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Quest Means Business
NASDAQ Soares On Strong Tech Earnings; Italian Car Maker Beat Expectations, Optimistic For 2023; BOE, ECB Raise Interest Rates 50 Basis Points; Kramatorsk Under Fire For Second Straight Day; Beauty Stock ELF Soars; Call To Earth; AI To Disrupt 85 Million Jobs By 2025; Airline Group Calls Biden Proposals "Short-Sighted". Aired 3-4p ET
Aired February 02, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, CNN INTERNATIONAL HOST: Now, the Dow has been lower all day than the other US averages well in the green. We have a look at the
markets. There you see the Dow being dragged not just by Boeing, but also by health stocks. The S&P 500 and the NASDAQ up this moment being buoyed of
course by Meta, and by some of the tech shares.
Those are the markets. These are the main events for you.
Shares in Facebook owner Meta soar after Zuckerberg promises a focus on efficiency.
We are not out of the woods yet. Europe's Central Bankers say the inflation fight is far from over.
And record sales for Ferrari. The luxury carmaker CEO joins me live.
Live from London, it is Wednesday, February 2nd. I'm Isa Soares, in for Richard Quest and I too, mean business.
Good evening, everyone.
Tonight, strong tech earnings are fueling a market rally. The S&P 500 is up about one percent, almost one percent and the NASDAQ is also doing very
well, up almost two-and-two-tenths of a percent and it comes on the back of yesterday's Fed meeting where Chair Jerome Powell said inflation is on its
Well, today's moves are largely driven by Facebook owner, Meta, though. Shares are up around 22 -- almost 23 percent on track for what could be its
strongest day -- get this -- in 10 years despite announcing lower profit and revenue.
The company also announced a massive stock buyback and CEO Mark Zuckerberg said the company will focus on efficiency.
Clare Duffy is in New York.
So what does that mean, Clare? Focusing on efficiency? Because there was no talk about Metaverse. It was really a return to core business, right? So
tell me what he means by efficiency here.
CLARE DUFFY, CNN BUSINESS WRITER: It was a big shift in tone last night from Mark Zuckerberg and from Meta. The company is so known for talking
about these ambitious investments that it wants to make, but instead, last night, Mark Zuckerberg said this is going to be the year of efficiency.
He really sort of acknowledged that the company's core business is both maturing and going through a really challenging time right now. Advertisers
are pulling back their spending because of all the economic uncertainty. And so you hear Meta talking about this plans to cut costs.
The company in November announced plans to lay off 11,000 employees, and it said that in the upcoming year, it is planning to cut capital expenditures.
It has a hiring freeze in place right now. It is pulling back on some of its real estate footprint.
And so it seems like the company really is sort of changing its tone here and it wanted to reassure investors, and clearly it worked. Look at --
almost up 23 or shares are up almost 23 percent today.
SOARES: Yes, it clearly worked, and it does show that Zuckerberg was listening to what investors had said before, who had I think, it is fair to
say, somewhat of a tepid response there to his Metaverse ambitions.
Did we hear anything though, Clare, from Zuckerberg regarding Metaverse and what his plans are here.
DUFFY: I mean, Zuckerberg still is talking a little bit about the metaverse. It is clear that -- I mean, they renamed the company. They're
kind of committed to this vision. He talked a little bit about mobile avatars. But it seems like he does want to reassure investors that that's
not going to be a distraction from the business that is still making her money right now.
SOARES: Yes, and look, it is fascinating, because only last year, I remember very clearly you and I had this conversation, the criticism that
Meta was facing for months on end, right, that Facebook was becoming somewhat stagnant.
Yes, I was looking at the numbers from them and they had what -- two billion daily active users. What does that tell you about the business
DUFFY: It's a huge milestone for Facebook, and as you said, there had been some concerns about sort of stagnant user growth. The fact that young
people much prefer TikTok to Facebook, but the company has made some changes to Facebook in the last year, in a lot of ways, making it more like
Instagram. It introduced Reels to Facebook, a lot more recommended content.
And it is clear that, you know, Facebook still has some utility and maybe those changes were working.
SOARES: Well, they've had almost three billion people use the company's apps each day, that's a five percent increase on this time last year.
Clearly, it is working.
Clare Duffy, appreciate it. Thanks very much.
DUFFY: Thank you.
SOARES: Now in the latest signs the wealthy is still spending, we've had record sales from Rolls Royce and LVMH this month. Now, its Ferrari's turn.
Shares in the luxury Italian carmaker jumped more than five percent today after posting a 13 percent rise in profits for 2022. It also shipped a
record number of its high-end sports cars, more than 13,000 of them and it is confident this year will be even better.
Benedetto Vigna is the CEO of Ferrari, and he joins me now from the company's headquarters in Maranello, Italy.
Mr. Benedetto, thank you very much for taking the time to speak to us here on QUEST MEANS BUSINESS and what a roaring start the year Ferrari has had.
Talk to us about what we have seen and what cars in particular have shone.
BENEDETTO VIGNA, CEO, FERRARI: It was a fantastic start, I would say, because the team did a really great job during the past year, and it is
because of them, because of the partner, because of the client, that we have been able to reach a record across all the metrics.
I mean, we passed the five billion threshold. Our sales were around 5.1 billion euro. We had a net profit around the 940 million euro, and then the
free cash flow generation was around the 760 million euro. So, it was really a good start for the year we have in front of us.
SOARES: And of course, like we said, you've shipped a record number of high-end sports cars, 13,000 of them and we are seeing this, of course, at
a time of rising interest rates, soaring inflation, and clearly from what I can see from your earnings, that economic conditions, the cost of living
crisis is not affecting your wealthy customers.
VIGNA: Look, we are addressing, as you say wealthy customers. We don't see any sign -- any negative sign in our order book. It is very strong. It
goes well deep in 2024. And clearly, I mean, the situation, we live in a world where we have to pay attention to what is happening around.
What I believe is an important point here in Ferrari is the agility of the team to manage a different situation, very high confidence for these years
and a lot of energy, a lot of enthusiasm, a lot of confidence in what we are going to do this year.
SOARES: But correct me if I'm wrong, Mr. Benedetto, but you've also -- Ferrari has also pushed up prices to offset the impact of inflation. Talk
to us about that, and any headwinds that you have faced.
VIGNA: You remember pretty well, we start to see these starting end of Q3. We've been -- we increased the price, mid-single digit to offset a
little bit of the energy and the cost -- in the raw material cost.
We see a kind of easing recently, but you know, we are in the luxury space and we have to pay attention always to look at the exclusivity on what we
sell, and the way we manage carefully the pricing.
So it was a good was a good start though, in terms of pricing for this year.
SOARES: And I was looking at, you know, your earnings from my team who provided me with information, and I saw a 74 -- I think 74 percent increase
in China, Hong Kong, and the Taiwan region. How much have you benefited here from the reopening of China post COVID lockdowns, Mr. Benedetto?
VIGNA: For sure, it helped a little bit. But I have to say that this increase of shipment to China was also planned to make sure that our client
in China could enjoy more the Ferrari after the lockdown.
So we had an increase in the share in China that was, let's say, shifting down a little bit Europe, but it was a good point to take care of all the
region of the world.
SOARES: And clearly, it is a luxury product, as you've said. You've just had strong earnings, demand is incredibly strong. When you have a product
that is so loved and so admired, does that put greater pressure on yourself, Mr. Benedetto to try and come up with genius and more creative
products every time. Talk to us about that.
VIGNA: For sure, I mean, the pressure that all the team has is not small, but I think this is the beauty of our job because at the end of the
story, you know, when you work in a company such as Ferrari, on one side, you have the privilege to work in such a beautiful company. On the other
side, you also have a responsibility to keep doing always something that the client like more and more in a way that they can leave the emotion, the
So a lot of pleasure, but also, I think all the team is having a lot of fun and this is very important if you want to be to offer something that is
unique to the to the client, to the market.
SOARES: Benedetto Vigna, the CEO of Ferrari, always wonderful to have you on the show. Thank you very much, sir.
VIGNA: Thank you.
SOARES: And coming up right here on the show, the Bank of England and European Central Banks raise rates moving more quickly than the US Fed.
We'll talk about why in just a moment.
SOARES: Two of Europe's biggest Central Banks raise interest rates today. The Bank of England and the European Central Bank both increased rates by
50 basis points as you can see there, and both indicated that more rate hikes could be ahead.
ECB President, Christine Lagarde said that despite falling inflation, underlying trends are still cause for concern. Have a listen.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: This is the highest in all time that core inflation has been in our part of the world. So I get
it, headline inflation has gone down, and more so than we had expected and that many had expected, but underlying inflation pressure is there.
(END VIDEO CLIP)
SOARES: Let's get more of this. Anna Stewart is here with me now and we will talk about the European Central Bank in just a moment.
Let's start with the BoE, 50 basis points as we said, pretty much in line with expectations. But the tone from Andrew Bailey was somewhat different
from what we were expecting. It took many by surprise.
ANNA STEWART, CNN REPORTER: It was and it's been interesting, the last two weeks of course, we have had so many data points suggesting the UK is
heading for recession, and the Bank of England, of course agrees with that.
But today, they did say that the recession will be shallower than initially expected, so 50 basis points, taking the main rate to four percent, and
now, the market is pricing in that it will peak around four and a half percent in June.
That is coming down from over five percent just a few months ago. So in terms of the rate cycle, it feels like the Bank of England is certainly
nearing the end of that, and the economy is slowing and they are very concerned about inflation, which is still over 10 percent.
The line from the Bank of England was interesting when they said, events may not unfold in the way that they hope with inflation coming down
sharply. It's above 10 percent. It's uncharted territory.
It's all to do with energy prices, if they don't fall fast enough, that could keep going, and that's the risk for the BoE. They need to keep the
economy going so they can't keep raising rates as they were for very long, but at the same time, they have to get inflation under control.
SOARES: So compare with that what we heard from Bailey to what we heard to what you and I were discussing was it -- this week, last week, I can't
remember -- from the IMF, that almost painted a picture of UK economy flatlining. So the very two almost different images here would you say?
STEWART: Absolutely. I mean, the UK is heading for a recession, there is no doubt about that at all, and the Eurozone will grow, but not by very much.
I mean, the IMF's prediction is 0.7 percent this year for the Eurozone, and the challenge for the ECB is managing multiple economies all growing at
slightly different speeds and inflation is still a problem there.
So while it is over 10 percent in the UK, it's over eight percent in the Eurozone. So it's still pretty high, and as you heard from Lagarde there,
headline inflation is coming down, but the risk is core inflation is still really sticky and that is a major concern, I think, for the ECB.
So, 50 basis points this time. But look, I'll be very clear that they will raise rates significantly at a steady pace and at levels that are
sufficiently restrictive, and that starts with another 50 basis points in March.
So no crystal balls needed for the next meeting.
SOARES: And clearly, not taking her foot off the gas, at least from what we heard from Lagarde.
STEWART: And that follows on from the Federal Reserve where you saw that pace slow and you actually had Jay Powell saying, you know, don't get used
to this, many more rate rises probably to come. But Lagarde really underscored that today.
SOARES: Yes, we are doing well, but we're not there yet very much is what they said.
Anna, great. Thanks very much.
Well, today's rate rises in Europe were larger than the Fed's 25 basis points move yesterday. We got you that on the show yesterday. All three are
expected to slow the pace of tightening in the coming months, but they all emphasize the job as I was saying to Anna, as we were discussing is not yet
Bank of England Governor Andrew Bailey explained that although inflation has come down, the risk remains high. Have a listen.
(BEGIN VIDEO CLIP)
ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: With inflation currently above 10 percent, we are in uncharted territory. Energy prices may not fall by as
much as currently expected in financial markets, and even if they do, this period of very high inflation could play into price and wage setting in the
UK economy to a greater extent than we assumed in our central projection.
The tightness of the labor market reinforces this risk. For this reason, we think the risks around our central projection for inflation shown in this
chart are skewed significantly to the upside, and more so than at any time in the history of the Monetary Policy Committee.
(END VIDEO CLIP)
SOARES: Jumana Saleheen is the Chief Economist at Vanguard Europe. She used to serve as the head of the Division for Financial Stability at the Bank of
England, and she joins me now.
Jumana, great to have you here on the show.
Let's talk about what we've seen the last kind of two days -- last day, 24 hours or so. It is three Central Banks having very different strategies,
approaches to how to deal with the rising inflation, but it does seem to be that as we heard from managers before you that the medicine seems to be
working, is that fair?
JUMANA SALEHEEN, CHIEF ECONOMIST, VANGUARD EUROPE: Yes, I mean, inflation is coming down and I think that's partly because of the energy prices.
Energy prices have fallen rapidly due to the better weather, and that has been good news. It's meant that the inflation, the energy component of
inflation has come down quicker than we had expected.
So is the medicine working? In terms of the energy price effect, that was going to happen anyway. It is probably too early to tell how well the
medicine is working because we know that monetary policy operates with long and variable lags.
SOARES: Yes. And so when you look at the policies that we've seen from -- we heard from Lagarde. She had been very clear setting out a story, we are
expecting the next meeting, compared to the BoE, we heard from Bailey. What concerns you? What questions do you have?
SALEHEEN: I think what concerns me is, I guess that what's happening in markets. The markets interpreted all three Central Banks as a bit more
dovish than maybe they wanted it to sound. So we saw equity markets rally, we saw bond yields coming down. We've seen expectations in markets of rate
cuts priced in now for the Bank of England.
So I think that is the thing that slightly worries me is that the message they are trying to give is, you know, yes, rates are still rising. We're
going to hold it in restrictive territory, the risks are still very much alive and kicking. And so let's not declare victory. That's the word that
Powell used yesterday, too quickly.
SOARES: That's very much what we saw actually, when the news came in yesterday. There seems to be a disconnect, we saw the market and what he
said, we were actually live on the show, and we looked at the markets. There seemed to be a disconnect between what he is saying being somewhat,
you know, I seem to think he's bearish over rates, but actually market is interpreting and being somewhat dovish here.
SALEHEEN: Yes, that's right. And you know, the way that I describe it, it's almost like a cat and mouse game, and basically what's happening is every
single meeting since Jackson Hole last August, Powell has been literally giving the same message.
But as time has passed, markets are now wanting that inflation to come down. They have more optimistic views on inflation and that's the reason
why they're reacting in this way.
So you've got a disconnect almost in expectations of the future.
SOARES: But it does, I mean, what we heard from Powell yesterday, he said inflation is coming down. And it does seems like we're turning a corner,
but we're not out of the woods yet. So where do you expect the next rate? Or are we looking at a quarter again? How do you see it?
SALEHEEN: Yes, I mean, in terms of the rate hikes, as you said, already, like last year, we saw three hundred, four hundred basis points from all
the Central Banks, the three major ones that we're talking about, you know, a thousand basis points of rate hikes, that has to work its way through the
So there is more to come, so rates are near their peak, if you like, but they're -- you know, we still think there's room to go. Obviously, Lagarde
gave a very clear signal, you know, another 50, we'll probably do more, but they're a little bit behind the curve if you think about it.
They started raising rates later and their level is lower if you compare it to the four percent.
SOARES: Explains the language read that we heard from Lagarde.
SALEHEEN: Exactly, exactly.
So we're at two-and-a-half in the Eurozone, whereas we're talking about four to five in the US at the moment.
SOARES: And why don't you just show for our viewers around the world is that, you know, I remember what -- November-December last year, we were
predicting such a dire picture, economic picture, but what we've seen from these three Central Banks, it's actually not as bad.
The economic picture is not as dire as we thought it was back then.
SOARES: Or is it? You tell me, you're the expert.
SALEHEEN: I think the main point that I'd like to stress is that, you know, the data -- month-on-month data contains noise.
SALEHEEN: So you get one month great data, everybody is really optimistic, then you have a next day -- the job of Central Banks and of economists is
to look through that month-to-month volatility, and think about where the trend is going, and that's really why the optimism at the moment is because
the economy has been resilient, the weather has been good, gas prices are low, and that generates an optimism amongst consumers, amongst producers.
SOARES: I mean, it'll drop, but I have to ask you. Job numbers, what are we expecting tomorrow? What's your prediction?
SALEHEEN: I think we're expecting it to be pretty stable about two hundred, two hundred fifty thousand.
SOARES: Jumana Saleheen, thank you very much. Lovely to meet you.
SALEHEEN: Thank you.
SOARES: Well, Adani shares continue to fall in the wake of a US short sellers' fraud allegations. More than $100 billion has been wiped off the
value of the Indian conglomerate's various listed companies in a week.
On Wednesday, Gautam Adani, one of the world's richest men called off a $2.5 billion share offering for his flagship company after the stock
dropped nearly 30 percent, and there are now fears about the potential systemic impact of the Hindenburg Report.
Vedika Sud reports now from New Delhi.
UNIDENTIFIED FEMALE: Sustainable cities for tomorrow.
VEDIKA SUD, CNN REPORTER (voice over): Protests by opposition lawmakers in India's Parliament on Wednesday highlighting concerns of the finances of an
On the same day, his conglomerate, Adani Enterprises called off its $2.5 billion share sale after a significant drop in share price.
GAUTAM ADANI, CHAIRPERSON, ADANI GROUP: For me, the interest of my investor is paramount and everything is secondary.
SUD (voice over): Even a statement from the low-profile businessman, Gautam Adani wasn't enough to calm India's stock market.
It all started after a US research firm and short seller accused his business of fraud and stock manipulation. The Adani Group has denounced the
allegations as baseless and malicious. It called the report a calculated attack on India, the independence, integrity, and quality of Indian
institutions, and the growth story and ambition of India.
The Adani Group founded about 30 years ago controls power stations, ports, and airports with huge stakes in the energy and logistics sector, has long
been linked to the wider success of India.
TIM BUCKLEY, DIRECTOR, CLIMATE ENERGY FINANCE: The Indian economy has been growing as one of the fastest growing emerging markets in the world for a
decade now, and that profound success story in India has certainly been a cornerstone of the Adani Group because they are investing in infrastructure
SUD (voice over): At the start of the pandemic, Adani's net worth was estimated to be around $13 billion. To the "Forbes" estimates it is around
$75 billion. This dizzying growth has often been flagged by detractors.
Adani is seen as a close ally of Indian Prime Minister Narendra Modi. Critics say Adani's rise rested heavily on crony capitalism, which Adani
has repeatedly dismissed.
ADANI: See, Prime Minister Modi and myself, both are coming from State of Gujarat and that makes me the easy target over such business
SUD (voice over): Analysts caution that the fallout of the report by Hindenburg Research not only poses a risk to the Adani Group, but to the
HEMINDRA HAZARI, INDEPENDENT BANKING AND ECONOMIC ANALYST: In a normal case of events, the regulator would have stepped in and announced an
investigation. But sadly in this case, the regulator at least for the public has chosen to remain silent.
SUD (voice over): The immediate impact has been obvious. More than $100 billion wiped off the value of his business empire. The wider challenge now
for India's market regulator and the Modi government will be to try and cap the market chaos and regain the trust of nervous investors.
Vedika Sud, CNN, New Delhi.
SOARES: Beauty lovers are making up for lost time, literally. The cosmetics and skincare company ELF saw blockbuster third quarter. The CEO joins me,
SOARES: Hello, I'm Isa Soares. There is more QUEST MEANS BUSINESS in a moment when President Biden says he will crack down on airlines who charge
parents extra to sit next to their kids.
And I'll be speaking to the CEO of a cosmetics giant about the so-called Lipstick Index.
Before that the headlines for you this hour.
The FBI is expected to search the home and office of former US Vice President Pence. Sources tell CNN, the agency will focus on his home in
Indiana and his office in Washington, DC.
Last month, if you remember, Pence's attorney said classified documents were found during a voluntary check. Similar files have been discovered at
the homes of former President Donald Trump and current President Joe Biden.
An Iranian couple has been sentenced to prison after they posted a video of themselves dancing in the streets of Tehran. As you can see there, the
woman is not wearing a head scarf.
The two social media influencers were charged with spreading corruption and intent to disrupt national security.
Ukrainian military officials say Russian forces are actively preparing for a major new offensive within 2-3 months. The comments come after the
country's defense minister warned Russia may mark the anniversary of its invasion at the end of the month by mobilizing hundreds of thousands of
(END VIDEO CLIP)
SOARES: And staying in Ukraine, a new round of Russian missile strikes today in Eastern Ukraine.
(BEGIN VIDEO CLIP)
SOARES (voice-over): And here is the aftermath, really, in the military hub city of Kramatorsk. The attack sent civilians scrambling for shelter.
Our CNN team had just arrived at the scene when Russian missiles struck again. Fred Pleitgen has this report.
(END VIDEO CLIP)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: There had been a missile strike in that town overnight last night that killed several
people, flattened the building. It was a huge missile that the Russians shot right into the center of town there.
There was a big search and rescue operation that was still going on because the Ukrainians believed that there are still people and were still people
trapped underneath the rubble.
So we went to that area to film there and we had just arrived on the scene, had parked our vehicles and gotten out of those vehicles when another
missile struck in the exact building that we were parked in front of.
So we heard a loud bang; there were a lot of civilians there on the street, many of them then trying to take shelter. We did the same thing. We then
went toward another building to try to take shelter there.
And as I looked up, I saw another missile that then hit almost the exact location, causing a huge explosion there, leading to even more people
trying to flee the scene. We tried to run for cover, went for shelter.
And after a while, tried to get out of there. But I think one of the things it is very important to point out is that there was a big search and rescue
operation going on, on the ground, and the Russians targeted exactly the area where that search and rescue operation was going on in the city of
This was not some sort of military facility; we saw no military facilities in the area. We saw a lot of civilians, however, who were in that area and
this was right in the center of town. Certainly, we later got word from the Ukrainians, who said they believe that these were S-300 missiles that were
used in these strikes by the Russian military.
Now those are normally missiles that are used to try to take down airplanes at high altitude, very powerful missiles.
They also have a ground to ground configuration but when they're used against surface targets, they are extremely inaccurate, which means if they
are used against surface targets in densely populated urban areas, you have the potential to cause extreme harm amongst civilians.
So far, the Ukrainians are saying it is still fairly fresh and there are several people wounded in this one. Obviously, several people were killed
the night before.
So certainly, a lot of carnage there in the center of town, as we do see some of those population centers are really, right, now under attack from
those missiles launched from the Russian side.
SOARES: Important reporting there from our Fred Pleitgen and team on the ground. We will take you back now to our business agenda. It really is a
tale of two indices on U.S. markets today. The Dow is down almost a third of 1 percent.
Health care stocks are pulling the Dow down. But that's not the full story. The Nasdaq is still roaring, as you can see there. One and two tenths of a
percent or so. It's been boosted, as we told you at the top of the show, by Meta shares.
At one point, they were up more than 25 percent after the company announced a focus on efficiency. As, well important to point out, as a massive share
buyback. The S&P also gained up around 1 percent.
It is a gorgeous day on the stock market for ELF Beauty. That's up around 14.
Is it 14?
Just over 14 percent. The cosmetics and skin care company smashed estimates for the third quarter and earnings were 108 percent higher than Wall Street
expected. Quite a surprise, no doubt. The California-based company also raised its outlook for this year.
All this comes, of course, despite a global cost of living crisis, making a case for the famed lipstick index, all the idea that people buy small
luxuries to boost their mood in hard times.
Tarang Amin is the CEO of ELF Beauty. He joins me now from California.
Tarang, thank you very much for joining us here.
First of all, on the lipstick index, is there any truth to that?
TARANG AMIN, CEO, ELF BEAUTY: Well, thank you for having me. You know, there is some truth but I'd say there is more on the lipstick index that
just in hard times. Mass beauty has performed extremely well.
And we very much see that, in the third quarter, our category in the U.S. was up 8 percent from mass cosmetics. We were up 36 percent. And we
continued to deliver our 16th consecutive quarter of net sales growth.
So we have seen this continuation of the trend, regardless of where the economy is. But definitely, as you, say it's a small luxury everyone can
afford. And more importantly, people are ready to get out and express themselves.
SOARES: Yes, I think that's so good. And we'll break that down, exactly what you said. But if I can ask my producer to bring that share price back.
It really tells a story of what we are seeing, with your company. You see share prices from February 2022 to this year and what we have seen, it is
16th, isn't it?
The consecutive quarter of growth. Net sales have been doing particularly well. Just talk us through the drivers, in particular, behind this growth.
AMIN: Sure. So if you just take a look at our third quarter, we're up 49 percent from a net sales standpoint and up 69 percent from an adjusted
standpoint, building 150 basis points of market share.
There is three main drivers. First and foremost is our value proposition. We make the best of beauty accessible to every face. Second is our
powerhouse innovation, we have a unique ability to create products you previously could only find in the prestigious arena and make them
accessible and affordable to consumers.
And lastly, it is our exceptional marketing -- and our ability to engage consumers, particularly Gen Z, who are the number one brand amongst teens
in the U.S. That value equation, our innovation and our marketing definitely are resonating. And they have been for sometime.
SOARES: Yes. And you have become a leading Gen Z brand. You've connected incredibly well, I believe, with consumers. From what I understand you
really embrace TikTok. I'm not on TikTok, I'm going to be honest. But you really embraced it.
So just how successful has that been from a marketing point of view?
AMIN: You know, we were one of the first beauty companies on TikTok and it's been quite successful. We started with our own hashtag challenge, I
think our latest challenge on TikTok, at something like 15 billion views. So it's definitely getting strong engagement.
And what we now see is products that we launched, for example, our primer, which sells for $10 compared to a prestige comparison at $36. Often,
consumers find it on TikTok where a consumer will do their own comparison. And you see it take off virally.
We are broader than TikTok, as well. TikTok has been terrific for us but we are also one of the first beauty brands on Twitch, as many of our consumers
are gamers and watch others play games. We have our own channel there.
We are one of the first beauty companies, actually the first beauty company, on BeReal. So I think part of our focus is how do we engage
consumers where they are and what they are doing?
And particularly, amongst Gen Z. We're the number one brand amongst teens in the U.S.
SOARES: And I'm guessing after several years of COVID, people want to get out.
People are prepared to spend that little bit, just to socialize, right?
Is that what you've seen, as well?
AMIN: No, we definitely see that. I think the pandemic was really tough on this category. There are periods where the category is down as much as 20
present. We were able to weather all of that and grow despite that.
But it's really wonderful having the tailwind. And it's exactly what you say, people want to be able to express themselves and go about their normal
lives. And our category is one which really lends itself to doing just that.
SOARES: We are you wishing the best of success. Thank you very much there, we appreciate it.
And coming up, CNN's Kristie Lu Stout reports on the conservationists restoring Hong Kong's abandoned reefs to boost biodiversity.
SOARES: Hong Kong's Pak Nai is known for its stunning coastline and beautiful sunsets. It's also home to an abandoned oyster farm that has
turned into a hot spot for marine biodiversity.
Today on Call to Earth, CNN's Kristie Lu Stout reports on the success of a reef restoration project in the area and how the reintroduction of oysters
has played a vital role.
KRISTIE LU STOUT, CNN CORRESPONDENT (voice-over): Tucked away the northwest corner of Hong Kong with the high tech Chinese mega city of
Shenzhen in sight is a rich habitat that is home to mangroves, soft muddy shores and oyster reefs that date back centuries.
STOUT: For over 700 years local farmers cultivated oysters here in the mudflats of Pak Nai. In recent decades, traditional oyster farming has
declined due in part to coastal reclamation and overharvesting.
STOUT (voice-over): But conservationists like Marine Thomas have discovered that reintroducing oysters to the abandoned reefs can boost
biodiversity and strengthen these shores.
MARINE THOMAS, SENIOR CONSERVATION PROGRAM MANAGER, THE NATURE CONSERVANCY: Usually people will associate oysters with food but less known is that
oysters and other shellfish create habitats. They create reef habitats. In fact, just like coral reefs, they will bunch together and create these hard
structures that you can actually walk on.
STOUT (voice-over): In a survey of the city's coastlines, researchers from the Nature Conservancy at the University of Hong Kong discovered existing
reefs like these old farms could potentially act as a source of oyster larva.
They also found that a single Hong Kong oyster can filter up to 30 liters or eight gallons of water an hour, one of the highest filtration rates
recorded for the species.
Another finding the reefs hosts six times more species and bear mudflats, as the piles of shells provide shelter for worms and small crabs,
attracting a variety of animals, including birds like this little egret.
STOUT: And yet another benefit mitigates the effects of climate change. So how does the humble oyster do that?
THOMAS: So the humble oyster will also help us fight climate change if it's in a reef structure. So if it's in a hard reef structure that is
creating a barrier, think of it as a natural seawall and then it's going to be creating friction on the sea bottom that will attenuate wave action and
therefore also flooding at the back of it.
STOUT (voice-over): Since 2020, Thomas and a team of volunteers have been at work restoring this abandoned oyster farm. They dry old shells in the
sun before returning them to the water to form a base for oyster larva to attach to. They hope to introduce millions of oysters to help revitalize
the area over the next few years.
ASHLEY HEMRAJ, MARINE BIOLOGIST, THE SWINE INSTITUTE OF MARINE SCIENCE, THE UNIVERSITY OF HONG KONG: One of the biggest things that always amazes me
and makes me happy is seeing all the number of crabs here, especially here as you walk the crab walk away.
It's if you fix on it, it's quite amazing to see this. It is really, really beautiful.
STOUT (voice-over): As new oysters grow, they clean the water, provide shelter and food for wildlife and join forces with the mangroves as a
coastal buffer. A spectacular sunset descends on Pak Nai, as the small, briny creatures work to build an ever more vibrant ecosystem.
SOARES: And let us know what you are doing to answer the call with a #CallToEarth. We'll be back after this quick break. Do stay right here.
SOARES: Welcome back, everyone.
There's been some pretty major advances in artificial technology recently. And let's cut to the chase, the big question everyone has is, will it take
The answer appears to be yes and no. Many of the tasks we do at work could easily be replaced. Some experts argue, new tools like ChatGPT could end up
creating more roles than they take away. But that doesn't mean we're all out of the woods.
Many industries like graphic design and music are already feeling the impact of AI. CNN's Vanessa Yurkevich reports now from New York.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Which jobs is AI coming after first?
SHELLY PALMER, PROFESSOR OF ADVANCED MEDIA, SYRACUSE UNIVERSITY: If you're a middle manager, you're doomed. Any kind of commodity salesperson, report
writers and journalists, accountants and bookkeepers and oddly enough, doctors who are looking - who specialize in things like drug interactions.
YURKEVICH: Do you mean out of a job -
YURKEVICH: Or you mean that part of your job --
PALMER: That part.
YURKEVICH (voice-over): That's the relief a lot of Americans are looking for right now. The explosion of ChatGPT, an AI platform, showed us it could
do a lot of what we humans do at work and faster.
YURKEVICH: Will it take my job?
PALMER: Yes and no. It's not going to replace you. Someone who knows how to use it well is going to take your job. And that's a guarantee.
YURKEVICH (voice-over): By 2025, the World Economic Forum predicts that 85 million jobs will be displaced by automation and technology but it will
also create 97 million new roles. We've seen it before in the auto industry.
PALMER: While the auto worker may be displaced because they are not as good at welding or as painting than the robot, there's probably 35 people
that have to be involved in the creation and maintenance of that device that welds better than a person.
YURKEVICH: And that's what happened at Carbon Robotic. Former auto workers now building an AI laser weeder in Detroit for farms.
PAUL MIKESELL, FOUNDER AND CEO, CARBON ROBOTICS: It's a direct result of the history of auto manufacturing that we have that skill set available to
us all in one place.
YURKEVICH: The laser weeder, still operated by a human but run by AI, can do the work of between 40 to 80 people, says the CEO, filling roles that
are hard to find humans for.
MIKESELL: Labor is harder and harder to find every year, particularly farm labor. And an AI system like ours that can do that job automatically saves
a lot of time, money, effort.
YURKEVICH: This music is composed solely by artificial intelligence called Ava. It even has an album you can stream.
AI music is more affordable. There's no producer, composer or artist to pay.
KARL FOWLKES, ENTERTAINMENT AND BUSINESS ATTORNEY, THE FOWLKES FIRM: It's taken away opportunity from songwriters, producers and artists, right?
So the people that are trying to feed them -- their families.
YURKEVICH: Something similar is happening in the art world, leaving artist Karla Ortiz and two others to file a class-action lawsuit against three AI
art companies for copyright infringement. Ortiz claims they're using her name and art to train the AI.
KARLA ORTIZ, ARTIST: It's feast and famine for most of us. We go job by job. And what happens when there's a little bit less work to go around?
YURKEVICH: Stability AI, one of the companies named, says the suit misunderstands how AI and copyright law work, adding it intends to, quote,
defend ourselves and the vast potential generative AI has to expand the creative power of humanity. The two other companies did not respond.
ORTIZ: I never thought we'd be here. It's like straight out of a sci-fi movie.
UNIDENTIFIED MALE: My father tried to teach me human emotions.
PALMER: There's a wonderful scene in the movie "I, Robot." Detective Spooner hates robots. And he says --
WILL SMITH, ACTOR, "I, ROBOT": Can a robot write a symphony?
Can a robot turn a canvas into a beautiful masterpiece?
PALMER: And the robot looks up and goes --
UNIDENTIFIED MALE: Can you?
PALMER: Every one of us is not Mozart or Rembrandt or Picasso or choose your super famous, amazing artist or artisan. We're just people. This is
not coming to kill us, it's coming to help us.
YURKEVICH (voice-over): Vanessa Yurkevich, CNN New York.
SOARES: U.S. President Joe Biden wants airlines to let parents sit with their young children without paying any extra fees. It's part of the
administration's efforts to make the airline industry more competitive.
Some of America's biggest carriers say the move would drive up the costs. It comes as airlines fall out of favor with customers. Even before this
winter's meltdowns, remember those, Gallup said 37 percent of Americans had a negative view of airlines.
Here to discuss all of this is Simon Calder, correspondent at "The Independent."
It's great to have you on the show. That seems like a fair measure from what we heard from President Biden. These unfair fees, he said, add up.
Letting parents sit with their children seems fair, although some parents probably want to sit far away from their children at the moment.
Why such a big fuss about this?
SIMON CALDER, "THE INDEPENDENT": Because it wasn't previously an issue until the ultra low cost carriers came along. So airlines such as Frontier,
for example. Of course we will seat you together but there is going to be a charge for it.
And it really depends how far you go along the road to the idea that you are only buying the flying. If you are going to pay 50 bucks for a Frontier
flight, then absolutely everything on top of that you are going to have to pay for, including sitting next to your 4-year old.
Now in Europe, certainly in the U.K., that simply wouldn't happen. Yes, the airlines can invite you to pay extra to choose your seats in advance. But
if you've got a 4-year old and you turn up, they have to see you next to that child.
The Department of Transportation in the U.S. says you should do that, the airlines should do that but not all of them do at the moment, although I
need to stress that American, United, Delta and Southwest all say they do.
SOARES: But the budget airlines, they don't.
And how much of an impact would that have, would you say, on the cost?
CALDER: You could budget, perhaps, on the trip to Florida or possibly pay anything up to $100, maybe $200 on top. And it is the crucial thing -- and
Joe Biden has also looked at -- let's state the upfront costs of your flight, including baggage.
But it's a question of -- it's a really nuanced question in the sense that, if I turn up on my own, I don't mind where I sit. I've only got a piece of
cabin baggage. Then I just want to buy that $50 fare. You might have a lot more -- and you end up paying $150.
And whether that is fair on families, particularly, or whether you should just let the market decide -- and clearly Joe Biden thinks with this, as
with his work on resort fees --
SOARES: Yes, tell us about that, because obviously these resort fees are added at the end of your bill. They're tacked in at the end of the bill.
And they can really add up.
CALDER: I've just been checking out Caesar's Palace in Las Vegas tonight. I could, being a European, have a rate of $89, I think it's terrific. Two
people, one night.
Only then do I discover that, actually, you're paying at least 50 percent more for the resort fee; another $46 on top of that, which is supposed to
cover things like internet, access to the health area, et cetera, all of which, in most hotels, are already included in the bill.
And in Las Vegas, in parts of Florida, in New York City, these things really drive up prices. And for Europeans, particularly since you are then
also paying another 20 bucks or so for tax, for Europeans, it's just off the scale.
You might find this lovely $90 hotel but then suddenly find you're paying twice as much, particularly if you are a U.K. visitor to the U.S. and
you're dealing in sterling, which sank again today.
SOARES: Don't remind us.
CALDER: You could be having a pretty miserable time.
SOARES: The move by airlines or the suggestion from President Biden seems to be a decent one here. So surely, you'd get a lot of the industry behind
CALDER: Well, sure, yes. But ultimately, they are nickel and diming the passengers. But that's because the passengers have kind of asked for it. If
you look for the most extreme cases in Europe, Ryanair, Wizz Air, every single thing you want to have on top, you're going to be paying extra for.
And they say, well, this is free and fair competition. And, anyway, it's better than the olden days, when we had legacy airlines who would charge
you $300 to get from London to Rome. We'll do it for $100 or, on a good day, you might get it for $50.
SOARES: Yes, extra leg room, standard seats, front seats, the list is endless. Simon, great to have you on the show. Thank you very much.
And a few moments left to trade on Wall Street, will have the final numbers and the closing bell after this.
SOARES: And there are just moments left to trade on Wall Street. The Dow has been struggling all day after yesterday's late session rally. It
dropped at the open and it stayed in the red since. Almost two tenths of a cent lower.
Doesn't tell the whole story, though, with the Dow. The S&P is certainly higher but it's the tech heavy Nasdaq. Look at that. Up more than 3
percent, that's been leading the way.
Meta's best day in a decade has sent the index soaring. Although now coming off some of its earliest highs and there is much more tech earnings to
come. We have, Apple, Amazon and Alphabet all reporting after the bell.
And that is your dash to the bell. I'm Isa Soares. The closing bell will be ringing on Wall Street in the next few minutes. And "THE LEAD WITH JAKE
TAPPER" starts right now.