♪ good thursday morning. welcome to "squawk alley." back at the new york stock exchange obviously watching these markets. we'll start with the continued head winds for technology. our next guest adds that mexico tariffs could be quote devastating to the tech sector gary is the ceo of the consumer technology association gentlemen, good to see you gary, what do you mean by devastate iing? >> well, june 10th, monday 5% tariffs on products we've been urged to move from china to

mexico it's a threat. president trump has proven to counterforward on his threats, but u it would be devastating in the short-term in the long-term, we have so much business, congress threat n threatens its ability. makes no sense we understand the issue of immigration. throwing immediate tariffs is just devastate iing so many companies. the product, back and forth, mexico trading video game and tv set makers it's a big, unfortunate thing right now. >> henry, everything's a commodity with this administration and if you like market based

thinking, perhaps that's a good thing. some are concerned about taking a nontrade relating issue. >> this is a terrible idea it's unfair. abuse of power people love about president trump. he can do whatever he wants. gary just said it's terrible for the economy. costs hundreds of jobs the chance of it happening is very small over the weekend, there will be some concession or deal that's going to be great for us we will have been the brilliant thing we threaten this and look at the concessions we got. at the same time, president trump has already in the government shutdown shown that he will do bad things for this country to prove a point so there is some risk. >> gary, your ceo association

representing consumer technology companies in terms of your clients and the companies that are members of this association, are any of them talking about things like job losses or price increases, how are they planning if you see more of these tariffs go into place? >> between china and mexico, we're like the exorcist because his head is spinning mexican tariffs would be immediately harmful and would definitely affect prices and almost a border shutdown if you will an economic fence around the united states. similar to what the china government 25% the u.s. now, we lead the world in innovation and technology we're doing great, but the number one fear we have and 40% of fortune 500 companies ceos have is government regulation. government doing things which hurt us. tariffs are now at the top of the list so devastating to the global supply chain there's only one economist in the country that thinks it's a good identify that we can

identify sadly, he works for president trump in the white house the tariffs are taxes and this is beyond the regulatory authority the president has. mexico is using power and what's being talked about for china go way beyond what the law allows. the president's right. china's doing tough things, but difficult for american company, but we lead the world now in technology and innovation and we're our own worst enemy between congress and government officials trying the to shutdown with these antitrust probes as we've done before. microsoft to qualcomm to so many other companies that are crown jewel companies. these are distracting inquiries. of course we can guard those we need transparency we have the right, especially in antitrust, to know what the law is and we're getting hurt that way. with self-driving cars, so many

areas of robotics, artificial sbintelligence we need the government at our side, not against us >> well gary, for two year, they've been on your side. you got a huge tax cut, you've had deregulatory actions in place. ability to expense depreciation. what happened to that whole era? >> what happened to it i remember when -- what is this heavy handed irrational heavy handed punishment? >> does that feel schizophrenic to you we used to talk about the upside of trump not the downside >> it's the entire u.s. economy. great progress because of these. and affecting global trade this is not good for the american economy we have 5% and we're act iing as if we're the only ones there it's a very dangerous path it's a trade war

reminiscent of smooth holly in 1930 that's why congress gave out so little authority and he's expanded way beyond what congress has given him >> let's move op to a different topic. uber's on a hot streak on pace to extend its longest daily win streak to five if it can hold on to gains today and for the first time since the debut, trading above the ipo price of 45. up 25% from the may 13th low, henry. so what does this tell us about day one performance? >> day one performance of an ipo is irrelevant. peter teal has this famous question what is it everyone else thinks is right that you know is wrong. this is it in finance. that the ipo pop is some sort of indication has nothing to do with that. yes, ip ves tors who bought uber on an ipo got hurt

not good, but here we are, what two weeks later. and now oh, the disaster it's going to stay with the company for years. it's a stain the underwriters did such bad job. how could they have missed it. time and -- >> i love it when you mock i love it. >> just ridiculous we need to get past it tanked now it's up 10 amazon tanked. up 1000 x, whatever it is. just doesn't matter. need to get past that. >> if you liked it at 45 but were willing to pay 70, and you know, if that's where it opened, it was merry christmas the you great. >> if you're a big institution that says hey, uber looks good, got a nice allocation, now we can load the boat at 38, that's god. not bad. so any way, this is a persistent myth in finance. people need to get past it

>> gary, thauoughts >> uber, lyft are great companies. lyft in las vegas, 50,000 rides in a self-driving vehicle and 92% of the passengers said they felt safe. that's the future. that's where we're going also this portends well for other tech ipos. we're looking at others. potentially air bnb going out there. tech stocks are, those are the fact that we have over 200 unicorns in the u.s. more than any other country. that's, tech is one of the great stories of waelt creation in the united states. >> gary. henry. good stuff guys. energetic way to start the hour. appreciate it. >> apple services business among those in the spotlight among the doj's probe on tech. josh lipton is in san francisco with more. >> apple bulls pin a lot of hope on growing higher margin services business, but could some of those services now come into the cross hairs of the u.s. government as apple and other

tech giants face these other potential u.s. antitrust proebs. alex harmon says the doj could decide to take a harder look at spotify's complaint. remember spotify filed a complaint against apple with a european commission saying apple has an unfair advantage. acting as both player and referee. meaning competing with spotify and others in a music streaming market, but also deciding the rules that govern the app store and that harmon says is monopolistic for its part, apple flatly rejects that argument. saying it wants all businesses to thrive even if they compete for example, apple will say it distributed 200 app updates on spotify's behalf resulting in over 300 million downloads beyond the app store, he highlights another thing apple news pluswhich launched in march, bringing together

magazines, newspapers and publishers he questions whether they're using their leverage to abstract from participating publishers. apple counters its receiving great feedback, people, harper's bazaar and town and country. herb says a case against apple news plus would be tough in his opinion because content in that service is available elsewhere, too. the fact that it isn't exclusive to apple reduces legal risk for the company there, he says back to you. >> thank you and meanwhile, a big deal in tech this morning. google announcing its intent to buy business intelligence firm looker for 2.6 billi$2.6 billion this is its fourth biggest acquisition ever google had a press call on this afterward i got on the phone with google cloud ceo.

i really wanted to know from him, guys, if this is a sign of more to come i've been hearing there was some hesitation in the past within google on the board to clear big acquisitions in intersurprientee thomas was president at oracle, now coming to run google cloud would he get the running room to grow this business the way he wants? he told me look, no signal about future m and a, but clearly, the alphabet approved this and people should take this as a soon of the overall intent to grow in the enterprise he said we are doing the appropriate steps to expand as quickly as possible. he also talk ed about looker's reputation in sales and sfts enterprise saying he expects google cloud to learn from that as they continue to grow both looker and overall gookgle clould in december when they raised their round with a valuation of $1.6 billion, they said there

were around 600 people that had grown 50% in 2018 from 400 people to 600. it's a small percentage of google cloud's overall head count. but could have quite a bit of influence within there thomas, i asked him about that valuation also they went from 1.6 billion to 2.6 billion in just a few months wouldn't talk specifically about valuation, but wouldn't have done this deal if he didn't believe it would be a creative to google. they're looking to grow. his message here about enterprise they are serious about it. they've been building out the team and not just grow in technology, but enterprise capability, in sales and service. >> sounds like he's really implicitly putting both microsoft and amazon on notice that they have big plans to double down here at a time when goggle and alphabet more broadly is under this antitrust scrutiny for bigger parts of the business, it's interesting to see there's m and a happening here

>> he did get a question on antitrust on the press call. he pointed out this is a software deal. no data that is involved that is changing hands and also, he's very clearly talking about multicloud here. this isn't about goggle taking looker and make i gueiing it proprietary. he's going to continue to work on database, including oracle's. they want a large multicloud strategy, not just to be lock oed into one vendor. >> it's the biggest deal since next has nest proven to be a good deal >> i would say no. expectations around how they would perform in the home and kind of home automation home were higher. amazon with alexa and the echo has defined the space a bit more than you would expect.

>> youtube's been a good deal. >> that was a best deal. that and double click. >> very good for them. >> yeah. >> and when we return, more from my exclusive with amazon's head of the consumer business, ceo jeff wilkey, in his first broadcast interview since becoming ceo of worldwide consumer at amazon and later, another exclusive with today's big earnings mover stitch fix founder and ceo katrina lake is going to join us this hour. this hour. don't go anywhere. what's this? it's your piano. hold this for a sec. we don't have a piano. no.. but the neighbors do. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. man: stand up if you are a first generation college student.

stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.

hey! i live on my own now! southern new hampshire university i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass.

it will drive prime members to buy more it's things that people are buying a lot of. we lowered them when we first bought whole foods and recently we lowered them again. we want prime to be more val valuable when you're a who foods customer >> because that does what to overall prime? are you finding ways that activating prime within whole foods causes people to do other things that you like >> sure. this is true for videos. i mean people who watch more videos with us buy more laundry detergent. it's just when you're engaged with prime, you tend to use it more in a bunch of aspects of your life. >> and that is amazon's ceo of global consumer, jeff wilkey, head of amazon's retail business including prime and whole foods. most of the business outside of cloud. talking bt how prices at whole foods lowering those prices

drives prime member loyalty and spending we also talk b bed about the employees, specifically wages and amazon's 10,0$10,000 offer o its workerses to quit their jobs at amazon and start their own businesses delivering packages for amazon take a listen. >>. >> we're always looking at the wages that we pay and making sure they're competitive and fair we've done that for as long as we've been operating phone centers. this past time, we took a look at it and there was as you say u some, there was input from the external environment we said you know, we have a chance to do what we would normally have done for a raise or we can go big and make a statement. been terrific. really terrific. we have more people applying for jobs fewer people leaving to take other jobs it's been awesome. >> it's also interesting just a few weeks ago you put forth an

offer, forgive me if i get some details wrong. >> dsp >> yes, workers dealing with logistics inside to instead go outside. start their own business and deliver packages what dead to that and what's the early response been? have you had a bunch of people taking you up on it? >> it's $10,000 to reimburse costs. we give three months salary as a further support. we can release vans and vehicles to people who sign up for this and we ensure they have enough work so it's a viable business >> how >> just give them enough volume. we're only saying yes to enough in each area so we can give them volume it's great for us. it allows us to compliment the capacity that we have with our great carrier partners it's great for some of our employees who don't want to do the same thing they've been

doing in the warehouse for five or ten years they want to you know, learn new skills and build a business themselves kind of a theme for us we're trying to create career opportunities for the folks who work in our fulfillment centers. >> now speaking of package delivery wilke and amazon making nor news today, taking some of that human element out of the delivery equation, announcing more details on its prime air drone dri delivery system which they say will be ready within months and the detail about how they're shield iing for this safety, how it takes off like a helicopter, but flies like a plane, surprised a lot of people. >> yeah. i mean the idea it would be ready in the next few months i feel like historically, this is a company that doesn't tend to talk about plans until they're really ready to do so. didn't say where or how many also thought it was interesting this idea that people are going to be so quiet people aren't

going to hear them coming. also got the pick and pack robots that are billion rolled out. going back to the comments about wages. >> they got flamed a bit for having promised drone delivery for years. still waiting. >> true. >> they have a regulatory hurdle or two before packages start coming down from the sky delivered by flying robots but i am curious exact ly how quickly they get to roll this out. they did say that these will be able to deliver five pound packages and under, which makes up 75% to 90% of what people are ordering we won't be getting that many drone deliveries off the bat, but interesting. also interest iing to hear from jeff at all. he's been ceo of global consumer at amazon for three years. this was his first broadcast interview. >> wow >> by the way, did you see the space capsule that will take passengers to the edge of space?

>> i did see a little mars rover over there and thought of you. >> great stuff, thank you. still to come, stitch fix surging. up almost 18% right now. after surprising the street on earnings katrina lake is going to join us exclusively later this hour. aresonig 94 points stay with us

european markets set to close in a few minutes we have a bareakdown so far. >> european stocks coming out of their highs after the ecbc stopped shot after a dubbish message to the market. al though mario draghi promised to hold rates at historic lows until mid 2020 the market was hoping for a more generous tlt program, these l g longer term e refinancing options, but the market didn't really get that. you saw the banks move lower although italian banks moving to the upside on the prospect of a

rate cut by the ecb. that's come down substantially the real mover is euro zone currency up b about a half a percent at 112. its best session in a month and the germen bund bounding off a record low by about one basis point. back to you. >> all right thank you very much. to sue herera with a news update >> hello, everyone here's what's happening at this hour president trump and president macron sitting down for a bilateral meeting following the d day commemoration ceremony president trump says he doesn't have differences with macron over iran, adding both leaders have the same objective, stopping iran from o obtaini ii weapons. west point says 22 were injured and some killed when a vehicle overturned it occurred near camp natural bridge where summer training takes place. travel problems have persisted at l.a. international

airport following power outage that darken ed the facility last night causing delays and cancellations. terminal one which handles southwest flights was cleared out today after officials decided that departing passengers had to be rescreened. and what could be the first rocket to launch astronauts from cape canaveral in eight years arrived on the space coast wednesday. the atlas 5 was unu loaded from a ship at port canaveral and that launch could come as early as november. pretty exciting stuff. that's the news update this hour back to you guys carl >> thank you very much take a look at a few recent ipos uber back above the ipo price in today's trade. beyond meat, zoom, all set to report after the bell as well. jane wells is in the house with a preview on beyond. hey, jane. >> hey, carl is beyond meat beyond hype and where do y p iinhe ore?ouutn t the battle over location, location, location when "squawk alley" comes back.

sxwlnchts zblunchs within of ths to report is beyond meat man, you have carved this out like nobody's business >> when it involves food, don't get between me and a story the question really is can these fake meat companies turn a portion of regular meat eaters into occasional fake meat eaters appears that in fast food chains which carry these products, same store sales are letting these

people try it out, pay more to take the fake meat nor a test drive or bring in a friend who hey, look, come to carl's jr. with me, you can get something that isn't red meat. beyond meat shares which started at a mere $25, they've dropped below 100 today. wall street expects a loss for the first quarter of 15 cents, shrink tog 12 and so an a as sales ramps up. an ialysts are looking for repe sales and reuters has an interesting story that stores aren't always sure where they should put beyond meat in the meat aisle, which is where they'd like to be, or in the vegan section? i went to whole foods this morning. in the vegan fake stuff which was interesting because when i bought it at a store two

weeks ago california, it was in the regular meat section and one last thipg to think about reportedly about 30% of shares out there are in short position so we could see volatility after earnings come out. >> here's my question. obviously people have their reasons for getting it, but when they look at the ingredients and see gum, air bik, citrus extract, beef juice, when does the ingredient list become a liability? >> it depends on your audience ken was talking about this morning. this is not a health play. though they say all the ingredients are natural. sodium's higher. of course you buy your meat without the salt on it calories are higher, but no cholester cholesterol. this is a, maybe we'll use less land an water and not kill a cow story. this is not a healthy diet play. >> i'm one who thinks you should just put this buy the meat pretty muhao maybe with a little warning label. but everything in the store is based on what it pretends to be.

i felt when i saw anytime the meat section, you would be more likely to pick it up because if you're in the meat section, you're not going over to the vee xwan freezer section. which is why they want to be in the meat section >> the cost of making these products and then the cost to consumers and how sustainable is that >> they say it's going to come down ethan brown, the ceo, it does cost more. what did this cost me? this cost me $6. for two patties. is it two? yes, just two. you would probably pay $6-for four it's a matter of do i try it once and that drives up sale, but then i think i'm not going to pay $3 more going to wait until it comes down they promise when they get enough supply from farmers, enough plant material, the cost will be cheaper.

than meat. that's the promise >> assuming they don't become a customer like a real, recurring customer. in which case supply gets more challenged >> ethan brown told me, they are so concerned about supply, they are building up twice as they can they need for this summer, which is a question of itself. of course this stuff doesn't go bad like meat does, but if you're building up twice as much supply >> it's hot. >> yeah. >> all about the peas. >> and lenlentils. >> and the quality of pea protein. they were importing french yellow pea protein material. i wonder if they can get all the stuff they need to justify this. >> they need more american farmers to grow that stuff and peas are non gmo we grow corn, as you know >> it's okay you're not the first, you won't

be the raaslast >> it's been a long morning. i was on squawk. had to walk around midtown morgan, we grow a lot of corn and soy and not a lotlentils >> you owe me one of those patties. jane wells, thanks zoom video set to report tonight. speaking of ipos for more, let' bring in the services leader and former nyse of listing as well as ever note cofounder and seen yore adviser. gentlemen, good morning to you both david, i'll start with you you've advised companies that were looking to go public. how would you advise some of these names that are now in the pipeline today >> thank you for having me great to be with you we have about 600 folks that are working with companies looking to go public and beginning of this year, we were worry ied abu

how this would play out we're halfway there. we've had chunky deals and lot of folks are asking us how do you feel about the plans of the year for the most part we feel good about that there's been a valuation, people looking at it again to say yopg that's all bad frankly there was a point in time where we were a little worried as we saw companies come tog market. nothing was pricing below the range. now we've had about 15% of the companies priced below the range. 70 in the middle l 15 above that feels pretty good on balance, the market seems to be able to shake off concerns like brexit or china growth or interest rates, which is on

everybody's mind right now >> there's been a lot of uncertainties in terms of the macro picture. phil, the valuation shakeout we've seen with these tech names, how would you assess that >> i think what we want to see, it's a good long-term question to ask what would we society like the post ipo six months after, a year to be the answer is we kind of want it to be generally flat, maybe up anything that's one side to the other shows some deficiencies, some problems. if we're look at the general performance and valuation right now, it feels okay maybe on the too high side maybe there's a mix that feels

rational would be a little bit higher >> david, google announced, google cloud, that it's buying look er this morning. a business intelligence firm for $2.6 billion it's valuation back in december was $1.6 billion what should investors read into that given what we've been saying about valuations? >> what i read into that is a healthy market and we're going to see companies look at twos. when thinking about going public, they're going to look at the public market hard and think about what it's going to mean to be a public company to execute against your numbers that you're projecting there then the potential for joining a

larg larg larg larg larg larg larger ener prize. when you look at the portfolios over time, generally speaking, eight out of ten, are going to be sold. they're not going to go ipo. for me, it's a healthy sign of where we are in the market >> wow, that's quite a number there. phil, i'll put the same question to you how would you assess this deal today? >> yeah, i think it makes sense. i think one of the side effects of a lot of companies that do go public going public later in their stage like uber is that it does drive up the average value. so it makes an ipo a little bit less attractive for a company that's going out, thinking about an ipo, maybe at the stage where companies five years ago i think we'll see more acquisitions in the lower range. the range that used to be considered healthy if your range is now healthy, late stage, and desire has been pumped now into the closer to 10 million or above level which is fine. because really not that much of

a difference between being acquired and going public in terms of the results, returns to initial investors to founders private shareholder and so on. >> david, behind me, we have gsx, it's the latest chinese company here to go public today. in terms of some of these non u.s. companies, especially given the fact we have these tensions, around trade dynamics right now, would you expect to continue seeing some of these particularly chinese tech names coming here? to make their offerings? >> wouldn't surprise us if you saw a bit of a slowdown in the companies from china coming over here to date, we've had 17 or 18 companies, non u.s., come to our markets. roughly 22% of the flow so up from 15%, a little south of where we were last year when we were at 25%. but u healthy. it's not just from china

you've got companies from russia, from u.k., latin america. so there's balance there and geographically, but wouldn't surprise me if there's digestion that has to happen on the chinese front as we look out and maybe it will be latter second half of this year as opposed to the summer >> thanks for joining us today >> and shifting gears, the fastest grow iing segment in the $30 billion u.s. pet food market, fresh. frank holland is in new york with more on how companies like petco are going on their own health food kick frank. >> good morning. ma meals for pet made with human grade ingredients, that's become the standard of fresh dog food take a look. this is the first fresh pet food kitchen in a petco store see a lot of the same ingredi t ingredients you'd find in restaurants. here you see people make the fresh dog food from scratch right here in this kitchen now as pet parents have become

more health conscious, just food for dogs really expanded from a start up back in 2010 to now being sold in more than 100 retail locations overall, fresh pet food really booming according to nielsen, sales have grown 70% since 2015. and this is a trend that petco is really trying to capitalize on the second largest pet care chain in the country decided to stop selling food with artificial ingredients last month, reduzing revenues by $100 million a year, but they project by entering the fresh segment, it could increase customer traffic by mid single digits >> we're going to drive share growth and outpace the market so you're talking well above. you're talking 20, 30, 40% growth >> so you're seeing they're making it fresh right now. fresh pet. the only publicly traded company in the segment it reported 28% sales growth last quarter but there's a number of other competitors in this market you can see their food can be as

expensive as $8 per found. traditional dry dog food, 2.19 per pound. for now, fresh dog food, it's only 2% of the overall $30 billion u.s. pet food market, however, there's a lot of growth being projected. oppenheimer seeing it becoming a billion dollar market in just the next couple of years >> people will do anything for their pets got edison at a high today great story. when we come back, the ceo of stitch fix in an exclusive follow thg morning's massive earnings move and how about the other side of the story? tanking after announcing its ceo is retiring, pulling its 2021 guidance now down 41% dow is up 100. dow is up 100. back in a minutet first, but jj. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step

til you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade but we're also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you.

upigoditch fix is b tay katrina lake is going to join us on the other side of this break. on the other side of this break. back in a minute run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through.

puppbunny, bunny, bunny!on. alright, alright. what's going on? my owner got a new puppy. my name is tiny. nobody cares.

be go[ laughing ] gone. woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters.

a bright spot in the recent retail wreckage this morning shares of stitch fix popping in a big way. surprising the street. showing steady customer growth up 17% year over year. now with more than 3 million active clients and joining us on the phone in a cnbc exclusive is stitch fix founder and ceo, katrina lake katrina, good morning. >> good morning. thanks for having me >> great to have you so it's a quarter that surprised a lot of people, but investors don't seem to know quite how to gauge this stock i mean it's so volatile, though you have pretty much done what you said that you're going to do

since the ipo. 20% year over year revenue growth consiste consistently what do you think it is that's hard for investors to get b about stit about stitch fix >> this is a new model i think a lot of what people are used to in retail is a lot of pe used to in a retail world, online e-commerce retail world, in this world of personalization we're in, is a different type of model. i think it will take a little bit of time and education and trust-building for the broader world to understand it but we're really proud of this last quarter, and i think this last quarter demonstrates this is a model that has traction and can deliver financial results at the same time. >> one of the things you talked about on the call that drove this outperformance is your ability to find the right customer that's going to deliver long-term value. what is it about the data that you got on your best customers that has allowed to you tune

your marketing and performance in that way? >> yeah, us being able to use data to be able to identify better clients is definitely a big part of the success we've seen and revenue for clients and being able to attract clients we know we will be able to serve best to be honest, a lot of it is more in the digital world of performance marketing, being able as we're acquiring customers to identify really early in the funnel who has attributes that would be a good client so in some sense, in some kisca how much they look like other clients or in some cases we've been able to unearth and serve these millions of clients over time but i think to have a focused strategy about how do you find clients that will be operate for your service versus how do you acquire as many clients as possible is definitely the strategy we employ.

>> not looking to give away the store but what are some of the things that give you a sense of who's likely to be that kind of a client >> you really look at kind of classic women. you look at the types of attributes that drives success in our client base already as an example we see clients who are looking for premium jeans are clients that enjoy to be statistics and tend to be successful with us there's a range and huge number of attributes we define quarterly and deploy them not so much how we're masking products but to be able to use that in acquiring new clients is a strength that's been a newer strength for us. >> katina, i signed up and did style shuffle this morning and started going through the ratings and i found it very catchy, i have to say. in this discussion around data,

i'm wondering what all of this increased data does to the cost equation as well >> yeah, the zeta data is super valuable to us that style shuffle you played is an picture to launch the future. that was almost a surprise to how valuable it was. it swaz something we watched and two-strength action. not only did it help us to style for you better but it actually helps us to style in the aggregate for the broader world of clients better and to had helps us to serve a brand-new client even better when we get that data. it's something we've been super excited to make more broad and to have people like you who are early in the funnel to be able to use those ratings >> katrina, quick macro question, at 30,000 feet,

is a more than uncertain consumer good for your model and are retailers with bloated inventories going into the summer good for your model >> core management is definitely a strength of us and to be able to react quickly in a season, meet current inventory over six times a year and to operate a very large growing business with a leaner balance sheet is definitely one of the strengths of our models. in terms of consumer site, we have a broad range of lines from clients looking into the $20, $30 range up until the contemporary higher price range. we think we're qualified to serve clients for whatever they're sentiment is and whatever they're looking for, depending on kind of what price point they want and what brands they want. i think that's another feature that gives us some confidence looking into the future. >> and you're about to get another kind of test with these

china tariffs. you talked a little bit on that on the call with the data you got and your understanding of the customer is going to help you manage that better can you talk about to what extent you've been able to move your own manufacturing out of china in preparation for that and the sorts of moves you can make to mitigate the cost increase >> yes, so, we do have a number of levers. we have private label exclusive brands within our mix, and for that product, and in some cases we're looking directly to facts, in some cases working with vendors. and over the -- in the short term, it's harder to move some of those country of origin decisions but in the longer term, those are definitely, that's an instrument that we have we also could work with our vendors to be able to share some of the costs at that point the last point which i think you're mentioning here is paul talked about how we can kind of surgically be able to identify

places where some of the price increases might be able to be shared with our clients. that's one place being able to run experiments is a good advantage of our model we have kind of a multitude of ways we can potentially deal with the tariffs -- if these tariffs come to be there's a lot of uncertainty on this topic and i feel great our team has thoroughly understood what the risks are and come up with contingency plans depending on what the outcome is of the tariffs. >> and that stock is up more than 18% after the earnings raised guidance. katrina lake, thank you so much for being with us. >> thanks for having me. a bunch of air pockets in markets. we were up 100, now up 50 as we're getting headline after headline regarding trade from e ithoanthwhe use d congress we're back in less than three help make banking easier,

like... a business borrowing solution to help get a little more space with a lot less mom. or home insight, to search for a new house within your budget. because, they really need their space. pnc - make today the day.

but we're also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you. be aware of tid bombs as we go into the white house session. we had white house aides saying we're heading on the path of mexico tariffs, due to take place monday just a moment ago head of house, ways and means say they will introduce a resolution of disapproval if this happens

monday a lot is coming down the pike monday and jobs number tomorrow. >> i was going to say jobs tomorrow and beyond meat, zoom, docusign after the bell tonight. >> and morgan stanley throws in the towel on amd that stock is up. >> we were wrong, and they were. let's get to the judge "the halftime report. thank you. stocks off to their best june start in 20 years. can this newfound momentum continue with several critical events looming it's 12:00 noon. this is "the halftime report." four days for tariffs possibly going into effect on the mexican border 12 days to a bad decision. if the market is moving now, which side of the train do you need to be on? the halftime investment committee is ready to weigh in "the halftime report" begins