deal, that would imply that china would have to change the way they're doing business for a generation. will they do that or just wait out president trump? >> that's an excellent point the reason we anticipated this escalation with china on trade back in 2018 because that very reason that sort of the heart of this section 301 investigation as stefan laid out, the more structural fundamental issues

that are sort of integral to the china 2025 industrial policy, so we completely agree that if this were about the trade deficit, buying more l&g and boeing airplanes, there would have been a deal last may. this is more structural and those things are going to be much harder to come by you have to remember that we've been negotiating with the chinese over these very issues for years. under the obama administration and under the bush administration and we haven't really gotten very much but a lot of promises made and haven't been able to honor them. that's why ustr lighthizer is so focused, not only on the promises that are being made but also, can they enforce those promises i think that's the big issue >> stefan, exactly what i was going to ask you any dole should be com comprehensive, sustainable and enforceab enforceable. what would enforceable look like >> related to these structural

issues, understanding what support they get from local and for v provincial governments let alone the state government is going to be hard for us to see and monitor and as a result, the things negotiators are considering is some sort of snapback mechanism where they see these are not actually or the deal agreed to not lived up to, tariffs can snap back to be put in place to create at least some mechanism to keep people honest >> i just wonder how the markets would feel about that. >> libby, as you game plan the next ten days and it's going to be a full ten days as the president goes other to hanoi to meet with kim jong-un on an entirely different matter, how do you see this playing out? in other words, when march 1 comes, or march, what does the announcement look like and include? what gets punted, what gets resolved and where do we stand on the increase on $200 billion

worth of tariffs on chinese g d >> the market expectations i our base case as well, we won't be as surprised if there were not a delay or extension to the deadline the march 1st deadline moves maybe 60 days out to some time in may, so i don't know if we're going to actually see an announcement of a big deal you might have a down payment to a bigger deal. so some of the things where they have been able to make progress might be announced, but we highly doubt that in the next 8 days or so, they're going to be able to address, again, many of these big structural issues. they've made, you know, a lot of progress this is only 90 days and as stefan knows, these things usually take not months but usually years so the fact they've made so much progress is notable, but we still think there's a lot of heavy lifting to do. >> quick answer, libby if what happens is what you

predict there, basically, a punt, is that going to be enough to satisfy the markets very quickly >> i think the markets are priced in on most of that punt i think what they have not priced in is an escalation of tariffs. if we get that outcome, that's going to be a lot. >> tyler, i think that's the very reason why we're not going to see that happen because the president is very focused on the stock market and the stock market reaction and i think raising tariffs here, there would be actually a reasonably profound market reaction which we're not going to see, we're not going to see the sort of structural sustainable enforcement deal done, i think, in a week, so resuas a result, pulling the tariffs away, as libby suggested, kick the can down the road. >> stefan selig and libby kantrill, you as well. the philly fed manufacturing index into negative territory

for the first time in nearly three years. durable goods rose but less than expected and existing home sales lowest level in three years. that's the bad news but salem president on squawk box earlier today did provide some optimism for the market >> the message from my point of view is the normalization process in the united states is coming to an end on rates, we've raised rates about 225 basis points from where they were initially. the balance sheet, we've got that decision hopefully coming up in the next couple of meetings so i think we're at a good place today. >> should investors dive into the market or is it time to retreat? let's bring in cnbc contributor michael far, president and ceo of far, miller and washington and joe, senior strategist with bessemer trust welcome guys. >> thank you >> michael far, let's start with you and kind of how you put a

period on the sentence today is it weak data, therefore, the fed is doing less than we thought or is the data not so bad and what does it mean for investors? >> short-term, weak data i don't think it changes what the fed already told us they were going to do sort of in december. particularly as we've seen now, tapping on the brakes. moved to the sideline, had their hike we heard last week in steve liesman's interview, very important interview, suggesting even the runoff of the fed's portfolio might be paused over the summer fed president mester and i were speaking on tuesday and didn't nail it down to the summer but thought that was a reasonable time she also said there was no recession on her forecast for the next three years so we're hearing some positive

messages from the fed. the market, of course, is already advanced pretty well on that news but i think this looks to be kind of a smooth sailing at least from the perspective of monetary policy for stocks >> joe, where would you recommend investors position right now? >> i think it's recognizing that there are some pretty meaningful differences today, relative to a lot of the headlines and risks facing back in december and that's why they've rallied as they have. economic data suggests it's expanding and off of our cyclical peaks you have to recognize, we've seen a pretty powerful market rally so far this year and it's quite possible the vast majority of the gains in the market for this business cycle are behind us for that reason, we continue to recommend that investors proceed with a little bit of caution we want to sell a little bit into this market strength. it doesn't suggest that you take risk off the table entirely, but

perhaps, it is prudent to take incremental steps at derisking a portfolio into the market strength. >> amen to what joe just said. we've seen a rally off the lows of almost 20% depending which barometer you look at. has the market therefore discounted too much or all it's going to, positive news, on trade? and is that a banana peel out there? >> you always ask tougher questions. i think what joe said was very important though because what drove the market down and the risk we saw in december, i think, more clearly than we see now in the rearview mirror was the fed. the fed raising rates then and were they going to raise rates more and the stocks go back up i think that's probably the biggest driver now i think there's still more upside, tyler, to answer your question should we get a material trade resolution probably is going to be a more kick the can down the load, but there's still room over the

balance of the year for stocks to see an upside surprise from a positive trade resolution with china. could there be a banana peel underneath that? what happens if we don't get anything from china? we see another return with a risk returning to stocks. >> joe, it feels to me like from what you just said implicit in that is the idea that maybe most of the good news is already priced in. >> i think that's just the reality that we have to come to terms with i mean, i agree with the comments that were made. there probably is still upside in the market from here, but where are the risks? are they skewed to the upside or the downside i argue, you know, as far as trade policy is concerned, markets priced in some resolution but acknowledge the fact there might be bumps along the road and as far as fed policy is concerned, look, i mean, if fed made it very clear in the comments even earlier

this morning have made it clear that we are nearing the end of the tightening cycle and part of that reason is there's no urgency. the fed can afford to be patient when inflation is non-existence but to the extent inflation picks up, i think things will change there and recognize the risk the fed may raise interest rates later on this year >> folks, thank you very much. appreciate it. today, we put the lunch in "power lunch." shares of dine equity behind applebee's and ihop but domino's pizza down 9 rich allison is here he's next and he brought pizza >> there you go. >> i am hungry >> at long last. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum-

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domino's missing analyst efforts on the t-- estimates despite the miss, this marks the 31st consecutive quarter of positive comps for domino's as the company continues the strategy fortressing shorten delivery time for drivers and increased access for customers and domino's increased the quarterly dividends by 18% to 65 cents per share. joining us right now for "power lunch" exclusive is rick allison, the ceo of domino's

>> thank you very figure me. >> wall street is unhappy with today's report do you think it's wrong? >> we're quite pleased with the result particularly with our business in the u.s we've continued to deliver double digit retail sales growth in the u.s 31 consecutive quarters in a 5.6 quarter, we were very happy with disappointed with the international. it's our 100th consecutive quarter of positive comps but 2.4%, lower than what we're used to and the retail growth very strong at accounting for foreign currency, almost 9% for the quarter. >> i love to dig into the u.s. comp number. as you mentioned, up 5.6%. a bit shy of analyst expectations but driven by traffic. you talked about quite a bit on the phone. does that lower than expected number signal consumer slowdown

in the u.s.? sit a result of the fortressing strategy i mentioned in the intro opening up more stores or analysts overly optimistic >> there is from the fortressing strategy we do have as we mentioned in our investor day in january about a point to a point and a half of head wind on the comp because we have carving up our territories to get closer to our customers. that's a risk we're willing to make and how we grow in a healthy way over the long-term. >> can i ask you about the business of dividends and share buybacks these days? do you pay attention to the proposals on the early campaign trail? rubio out there saying he might tax buybacks as implied income basicall

basically. as a company, how do you do the most efficient way >> in 2011 and 2018, returned cash to shareholders through buybacks, ordinary dividends, special dividends. >> what would have happened to the $3 million if you didn't do that i know it's hard to just say but some people say, are you going to pay your workers more invest more or just sit in the bank >> we'll talk about 2018 for an example. in 2018, capital spending up $30 million over where we were in '17. we built a supply chain center right here in new jersey we've got two more projects under way. one in south carolina and one in texas. we raised wages across the country and we opened up in the u.s. another 258 stores with about a dozen of those corporate stores we're investing in the business and continuing to invest in

technology that's always the first line for our cash what can we do to invest in our business and then from there, our responsibility is to return cash to our shareholders >> a phone call to delivery. what's the average delivery time with app use >> sure. we're better than we've ever been in the business and the neighborhood of about 25, 26 minutes on average some of our top performing fr franchisees below 20 minutes on average. >> how many does the typical franchisee own >> about seven stores. just shy of seven. >> wow. >> in 2018, the average franchisee cash flowed well in excess of $900,000 across those seven stores, but about $137,000 to $140,000 per unit. >> i love to ask about labor and technology domino's has long been the

leader with consumer technology, ordering on the app, getting it to you quickly but labor costs are there no matter what your business model is within this part of the economy. any plans to kind of turn that technology around and use it on the back end of the business to cut your labor costs >> so we're working on things in our stores to make it more efficient. the labor is expensive but the market is so tight right now at 4% or lower unemployment we're investing in technology. we have an inventory app just this past year voice activated, so our store managers can walk through the cooler at the end of the evening and say what's in the cooler it takes a significant amount of time in the task and beyond that in the long-term, what takes labor costs down is fortressing markets and shortening the delivery radius from our stores. so if we've got to drive nine

minutes out and back, there's a significant cost to that when it's four and five minutes, dramatic change in labor cost. >> gosh, it smells good here. >> sure does, doesn't it >> what is that, sausage and peppers over there bring it right on over this is not a personal pizza this is a tyler pizza. >> that looks fantastic. thank you. >> thanks so much. >> kate, thank you as well. a february to forget for three quarters of the stocks up 3% but alphabet, facebook and amazon all lower another facing issues is apple the company taking steps to impact will it work that's coming up on "power lunch.

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welcome back to "power lunch. it's time for "trading nation" and have the stofang stocks lost their bite in february, underperforming in the tech department. matt mayly and erin gibbs. what are the charts telling you? >> i mean, i think this is not

something to be concerned about overall. for last year, last summer, the few years before that, everybody was loaded to the gills. and then when the market got hit, this group of badly underperformed, really underperformed in a major way. all these investors started dumping the group and then when the market bounced back, it's slightly underperformed again. >> but matt -- do you think, and i take your point about it not hurting the broader market but will people invest in fang now, do you think >> you know, i think they'll do fine, but i think they'll only do as well as the rest of the market the money out of fang is redistributed into other names like the semiconductor stock you've seen that group outperform nicely. so if i want to look at one name, i suppose i would look at google here, but the rest of the charts, look at amazon, it's

done nothing since january 7th that's a problem >> erin, what do you think when you look at the fundamentals of the business a good place to be >> a few of them aren't so great. we see this as a rotation out of the megacap growth stocks into a wider distribution, broader market as well as value. and when you look at amazon and google, they're looking at 8% growth single digit growth. these are no longer names and super pricey but underperformed for the rest of the year one stock we still love is netflix. it's expected to grow at 50% earnings profit growth for the next three years and valuation is really come down, below the three year average and not overpriced when you're looking at the type of growth and really nice and steady. we're not seeing this huge contraction we see in the other names. we see decline because people are adjusting to the fact

they're no longer. >> someone else will have to take facebook and amazon thanks guys. appreciate it. thanks for joining us today. for more "trading nation," follow on the web site or twitter @tradingnation. a high profile sneaker malfunction. nike scuffed after a college basketball star was injured wearing their product. plus, apple and goldman sachs to team up on a credit card is it a golden opportunity save some room more food coming huge "power lunch" with the ceo of dime brands. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> in rising low volatility markets, short-term pullbacks can often represent great buying opportunities. but picking exact tops and bottoms is a tricky game one approach is to consider waiting for the second consecutive update after a

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i'm bill griffeth. here is your cnbc news update at this hour. relatives of the victims of that fire that killed at least 110

people in bangladesh seen grieving outside of a hospital today. the blast last night burned a four story building before spreading. hundreds of people had rushed to the hospital to search for missing relatives and loved ones. secretary of state mike pompeo spoke with craig melvin and weighed in on the alabama woman who joined isis and now wants to come home. >> now over 800 terrorists that are being helped, foreign terrorist fighters in syria today. she's just one of them she's a terrorist. she's not a u.s. citizen she ought not return to this country. meanwhile, the fda proposing new regulations that would update the requirements of most sunscreen products sold over the counter. experts also suggest that products that combine sunscreen with insect repellents should not be considered safe for use and with that, you're you want -- you're up to date right now. shares of nike are lower

after an embarrassing incident that took place on national television one of the sneakers literally fell apart during a game eric chemee is here to show it it wasn't just any game and it wasn't just any player. >> it was the most expensive, most hyped college basketball game of the year the tickets for $2500 and the reason the tickets so expensive, this was the first time he touched the ball it was the first minute of the game, goes falling down. his shoe falls apart he sprains his knee. he doesn't return the rest of the game barack obama was sitting in the second row and see him pointing as soon as it happened saying he broke his shoe you could imagine all the people who spent up to $10,000 to see that game and they didn't get to see it we watch it last night, like, this is such a waste of time it was an interesting story but to see what would happen. >> this is the probable college player of the year >> number one team

>> the number one team >> so nike says and wishes zion a speedy recovery and the quality and performance of importance while this was an isolated occurrence, working to identify the issue but there's a lot of reactions here going on. people say, what does it mean for nike's stock you can go back when they had jerseys falling apart in the nba and it was fine. stock was up 50% since then. the s&p only up 7% since then. if this is like that, maybe not going to matter. marketing estima estimates nega media attention radio tv and online news and the overreaction of lawsuits, they should change the nba's one and done rule because freshmen like him have to play in college and the broken college sports system he doesn't get paid, gets injured. losing money he never got in the first place. puma, another shoe maker, tweeted out, this wouldn't have happened in their pumas.

maybe said, it might have happened in pumas. >> i don't know why they deleted it >> chris "mad dog" rhue zo, host of the mad dog radio channel on high heat with christopher rousseau on the mlb network. great to see you again or hear from you how bad is this for nike >> great to be on, tyler, kelly. i don't think it's that big of a deal nike is so involved in sports. this is a snafu. it looks bad but i don't think it's a major injury. it probably won't play a week or so and miss a game this will blow over. they're not going to stop wearing nikes because of this. i heard eric, probably lost $12 million. they have more money they can burn anyway. i don't think there's any long lasting ramifications. i think the interesting thing, what i'm most interested in,

while he shouldn't be playing college basketball to jeopardize his future income. they are playing for a championship there comes a point, you're supposed to love it and winning an ncaa title is supposed to mean something kareem won ncaa titles, russell won ncaa titles. there's a famous game in the ncaa basketball tournament, zion got a chance to participate in one. >> and that's coming up. >> next month. with a legendary coach now he's played 25 games and now because he had, albeit scary, he had, seems to be hopefully a harmless incident where he doesn't play a game. now go overreact and tell all freshmen never to play college basketball that's ridiculous. >> let me ask you this because as i understand it, nike's been the team sponsor or whatever you want to call it, duped, wearing the sneakers for decades zion is a very unusual guy

what is he, 285 pounds, he'd be the second heaviest nba player right now, chris was there a case to be made he should have been able, if asked for it, he should have gotten specialized footwear >> man, i'm sure there is. i don't know maybe he did get some sort of specialized footwear the relationship between duke and nike krzyzewski cares about his players and a million team doctors. duke is a college team but run professionally they've got more people, shooting coaches, health doctors, duke does it the way you're supposed to do it a little school academics as well i'm sure they have looked at all issues with shoewear regarding their players. he's important to duke too as you said, those tickets are expensive and the only reason they were is because this is the only time that zion is ever going to play against north carolina at home because he's going to play in the nba next year and this is the first visit for the tar heels into that little gym

nine miles apart and everybody wanted to see zion play his only ever game against their rival. that's why the tickets were expensive. so that's, it wasn't anything but that but he likes the college experience he's not going to play next year he's a one and done. the number one pick. people think he may not have been as great in the nba doesn't shoot the ball that great. we will see but the bottom line, he's got to play and got a championship the games are on television. cbs, final four. i mean, come on, fans. >> he reminds me, chris, of the former unlv, by body type and the kind of game he plays. >> good point. >> what if you allowed some of these very high profile college football players to be insured against injury >> i don't know how that works with advisers, with

universities, i understand you want to protect, and i can see it in football we have seen this development in football a lot, college football nick sat out the rest of the year for ohio state. the kids don't play in the ball games unless it's for championships. we've seen it in college football but the threat of injury in college football is far more severe. you could lose your career in one snap you're not in college basketball i mean, you might lose a year, but, you know, it would have to be awfully freaky to lose your career, so that's why it hasn't been discussed about insurance and all that listen, i think the play, he won't play saturday at syracuse and how weird is that going to be. >> very. >> because the boeheim thing i don't know, he shouldn't coach in the game. i think it's weird if he does but got duke-syracuse and zion not going to play, i don't know

about boeheim but be shocked if zion doesn't play the rest of the year in college basketball really surprised you guys handle what this means. >> you've got a show, chris, but we'll keep you. >> i love to talk. i could talk all day what was the up, kelly >> thank you so much for joining us >> a couple of things. you say zion, it's been reported he's got insurance $10 million if he doesn't get draft in the first ten or 15 spots. so you might not get drafted. >> he gets paid that amount if he gets injured? >> $10 million if not in the first and made his points already and doesn't need to play the rest of the year >> he was referring to the coach of syracuse, jim boeheim, an accident took place apparently in front of him. the driver of the car got out and coach boeheim accidentally hit him and injured. >> it's a danger outside at

night. on a highway. >> on an interstate. >> have we heard anything from syracuse that is now duke goes to syracuse >> that happened after this duke thing happened so even later news >> after a game where the syracuse beat louisville >> those tickets i'm sure would have also been there before, obviously, zion got injured. >> eric, thank you very much >> so much we could talk about. let's talk apple, shall we shares down 20% over the next six months concerns about slowing iphone sales up next, latest move to diversify. we'll ask an analyst if he thinks the company's moves are going to pay off at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem

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apple and goldman are joining forces two are planning to issue a joint credit card. t"the wall street journal" said paired with new iphone features to help users manage their money. the users would earn 2% cash back on purchases and maybe more on apple products. apple moving away from hardware and deeper into services analyst with d.a. davidson, tom, welcome. >> thanks for having me on. >> how significant for apple is the kind of allure of being able to get cash back on purchases? i know that's only floated now

but does this make sense to you, a good reason behind the partnership? >> yep, so i look at the deal of goldman sachs as potentially checking a couple of boxes for apple and for significance, i look at the recent announcement they're going to try to have consumers to return their iphones and upgrade them to the extent they're leveraging their balance sheet to do so the advantage for apple in this transaction is basically, it could be a means for the company to drive usage of apple pay and then it could also be a means for the company to drive just sales in general to the extent that essentially, you're giving them a discounted apple's product from using the credit card i do think this is a good move for apple. >> any idea what might be in it for goldman? is apple paying for this >> for goldman sachs, this is an opportunity to extend efforts into credit cards in general it's kind of a natural extension of what they're doing with marcus which is small consumer lending and opportunity, fror

example, to pay off our high interest rate credit cards with goldman sachs and the beauty for goldman sachs, it gives them a natural higher income consumer which you think about that core customer for apple i think there's definite advantages for goldman sachs as well here. >> what does it say if anything about the success or uptake of apple pay? >> actually, so when i think about apple pay, versus my initial expectations, it's a lot more ubiquitous than i initially anticipated and therefore, i'd say it's a success if you look at what you refer to before on this services side, it's part of their fast growing services revenue that hopefully over time will supplement more of the slowdown in the core product in the iphone. >> my issue with the point of service use of the phone is that, comparatively small number of places i do business have the terminals that accept it and

when i try to use those terminals, there's some misfunctiomi dysfunction. >> that can be an issue with apple pay but generally speaking, it's more ubiquitous than anticipated and anecdotally, good experiences with it both online and in physical retail stores. >> i'm almost never had a hiccup i've used it all the time. tom, thank you so much >> thank you >> tom forte with d.a. davidson. coming up, more food shares of dime brane brand international house of burgers campaign pay off remember that one? they brought food too. we had pizza let's see if we've got room for more building a better bank

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welcome back about an hour until the close. the dow and s&p hitting session lows right now the dow's down triple digits, 183 points s&p down about 18. 52-point drop for the nasdaq and two thirds of a 1% walgreens, dow dupont are the biggest drags today.

serving up strong earnings, 12% owning applebees and ihop and revenue jumped and boosting the dividends almost 10% shareholders are happy joining us first on cnbc is dine brand ceo steve joyce. thank you for being here. >> thank you for having me. >> nice metrics here ihop same store sales up 3%. double the estimate. applebees up 3.5%. shy of what some say is the estimate what you look at your numbers, quarter to quarter, what is the one you look at most closely is it same store sales total revenue? what >> combination same store sales and make sure we're getting more people in the restaurants at the same time so same store sales is the measure the industry looks at. traffic is the key - >> people. >> indicator. >> you count that? >> we watch it carefully and do different this ings to drive it. >> you can see it every day in

the office >> every day they don't want to hear from me so with the storms last night, a tougher call they headed me off with a note saying it's the weather. don't call us. >> is there weakening in the first quarter? >> no. we said that it was a really strong quarter for us. the momentum carried in to the year so, we gave guidance that clearly indicates, guidance to say same store sales be up 200 to 400 basis points which is the higher end of what anybody's putting out there. >> what are the challenges respectively you're concentrating on this year at ihop and at applebees? >> really hit a great stride of knowing what your guests are interested, we're at the best operating restaurants ever our customers are really enjoying everything we are doing. we have great innovations that are fun surprises. last year -- >> give me a hint.

>> like last year, we did ihob. >> looks like that worked. up 3%. >> a lot of that lunch and dinner it did work. but that generated $41 billion impressions. we hijacked national pizza day and we did pankiza and delivery up 24%. >> pizza flavored -- >> no. a cheeseburgerer an omelet with a cheese bugger 16-inch pies delivered through the delivery come poa innocent and deliveries up. >> applebee's was a little light relative to the street they thought closer to 4 any reason >> they were comping over really strong month from the year before but those results were great and they have moved into the year with the same momentum and we have hit the stride of we know what our customers like. they know -- we have the youngest set of customers in the restaurant business.

they're very social media aware. we're over half of the dialogue. we have fun with them. >> with the costs? minimum wage as of january 1 going up and there's been different issues of tariffs and imports. are you feeling that inflation are you passing it along or -- and tipping as well as becoming a hot button issue these days. >> her's the interesting thing about thebusiness. labor pressures are definitely there. so that's pressing margins we think our margins go up this year the product costs are less than last year. and the reason being is the tariffs. so there's a lot of protein trapped in the country prices are coming down we have done a lot of things in the restaurants to improve efficiency take, you know, take cost out of the restaurant and so, our franchisees believe the margins go up in spite of labor. we talked to the folks all the time people making more money we respect the 99% the people getting hired are our customers. the people getting raises are

our customers and as a result that improves our business. >> how much autonomy do franchisees have to innovate on menu >> they do most of the innovation and we do it together so, for example, in applebee's, the neighborhood drink promotion that was from texas. >> dollar-ita. >> it was a big hit, too. >> a lot of ideas. >> jim any fallon drank one on "the tonight show. but, you know, the franchisees are with us. they have a little bit of flexibility and people expect consistency in the menu. we change, we change together. they'll try new things and then bring it to the whole group. and so, it's really -- it is a great partnership and we have a lot of fun with it the thing about it is the customers are expecting some sort of edgy, fun things from us they buzz about what are these guys doing next and so we're really in a good spot with the consumer insight and the technology everything's pushing the right

buttons and why we are so bullish. >> somebody pass the mozzarella sticks and the buffalo chicken. >> long arms, there we go. >> i'm getting a reputation. >>he pasafr is obvious.

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we should mention markets at session lows dow's down about 177 >> quite a little slide. basically flat for much of the show but sliding downward right now. >> something else to keep an eye on, shoe pet.

>> shoe pet the cat? >> the cat of karl lagerfeld loved and stands to inherit millions. >> the trustee to take care of the cat. thank you for watching. >> "closing bell" starts right now. >> see you tomorrow. ♪ welcome to "closing bell." i'm sara eisen. >> i'm wilfred frost a very good afternoon to you shares of hormel under pressure. we'll talk to the company ceo about the numbers coming up. drop box reporting after the bell today the ceo drew houston gives us the reaction to the numbers. first up, session lows for stocks took a spill in the last few moments or so. you've got big losers like hormel on earnings and really all the groups in the s&p lower right now except for utilities energy