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Pyrrhic Victory for Puma?

Takeaway: Did Nike deliberately inflate the price Puma paid?

Puma to Outfit Arsenal Football Club

(http://online.wsj.com/news/articles/SB10001424052702303553204579346393097168058)

Pyrrhic Victory for Puma? - ars 

  • "Puma AG said it would supply the uniforms and merchandise for English Premier League team Arsenal Football Club..."
  • "He wouldn't comment on the value of the deal beyond saying it represents the 'biggest deal in Puma and Arsenal's history.' British press reports suggest Arsenal will receive £30 million ($49.7 million) a year for the five years of the deal."

Takeaway from Hedgeye Retail analyst Brian McGough: Puma beat out Nike for the right to spend $50 million to put their logo on Arsenal's jersey. Nike is currently in the midst of negotiations with Manchester United, and most likely bowed out of the Arsenal talks after Puma inflated the price. Either that, or in typical Nike fashion, it knew how badly its competitor wanted the deal, so it bid up the price knowing that it would ultimately walk away.

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IS VENEZUELA NEXT?

Takeaway: We see heightened risk of a material devaluation of the Venezuelan bolivar (VEF) over the intermediate term.

CONCLUSIONS:

 

  1. All told, we see heightened risk of a material devaluation of the Venezuelan bolivar (VEF) over the intermediate term. This is actually not our first rodeo here; recall that we correctly predicted the eventual devaluation in FEB '13 of -32% in our OCT '12 note titled: "IS CHAVEZ POISED TO DO MORE IN VENEZUELA?".
  2. In normal times, that catalyst might come-and-go without any meaningful degree of broad capital markets impact. In today’s increasingly scrutinized emerging market investment landscape, however, we can’t see how another gap down in an EM currency bodes well for broader sentiment towards EM assets and a reversal of #EmergingOutflows.
  3. Looking to actual conditions on the ground in Venezuela, credit investors have been increasingly worried of late. 5Y CDS has ramped +271bps in the YTD to 1,419bps wide. The move on the 1Y tenor has been even more dramatic since then (+316bps to 1,486bps wide – i.e. wider than the longer 5Y tenor).
  4. Moreover, Venezuela’s benchmark 10Y USD bonds have dropped -8.72 points in the YTD to 66 cents on the dollar and are now yielding a world-beating 16.12%.
  5. Perhaps creditors are anticipating that President Maduro does something equally as dramatic over the intermediate term (i.e. yet another material devaluation of the VEF – or worse). Bloomberg Consensus currently anticipates a VEF devaluation from the current official rate of 6.3 per USD to 10.3 per USD (-39%) by the end of 1Q14.

 

In the wake of Argentina’s currency devaluation last week, we’ve gotten a couple of questions from subscribers asking, “who’s next?”.

 

While it’s tough to get inside the head of foreign (or domestic) policymakers with regard to timing, we think Venezuela is definitely on what appears to be a growing list for prospective material currency debasement. Please note that we don’t care if it’s an intentional devaluation or unintentional debasement; monetary and fiscal policymakers always have a choice with respect to protecting the purchasing power of their citizenry from both internal and external forces.

 

Venezuela remains the certified gong show we’ve identified it as in our published work over the years – most recently in our proprietary EM Crisis Risk Model, which shows that Venezuela is overly exposed to BoP/Currency Crisis risk (i.e. Pillar I) and Political & Regulatory (i.e. Pillar IV) risk:

 

IS VENEZUELA NEXT? - 1

 

This, of course, comes as a surprise to no one, given the country’s history of devaluations, expropriations etc. (CLICK HERE for our most recent work on these topics). It’s fitting that the country is rated B-, Caa1 and B+ by S&P, Moody’s and Fitch, respectively, and all three agencies maintain a negative outlook on their ratings.

 

Looking to actual conditions on the ground, credit investors have been increasingly worried of late. 5Y CDS has ramped +271bps in the YTD to 1,419bps wide. The move on the 1Y tenor has been even more dramatic since then (+316bps to 1,486bps wide – i.e. wider than the longer 5Y tenor).

 

IS VENEZUELA NEXT? - 2

 

That is worrisome. Perhaps creditors are anticipating that President Maduro does something equally as dramatic over the intermediate term (i.e. yet another material devaluation of the VEF – or worse). Bloomberg Consensus currently anticipates a VEF devaluation from the current official rate of 6.3 per USD to 10.3 per USD (-39%) by the end of 1Q14.

 

Maduro’s recent activity (as well as the recent activities of his gov’t) would certainly support that view:

 

  • Devaluing the official exchange rate for oil investments and tourist dollars in mid-DEC;
  • Forcing international airlines to keep their revenues locked in the country at the official exchange rate;
  • Stepping up the military enforcement of broad price controls that have been negatively impacting over 1,000 businesses operating in Venezuela – both domestic and foreign; and
  • The central bank delayed the release of its DEC CPI report for 20 days; a preliminary report on public spending, etc. that was scheduled to be released on DEC 31st has also yet to be released.

 

Meanwhile, here are five key macroeconomic statistics that are currently pressuring Venezuelan policymakers to act:

 

  1. The VEF has lost ~75% of its value in the black market over the TTM, with one USD fetching as much as 64 VEF in Caracas;
  2. Reported inflation ripped to +56.2% YoY in 2013 from 21.3% in 2012 as producers have hoarded goods and/or reduced production in anticipation of another devaluation and further price increases;
  3. The country’s scarcity index, which measures the percentage of goods that are out of stock and has been conspicuously absent since its OCT ’13 publication, hit 22.4% in OCT – the highest ratio since JAN ’08;
  4. Real GDP growth slowed dramatically to +1.6% YoY in 2013 from +5.6% in 2012; and
  5. At $21.2B as of JAN 24th, central bank FX reserves have declined -40% from their peak in DEC ’09.

 

IS VENEZUELA NEXT? - 3

 

IS VENEZUELA NEXT? - 4

 

The first statistic is supportive of a devaluation in the context of President Maduro’s recent promise to “create a unified exchange system next year which will provide foreign currency at a fair price for the functioning of the economy.” Under the current regime the government provides ~95% of the USD in the economy to selected companies and individuals at 6.3 VEF per USD. The remaining 5% is sold through weekly auctions at a higher floating rate, which currently stands at 11.3 VEF per USD.

 

The last statistic supports a currency devaluation because the country may seek a devaluation to shore up its illusion of creditworthiness (via artificially inflating FX reserves like Argentina does). The timing of which is anyone’s guess, but we’re guessing last week’s move in the ARS has investors pulling forward expectations, at the margins.

 

In spite of the aggressive price controls, we can’t see how another devaluation does not promote further rampant inflation – which we’d argue has played a critical role in perpetuating the well-documented social unrest in the country in the wake of Chavez’s death.

 

Net-net-net-net-net, the bond market’s got this one right, folks; Venezuela’s benchmark 10Y USD bonds have dropped -8.72 points in the YTD to 66 cents on the dollar and are now yielding a world-beating 16.12%. Remember, a weaker currency makes it harder to service USD debt (in the absence of pillaging central bank FX reserves, of course).

 

IS VENEZUELA NEXT? - 5

 

All told, we see heightened risk of a material devaluation of the Venezuelan bolivar (VEF) over the intermediate term. In normal times, that catalyst might come-and-go without any meaningful degree of broad capital markets impact. In today’s increasingly scrutinized emerging market investment landscape, however, we can’t see how another gap down in an EM currency bodes well for broader sentiment towards EM assets and a reversal of #EmergingOutflows.

 

Aye, aye, aye…

 

DD

 

Darius Dale

Associate: Macro Team


NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE

Takeaway: We remain broadly bearish on EM assets and continue to think that absolute returns for EM assets will be negative over the intermediate term

CONCLUSIONS:

 

  1. We continue to think it’s of utmost importance for investors to proactively prepare their portfolios for what we continue to see as the next cycle of emerging market crises.
  2. We remain broadly bearish on EM assets and continue to see them for what they are: overpriced relative to a long-term TAIL investment cycle that has clearly turned in favor of DM assets, at the margins. For some long ideas in the DM space, look no further than our #EuroBulls theme, which continues to augur well for appreciation across the UK and German capital and currency markets.
  3. We continue to think that absolute returns for EM assets will be negative over the intermediate term. In fact, we continue to believe that EM assets lose in two out of the three most probable intermediate-term global macro scenarios. As such, we don’t think discretion is overly warranted until investors drill down into the country level.
  4. Here are three more important things to highlight: 1) the US Dollar Index remains broken TREND and TAIL (old news); 2) the 10Y Treasury Yield is now below its TREND line (new news); and 3) the CRB Index is now trading above its TREND line (new news). If this setup continues to manifest in the face of declining risk aversion, then we could get behind EM assets on the long side for trade.
  5. For now, however, we’re comfortable with our current positioning. The SPX is now testing its TREND line of support (1779); a confirmed breakdown below that level in conjunction with the VIX remaining above its TREND line does not augur well for declining risk aversion with respect to the intermediate term.

 

Needless to say, last week was a brutal week if you were running a EM FX carry-trading strategy(ies) or, if you’ve been conditioned by the past ~10Y to be permanently bullish on emerging market assets.

 

As of Friday’s close, the JPM EM Currency Index had fallen -1.8% WoW; LatAm – which remains our favorite region on the short side of EM capital and currency markets – led decliners with the Bloomberg/JPM LatAm Currency Index falling -3.2% WoW. The iShares MSCI Emerging Markets Index ETF (EEM) declined nearly -4% last week and is now down -8.5% for the YTD.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - EM

*As of Friday's close.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - FX

*As of Friday's close.


The Argentine peso was undoubtedly the life of the party, declining over -15% last week. If you missed our note from last Thursday titled: “ARGENTINE DEFAULT 2.0?”, we encourage you to review it whenever you have a few minutes to spare; it’s a must-read for any investor attempting to understand the myriad of idiosyncratic risks that one must consider when allocating capital to emerging markets at this stage in the cycle.

 

We continue to think it’s of utmost importance for investors to proactively prepare their portfolios for what we continue to see as the next cycle of emerging market crises. Contrast the following preparation with the hyperbolic and emotional research that you’ve likely been spammed with from the sell-side over the past ~72 hours:

 

 

All told, we remain broadly bearish on EM assets and continue to see them for what they are: overpriced relative to a long-term TAIL investment cycle that has clearly turned in favor of DM assets, at the margins. For some long ideas in the DM space, look no further than our #EuroBulls theme, which continues to augur well for appreciation across the UK and German capital and currency markets.

 

When we last left off, we had a number of ways to play this view within the construct of EM assets; below is a review of that strategy:

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - OW LONGS

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - UW SHORTS

 

  • ASSET CLASS LEVEL: a cumulative -117bps of equal-weighted performance
    • Overweight EEM: -6.5%
    • Underweight EMLC: -5.4%
  • REGIONAL LEVEL: a cumulative +18bps of equal-weighted performance
    • Overweight GUR: -7.5%
    • Underweight GML: -7.7%
  • COUNTRY LEVEL: a cumulative +614bps of equal-weighted performance
    • Overweight EWW: -8.6%
    • Overweight EPOL: -3.6%
    • Overweight RSX: -9.5%
    • Overweight EWY: -6.6%
    • Overweight EWT: -2.4%
    • Underweight EWZ: -8.6%
    • Underweight ECH: -7.4%
    • Underweight EIDO: +1.2%
    • Underweight THD: -5.9%
    • Underweight TUR: -14.7%

 

Obviously if we were running a fund, we would not have these positions on in equal weights; we’ve obviously been the loudest EM bears on the street since last APR, so it would only make sense to size the shorts appropriately larger than the longs.

 

From here, we continue to think that absolute returns for EM assets will be negative over the intermediate term. In fact, we continue to believe that EM assets lose in two out of the three most probable intermediate-term global macro scenarios. As such, we don’t think discretion is overly warranted until investors drill down into the country level.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - Global Macro Scenarios

 

In that vein, the only change we would make there would be to remove Russia (RSX) and Mexico (EWW) from the overweight ideas. Crude oil is now bearish TREND and TAIL on our quant factoring and we no longer wish to seek out that exposure on the long side. Indonesia (EIDO) is nowhere near as compelling on the short side as it once was, given the recent acceleration in hawkish rhetoric out of Bank Indonesia; still, we’d like to see them put their money where their mouth is in that regard (i.e. hike rates again) before we can get behind a turnaround story here.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - Crude Oil

 

Here are three more important things to highlight: 1) the US Dollar Index remains broken TREND and TAIL (old news); 2) the 10Y Treasury Yield is now below its TREND line (new news); and 3) the CRB Index is now trading above its TREND line (new news). If this setup continues to manifest in the face of declining risk aversion, then we could get behind EM assets on the long side for trade.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - DXY

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - 10Y UST Yield

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - CRB Index

 

For now, however, we’re comfortable with our current positioning. The SPX is now testing its TREND line of support (1779); a confirmed breakdown below that level in conjunction with the VIX remaining above its TREND line does not augur well for declining risk aversion with respect to the intermediate term.

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - SPX

 

NAVIGATING #EMERGINGOUTFLOWS: STRATEGY FROM THE SOURCE - VIX

 

For more details about our multi-factor, multi-duration quantitative overlay, please refer to slide #5 of our 1Q14 Macro Themes presentation. It remains unclear to us how so many strategists make calls on markets without a proven process to contextualize critical inflection points in global markets in real-time, but to each his/her own.

 

At any rate, we’ll stick with our process for marrying bottom-up macro fundamentals (e.g. our proprietary EM Crisis Risk Index and our deep-dive research on the previous two EM crisis cycles) with a top-down overlay (e.g. our quantitative market timing signals).

 

Don’t fix it if it ain’t broken!

 

DD

 

Darius Dale

Associate: Macro Team


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Just Charts: XLP Broken

In this note, we look at the largest companies by market cap in the Consumer Staples space from both a quantitative perspective and fundamental aspect where we can offer one.  As you will see over time, sometimes our fundamental view does not align with the quantitative setup (though not often).

 

Consumer Staples stocks are off to a tough start in 2014. Based on Friday’s close, the sector is down -3.7% year-to-date vs the S&P500 at -3.1%. From a quant setup the sector is broken across the immediate term TRADE and intermediate TERM trend durations, our language for a bearish medium term sector outlook. You’ll see a similar bearish setup for most of the largest names in Consumer Staples (see charts below). 

 

We generally believe that the group is way over-owned and loaded with premium valuations. Headwinds we see for the group include:

  • U.S. consumption growth is slowing, and dragging global growth lower 
  • The economies and currencies of the emerging market – once the sector’s greatest growth engine – remain weak with the prospect of higher inflation in 2014 (a Hedgeye Q1 2014 Macro Theme) eroding real growth
  • Less sector Yield Chasing as Fed continues its tapering program
  • In the U.S.,the most recent data on Disposable Income per capita is making new lows, and
  • The high frequency Bloomberg weekly U.S. Consumer Comfort Index has not seen any real improvement over the past 6 months and was flat week to week

 

Top 5 Week-over-Week Divergent Performances:


Negative Divergence: HLF -16.2%; TUP -10.5%; NUS -9.3%; AVP -7.5%; BNNY -7.4%

Positive Divergence: SAFM +2.0%; THS +1.8%; KMB +1.3%; RAI +0.8%; DPS +0.3%

 

 

Reported Companies Last Week:

  • KMG  – reported 5% (high-end of targeted range) organic sales growth and 11% EPS growth in 4Q13.  The sequential incremental growth QtoQ was driven from international growth (KCI is 39% of total sales).  The company continues to make good progress on spinning out its health care business.  Management 2014 guidance was consistent with long-term objectives and slightly better that street expectations.  The strength in the KMB story is consistent with our quant factors.
  • PG – The PG quarter was in-line and un-inspiring consistent with the bearish quant set-up. 

 

The “Newsy” News Flow:


HLF and NUS: the underperformance of HLF was driven by a letter penned last Thursday from Massachusetts Senator Ed Markey (D) to the FTC, SEC, and HLF requesting more information about the company’s business practices and suggesting the company is running a pyramid scheme. Of note is that Markey has also been active and public against the marketing of Energy Drinks to youth (including MNST) and was a leading voice in the investigation into the BP oil spill.

 

Two weeks ago Bill Ackman of Pershing Square (and author of a 343 page PowerPoint issued in DEC 2012 on why Herbalife is a pyramid scheme) announced that he intends to issue a new report next month on how HLF operates illegally in China. This came on the heels of Chinese regulators announcing they’d investigate Nu Skin on charges it was running a pyramid scheme in the country.

 

The drastic stock movement on newsy events that we saw last week is nothing new to these two stocks. In short, we wouldn’t be surprised to see Ackman roll out the kitchen sink and utilize his rolodex to see his Big Short idea get going in the right direction (his price target is zero), however we cannot underscore enough how committed a community of activists (Icahn and Loeb to name a couple) are to bury Ackman on the long side and how unwilling a Federal agency (SEC, FDA, FTC, or IRS) currently is to open Pandora’s box on the multi-level-marketing business and decide whether HLF (or NUS for that matter) is a pyramid scheme.

 

We will opportunistically take advantage of these price swings on fear, however do not claim to know definitively if HLF is or is not a pyramid scheme. (For more following last Thursday’s announcements see our note).  

 

 

Earnings Calls This Week (all times EST):

 

Wednesday (1/29): TUP 8:30am; ENR 10am; SPB 10am

Thursday (1/30): HSY 8:30am; MO 9am; HSH 10:30am; CL 11am; LVMH 12pm

Friday (1/31): TSN 9am; MJN 9:30am; DEO 3pm

 

 

Howard Penney

Household Products

 

Matt Hedrick

Food, Beverage, Tobacco, and Alcohol

 

(o)

 

 

 

Just Charts: XLP Broken - 111

 

Just Charts: XLP Broken - 22

 

Just Charts: XLP Broken - 3

 

Just Charts: XLP Broken - 4

 

 

ALCOHOL

 

DEO – testing a TREND line breakdown (that would be new); TREND = $128.21

Just Charts: XLP Broken - 55

 

BUD – broke its TREND line and volume ripped on that last week; TREND resistance = $102.36

Just Charts: XLP Broken - 6

 

 

BEVERAGE


KO – broke its TREND line last week; that’s now resistance at 39.83

Just Charts: XLP Broken - 7

 

PEP – looks just like KO; recently broken TREND line of 82.59

Just Charts: XLP Broken - 8

 

 

FOOD

 

MDLZ – broke its TRADE line on big volume last week; TREND support of $33.53 now tested

Just Charts: XLP Broken - 9

 

GIS – still one of the ugliest on the list; bearish TREND resistance = 49.36

Just Charts: XLP Broken - 10

 

 

HOUSEHOLD PRODUCTS

 

KMB – best looking long on the list; bullish TREND support = 103.64

Just Charts: XLP Broken - 11

 

PG – ugly with bearish TREND confirmed at 80.65

Just Charts: XLP Broken - 12

 

 

TOBACCO

 

MO – still holding its bullish TREND line of 36.81 support (looks nothing like PM)

Just Charts: XLP Broken - 13

 

PM – nasty bearish TREND = 86.34 resistance

Just Charts: XLP Broken - 14

 



RCL 4Q REPORT CARD

In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

 

 

OVERALL:  

  • MIXED:  2014 is a mixed picture for RCL as suggested by our cruise survey:  stronger Europe, weaker Caribbean.  2014 net yield guidance was solid but not surprising.  We see CCL as the better bet as pricing particularly in the Caribbean looks more robust than RCL in early Wave 2014.

     

RCL 4Q REPORT CARD - rcl1

 

RCL 4Q REPORT CARD - rcl2

 

EUROPE

  • BETTER:  Surge in close-in bookings for Q4 pushed net yields higher than expected.  Mgmt more optimistic on Europe.  Strong NA sourced demand continues to lead the way for the European cruise market. For European-sourced European demand, they're generally meeting expectations.
    • PREVIOUSLY:   
      • Early bookings for the overall Europe portfolio had been very encouraging, with our load factors trending ahead of last year in the mid single-digit range and higher ticket per diem for every month of the season.
      • We're seeing a little bit of a comeback in Southern Europe and Germany.

CARIBBEAN

  • WORSE:  2014 net yields are forecasted down low single digits, lower than the previous forecast of flat to slightly down.  Higher capacity playing a role.  Longer-dated itineraries performing better than shorter-dated ones. 
  • PREVIOUSLY:  
    • We've acknowledged as the Caribbean is of particular concern.  Despite this, our more premium Caribbean products, including the Oasis-Class ships and the Solstice Class ships continue to enjoy superior pricing and are delivering good returns. As a result, based on our early bookings, we expect our core Caribbean yields to be roughly flat to down slightly in 2014.
    • We look forward to the Caribbean returning to better pricing.
    • our Caribbean yield change this year over last year and our preliminary Caribbean yield change outlook for 2014 are roughly equal.
    • While we expect to maintain a high level of focus on driving revenue on all of our Caribbean products, in general, we see more competitive pressure in the near term in South Florida than in other Caribbean homeports.

ASIA

  • BETTER:  Territorial dispute between China and Japan remains a wild card.  However, Asian/Australian bookings are up considerably in 2014.
  • PREVIOUSLY:   
    • For 2014, we have opened up our sailings for booking, once again, based on itineraries offering exclusively Korean destinations. This is, of course, frustrating, particularly since we do not see any signs of positive geopolitical change in the dynamic between China and Japan.
    • Our capacity increase in Asia in 2014 will be just over 20%, which primarily reflects a full-year capacity upgrade from Legend of the Seas to Mariner of the Seas, that occurred in May of this year.

PULLMANTUR

  • SAME:  Mgmt recognized the weakness in the brand but sees a brighter future ahead.  2014 will be a transitional year.  Mgmt expects the biggest benefits of Pullmantur's changes to occur in 2015 and beyond.
  • PREVIOUSLY:  Pullmantur has faced the toughest operating environment of any of our brands, and they've worked hard to overcome the huge obstacle that they have faced.

COMPETITIVE PRICING/PROMOTIONAL ACTIVITY

  • SAME:  Discounting remains prevalent and very competitive during Wave Season.
  • PREVIOUSLY:  Heighted promotional activity is centered mostly around short excursions in the Caribbean.  Pricing in the Caribbean remains very competitive. 

2014 BOOKINGS

  • SAME:  Bookings are 5% higher than same time last year.  APDs up in all four quarters.  Loaded factor flat in 1Q but up in 2Q, 3Q, and 4Q.
  • PREVIOUSLY:   
    • We are currently booked ahead of same time last year in both APD and load factor.
    • Our comparables become a little bit easier going forward.
    • New booking volumes since our last call have averaged about 5% higher than during the same period last year, and our average booking window has extended slightly.
    • Caribbean yields are expected to be flat to slightly down year-over-year.
    • Europe is expected to have a second year of strong yield improvement.
    • Healthy yield growth is expected in Asia
    • Expect moderate growth from the already high-yielding Alaska program.

2014 NCC EX FUEL

  • SAME:  2014 guidance issued for 'flat to slightly down'.
  • PREVIOUSLY:   Just to reiterate on the cost side, our expectations on costs are for them to be better than flat in 2014,

ONBOARD YIELD

  • BETTER:  Onboard again outperformed -across all categories and markets.  Onboard yields were up 8% in 4Q.  Mgmt expects +2-3% onboard yields for 2014. 
  • PREVIOUSLY:  
    • We benefited from new onboard venues introduced as a result of our revitalizations. And we saw further strength in spending from our U.S. customers, which helped generate improvement in gaming, beverage, specialty dining and shore excursions.
    • Onboard is obviously expected to go up but tempered relative to 2013

CELEBRITY

  • WORSE:  While still optimistic on Alaska, mgmt commentary was more guarded.
  • PREVIOUSLY:   
    • Demand for European itineraries has been very strong from all of our core markets, including the United States and the United Kingdom and Ireland. And we are well positioned for another year of yield growth.
    • Alaska has been a solid performer for us over the past couple of years, and we've been maintaining similar yields to those achieved during our record 2011 season.  Bookings and pricing for 2014 Alaska sailings have been trending ahead of last year, and we are anticipating further yield growth for the season. Both Alaska and Europe products operate during our crucial Q2 and Q3 peak seasons and early indications for 2014, as their performance is shaping up very nicely.

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