For all of the dows implied decline, macys is no good either. Well get to all of that. Europe in the red this morning. Asia quiet overnight. And watch oil up four of five sessions following the best day in about two weeks. Our roadmap begins with four names down big this morning. Shares of macys falling hard after the companys Earnings Report this morning slashing guidance. Terry lundgren saying on the call we are not counting on the consumer to spend more ncht office depot and staples calling off merger after a judge blocked the deal. Both stocks taking a hit this morning. And disney shares falling after missing estimates for the first time in five years. A drop in espn ad sales and subscribers taking a toll on that quarter. Ncht first up, macys down in the premarket after the company missed on quarterly revenue and slashes their full year guidance. Retailers says Top Line Sales expected to remain below initial expectations. Macys Early ReleaseTerry Lundgren saying we are seeing continued weakness in Consumer Spending levels, headwinds also coming from a consecutive second year of double digit spending reductions by International Visitors in major tourist markets. Comps down 6. This is five straight quarters, guys, where sales are down. Well, you know, the unfortunate location of being in the mall. I can just sit here and say this over and over again, but people just dont go to the mall like they did. And this is happening. Whats throwing people off and theres a lot of industries where this is happening. Cloud adoption in tech destroyed a lot of tech earnings this quarter. This millenial version to the mall which by the way is talked about in a Conference Call that not solarcity because that was in the fossil Conference Call. It just went away. This kind of behavior just happened overnight. I feel for these guys. You couldnt game how quickly this business went away. No. What happened to the omni channel discussion we used to have . We changed the channel. We did have an analyst yesterday in the 10 say we used to talk about omni channel but know mobile is just a cannibalizer. I used to go there was a period you went to the mall and looked at the price on your hand held. You now dont even go to the mall. Look, Terry Lundgren is a great merchant. Is he the greatest in the world . Arguably Mickey Drexler is in the mall. Its where they are. Its the showcase. Its the way people shop has changed radically. Its radically. And now i know that apple is completely out of favor. Bernstein comes out today with a note, adoption not happening. But people shop in their cell phone. Thats what and weve been talking about it for a while, my friend. David berman introduced the idea a couple years ago and its only picked up speed. And in fact when you look at the Fourth Quarter numbers more than 50 of the sales growth and retail in the United States was amazon. Now, theres not a lot of growth to be had, but any that is had more than 50 is going to amazon. That shows you. That said were talking about macys has 870 stores in 45 states, gentlemen. How many do they need . How many stores does sears need . How many . Its not fair to macys to lump macys and sears in the same sentence. Thats really cold. Okay. Hows gimbles doing . Montgomery ward dont knock that. They said they cut them perfectly. Jim, again first of all First Quarter is not particularly good quarter for retail. Down 5 , 6 is pretty ugly. I just think when you see comp sales down that says we cant get ahead of it. I bought a pair of rob ports at amazon and immediately macys said i could have gotten them cheaper on omni channel. And thats true. Its just that ive got that amazon prime. And amazon prime is something i like to use every day because i feel like im beating someone. Like my parents used to be in another generation like you bought retail . Now its like did you buy prime or not . And nobody seems to buy apparel. In fact, i think its all accessories. Apparel is just not purchased. You may question that at that Conference Call. Key thing number two on the plan for nearterm improvement is going to be excite customers with greater newness. Newness. And more exclusive merchandise. That actually is a quote from the press release. Greater newness. Wait until comes out 3d mall, you go into stores and you try things on. Its insane whats coming. I mean, i dont think these guys realize whats coming. Retail is not god given. You can i can show you boxes of receipts of retailers that my father had as customers in the 80s and 90s, and not one was in business. And that was just because of walmart. Now what is walmart . We havent even heard from walmart. I dont know. Nobodys even going to walk an aisle again, all going to be on the ship and lose ability to walk and wobble around. Ship of fools, unbelievable. Amazon at an alltime high again today. Bezos wealth up 18 billion over the past few weeks. What hes worth, we focus on that. Its what hes created. Hes created a remarkable thing. Do you have the button which says youre out of time . Do you have the button . I dont have that button. My wife says thats the most important innovation since like tesla. Meanwhile, disneys down on the premarket after missing with Quarterly Results last night despite strength that the movie studios cable revenue declined by decrease in ad and subs at espn. Bob iger did address that issue on last nights Conference Call. Were also in discussion with a number of entities, current distributors coming forward with new packages and some completely new distributors all have expressed an avid interest in having espn and our other channels included in their initial offerings. And were very, very encouraged by the discussions last negotiations that were having. Now, you shift the timing of some bowl games ad revenue at espn actually up three. No color on succession. Im taking the other side of this negativity. Listen to me, get to the end of the Conference Call, which most people didnt. Did you . I did. Bob iger last words were goodbye. No, its thank you, ladies and gentlemen, this concludes the Conference Call. Bob iger saying i wanted to have one thing, im actually kind of surprised that after 45 minutes of questioning we didnt get one question about our studio. Thats insane. Theyve got five years worth of production coming. I think that this is im not going to say anythings a buy because if something is down five this market cant handle that volume and usually means stocks down again because thats what happens in terms of the way the market has so little volume. All these big institutions cant sell in one day, they have to in two days. But this quarter we have to judge this from the point of view of when a bowl game came as opposed to captain america. I had hasbro on last night on mad money. Yes. I mean, were now to the crazy point where in order to be able to play disney we buy ea for star wars game, and we buy hasbro for Disney Princess and captain america. This is wrong. Okay. I will come back at you then. Lets not even consider the overarching fear of the unbundle and the skinny bundle, the things you just heard mr. Iger talk about. Talk about ad sales up 3 , Sports Center, is it still getting it done . Are young people watching that . Because when ive talked to guys buying or selling the stock this morning, thats what theyre coming down to is advertising growth, jim. Not even the worry about the unbundled world and whether or not espn will be on all the bundles or skinny bundles or not. But this ad growth number is worrying people. And at 575, lets go with a 575 number youre talking over 15 times, why is that not a relatively expensive multiple . For any top line grower. Okay. There are i actually can tell you i feel differently. I think that this is an 11 grower, honestly. Were talking about 4 revenue growth, 2 net Income Growth and 6 dluted eps quarter. 11 i dont know how this is considered bad. Five years in a row of meeting or beating street estimates to me is pretty terrific. Now you can say, jim, you made the same map on apple. Well, apples not going away. Disneys not going away. I am saying disney will be a franchise long after many of course it will. But davids point is not going away. Shortterm i got problem. Not going away and being leadership are two different things. Okay. That is fair. Nobodys arguing this is an incredible company. And the theme parks and the studio. But to the extent that people are buying and paying up a multiple based on expected growth, the question of unbundling and what thats going to mean to espn subs and ad growth are key questions. They are. Im not denying that would be foolish for me to deny that. Foolish. Im just wondering whether that same narrative is going to be with us two years from now. Were still going to be seeing captain america, the intergalactic civil war. Were still going to be seeing frozen 7, okay, i mean, we will. And well still be playing their games. Yes, they did do a video game console. That to me was not great. I am thinking over and over again of the fact that my kids went to see star wars three times. And i saw star wars three times. And i dont know Many Companies that have that kind of pull. How many times did you go see captain america . Half of that income comes from media networks, so you get some cord cutting, some cord shaving and that will offset the acceleration of things like theme parks, things like studios. I think you got to is it right to be thinking a little further along . Right now, yes, i can understand. Thats why i said selling today, selling tomorrow because of ad revenue. If theyd done time warners ad revenue if theyd done cbss top line growth 10 dont you think they can change out the personnel. Maybe theyd be able to. Is Sports Center getting to be an older franchise . Its not being watched by a young audience anymore. By the way walk around the office and ask anybody you see under 30 years old whether they have cable television. You know what the answers going to be. Well, they have comcast. They have broadband. You have to have wifi. But they do not have the bundle. Again, i think that there are issues with espn. I watch a lot of it on my handheld and i dont get watch espn, and perhaps i should. But i get my scores because im laser focused. And the fact is that the espn on your cell phone is so its a cannibalization its so fabulous. Its fabulous. But i just find that when i still put on espn yes, i still watch espn. Am i too old . Im not the demographic you want. No. Youre out of the demo. If you dont watch espn sports, for football, if football season were longer, we would be having a different conversation. I dont think it can be any longer. I dont think the players want to add. They need their bodies to rest. Thats hard enough as it is. The draft. Did you see the draft coverage on espn . Yes. It was incredible. Shortterm i understand but i cant grade this company shortterm anymore. It doesnt work. There were quarters i wanted to grade amazon shortterm, it was a mistake. It makes sense. A quarter facebook lost its way because of mobile, there were quarters i felt google including the last one may have lost its way. This is allowed. What i am saying its allowed. Thats what im saying. This is not nordstrom, this is not macys, this is not pen penneys. So disneys not going away. Thats the point. Thank you. I got another 15 i can mention. When we come back talk about things going away, staples and office depot scrapping this plan to merger. Both stocks getting slammed. Were going to talk to former office depot steve odland. S p going for four in a row for the First Time Since mid march as well. Were back after a break. So what else is new . Hows your mother . Umm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. At ally bank, no branches equals great rates. Its a fact. Kind of like vacations equal getting carried away. More proactive selling. What do you think michal . I agree. Lets get out there. Lets meet these people. Staples and office depot tumbling in the premarket. The Office Supply retailers deciding to abandon their planned 6. 3 billion merger after a federal judge blocks the deal on antitrust grounds siding with the ftc. Staples and office depot hoped to combine after years of syncing revenues. Well get reaction from former office depot ceo steve odland later in this show. A reasonable possibility the deal would substantially impair competition, especially on big customers. Look, this kind of ruling, the governments getting involved, this is not like they let the airlines merge and all our rates go up. Okay. They block these guys, i mean, i dont know if office depot can, you know, how does it stay in business . Thats a question here. The key was the b to b business the idea there was not enough in terms of corporations buying their Office Supplies. And the judge agreed with the government here. Which was something of a surprise given he had been tough on the government in particular because of this coaching that the government had tried to do with an amazon executive in his deposition sort of trying to make it seem like amazon had no interest in entering this market when in fact they do. We spend a lot of time talking about amazon in our first segment of course about macys. Well, if and when they turn the switch on here decide to deliver Office Supplies to corporate america. Dont you think theyre going to be fairly quickly in the drivers seat . Most likely they will be. What i was thinking was friend of the court by dunder miff lin, honestly. Not to mention yes, im aware from the office. They committed to keeping prices for three years, i think, froze. A strange outcome in some ways. We havent gotten a full decision. You need a counter. This is another one where the technology caught up with the arguments. Technology is moving too quickly for the judiciary. I mean, do they want a company antitrust regulators you might say as well. Look at some of the deals blocked in particular in the past in technology and then its what were they thinking. I struggle here because i think that everybody wheres the real world . I mean, we know where we get our Office Supplies. They pulled back and pulled back and tried to get staples has done its absolute best to try to close and still cant. Office depot, this was a merger that had to happen in order to save. This was not two drunken sailors. Both Companies Still produce a decent amount of cash flow. Theres an idea of given their profile if the stocks come down enough private equity might be interested. Really . Well see if theres a floor here. Geez, i dont know. Again, i keep coming back to this rapid adoption that no one was thinking about. And a lot of it is this amazon berman, this amazon quarter was a quarter was a Tipping Point quarter where you just realized that this is where a whole generation of people would never go to office depot. Its funny we just talked to jamie dimon in the last hour and one of his points was bond market looks open, theres a lot of m a chatter. He didnt go into the sense of hesitancy like wifi at city hall on some of these big ones. Yeah. And when youre seeing more strategic deals particularly of this type, it becomes more of an issue. And this year listen between baker hughes and this deal falling. Its the most theyve done since and then firing regulation, not an antitrust right at the heart of allergan pfizer, the government the governments the most active its been in blocking deals in Something Like 40 years. The street did a big survey. 40 years. And a lot of these companies are not do you think office depot is trading at 3 because its about to go to 5 . Stocks dont trade at 3 because theyre about to go to 5. You know where theyre about to go. Three, two, one, ignition, failure to launch. They are going to restructure some operations, cost efficiencies, return some capital. Okay. Tough story. When we come back cramers mad dash, count down to the opening bell, take at look at the premarket. More squawk on the street from the nyse straight ahead. Nothing unleashes power. Quite like the human foot. Introducing the 255 horsepower lexus is 300 allwheeldrive. With twentyfive percent more base horsepower. Once driven, theres no going back. So mad dash for a wednesday. Imagine that, time goes by so fast. Live every day to the fullest, jim. What do we got . See this, david . Says 9. 23. Yes, it does. On fossils Conference Call last night, which was a horror show, the ceo watches by the way. Pardon me . They make watches. The ceo says we sell 30 million watches today, all they do primarily is tell time. Thats now a liability when you wear one of these, david. This doesnt just tell time, it tells me when my wife is bother calling me. This is really important. The ceo says largely millennial have not worn watches because they grew up with smartphones. David, milleninial is a whole bg part of the population, and theyre taking over the earth. And they dont spend. They get their clock through here. They dont do any of the things we do. We have discussed this in every single thing weve done today so far, whether it was macys and the rise of amazon because people are buying on this, whether it was disney and the fact millennial dont actually have cable coming into the home. And now on fossil as well. David, what can i say . We are disappointed that these headwinds have intensified. By the way, a lot of the talk is nordstrom has drastically reduced the number of watches. David, i dont know. The big themes sometimes, jim. The big theme of the rise of mobile devices and peoples willingness to do all sorts of things on them impact so many things. Its happened too fast and yet Everyone Wants to sell this stock. Why do they want to sell apple . They want to sell everything, david,