In this Market Foolery podcast, host Chris Hill is joined by senior analysts Ron Gross and Emily Flippen to talk about a trio of earnings reports and a raft of Emmy winners. First, they advise investors not to worry about the pessimism that greeted FedEx's (NYSE:FDX) recent report -- the company's business is solid. Packaged-food giant General Mills (NYSE:GIS), on the other hand, continues to have troubles in its core U.S. market -- but there were a few bright spots last quarter.

And finally, AutoZone's (NYSE:AZO) report was decent, but the stock is about flat for the year -- does the specialty retailer deserve more respect from Wall Street? Then, it's a shift to the Emmys, which were flat-out dominated by Netflix (NASDAQ:NFLX) and HBO. Ignoring the question of whether or not you should invest money in the companies that are shelling out billions to procure all of those top-shelf shows, the gang has some advice about which series you should invest your time in watching.

A full transcript follows the video.

This video was recorded on Sept. 18, 2018.

Chris Hill: It's Tuesday, September 18th. Welcome to Market Foolery! I'm Chris Hill. Joining me in studio, Ron Gross and Emily Flippen. Thanks for being here!

Ron Gross: How are you, sir?

Hill: I've only had one cup of coffee.

Gross: Uh-oh! That's big, though. I see it right here.

Hill: Well, let's just get through this --

Gross: We'll get through this.

Hill: -- so I can get some more coffee. We're going to dig into some earnings from General Mills and AutoZone. And of course, we're going to talk about the Emmy Awards!

Gross: You have to! It's the law.

Hill: [laughs] It's not the law, but on this show, we talk about stuff like that. Let's start with FedEx, though. First quarter profits came in lower than expected. What is the headline for you, Ron? Because I've seen a couple of different headlines. One of them is, their margins are getting hit a little bit just because they're coming out and they're paying their employees more.

Gross: Yeah. The headline for me is that this is a good report and ignore the rest of the noise.

Hill: The fact that the stock is down 4%?

Gross: Yeah, it's not a thing -- no, it is a thing, of course. But, the stock is down mostly, I think, because tariffs are actually taking a bit of a whack at them. The tariffs implemented so far have hit about 10% of their business in China, where they get about 2% of their overall revenue. It's a real thing. But I kind of view it the way I view currency fluctuations. I ignore it because there's nothing I can do about it. I don't know how long it's going to last. I don't know when it's going to reverse. I don't know what the Trump Administration is going to do with respect to them. So, I just want to look at the business and say, "Are they selling stuff? Are they doing the services that they say they're going to do for a good price? Are they paying their people well?" And they are. It's a strong company that's executing on everything they're supposed to be doing. Revenue up 11%. Earnings are up 38%, which is actually below estimates, but come on! That's a strong business. The stock's only trading 14X earnings. They're doing quite well.

Hill: It's interesting, when you think about how much play the employee raises is getting. It seems to me like, one, that's just a smart move in general. Two, it also seems like a smart move at this point in time. By that, I'm referring to the calendar that we're in right now. We've seen stories come out around seasonal hiring. I haven't seen any numbers coming out of FedEx or UPS yet, but I'm sure they're coming at some point. We've seen retailers like Target, Macy's, etc. Did Fred Smith talk about seasonal hiring on this one?

Gross: Yeah, they're going to boost seasonal hiring about 10% to 55,000. They're adding year-round Saturday delivery. They're bringing back Sunday holiday deliveries to put a little bit more pressure on Amazon there as Amazon is ramping up the pressure on shippers. They're getting in the zone with them on that. Again, they're anticipating, I think, a strong holiday season, putting the people in place to get that done.

Hill: Alright, let's move on to General Mills. Shares of General Mills down more than 7% this morning after first quarter sales came in lower than expected. Emily, General Mills operates in a lot of markets, but the biggest market is North America. It seems weird to say this, but the bright spot in North America for General Mills was actually cereal.

Emily Flippen: Yeah, it's actually really interesting to see. You'll notice that one of the highlights from their earnings -- which was a pretty mixed bag -- was sales growth of almost 9%. But, when you look at North American sales growth, it was negative 2%. Virtually all of their growth now is coming outside of North America. Within the North American market, it's interesting to see the plays that's been going on, in terms of their existing brands and their potential expansion into new brands. North America is their target market. They need to perform well in the core areas like cereal in order to continue to be a good investment for people who are invested. If you are invested, I hope you also had a big cup of coffee today, because it was probably a hard morning to swallow.

It's also interesting to see how their acquisition strategy is playing out. They bought the healthcare pet food brand, which was an interesting play, Blue Buffalo. That's one that's been proven to be not too well received by the market, but potentially expanding outside of slowing growth areas. There's a general consensus that they might have overpaid for this pet food brand. In my opinion, I think future General Mills growth is going to be driven by strategic acquisitions.

Hill: Yeah, we had some analysts on the team who were big fans of Blue Buffalo, and they were kind of bummed when they got bought out.

Gross: They really are going after this pet food business as their growth driver. Obviously, they're doing it through acquisitions, as Emily said. I haven't looked at the balance sheet recently, but I think it's whacking around the balance sheet a bit. Interest expense is higher, if I'm not mistaken, and they've got to be careful to make sure that balance sheet is stable, especially if there's weakness in their North America business.

Hill: Emily, in terms of the international growth, how heavily can they lean on that? As you said, you look at what they did in North America. Cereal was the bright spot. Snacks were down in North America. Yogurt was down in North America. Is international still small enough that any meaningful growth they get internationally is going to be good, but it's not really going to move the needle? Or is it genuinely getting to be a bigger piece of the pie?

Flippen: I think it's genuinely getting to be a bigger piece of the pie. While they still are sticking with North America as their target market, and you can see that with a lot of these smaller niche brands they're really pushing here, I think they're realizing that, in terms of their life cycle in America, cereals, yogurts, these sort of products, have changed for the American tastes. They're looking at, how can they play off of their core competencies in new markets like Asia and Europe. It'll be interesting to see about their ability to expand more into these areas moving forward. To me, that's going to be the most key aspect of their ability to continue to grow in the future.

Hill: They also own Haagen Daz.

Flippen: Haagen Daz is international production, too, which is a really big part of that.

Hill: That's rock solid.

Gross: It's tasty, too!

Hill: That's what I meant. I wasn't talking so much about the business. That's just a good product. AutoZone's fourth quarter, eh. I mean, the same-store sales looked pretty good?

Gross: I don't know. Overall sales up 1%. As close to zero as you can get without being zero. I would say a little bit anemic. But this is not that big of a growth business. As you said, same-store sales a little bit better at 2.2%. Profit beat expectations. Nothing wrong with that. Margins came in pretty good as a result of them selling to business units. They did have some higher merchandise margins. But, their supply chain costs offset that a bit. Overall margins looked fine. They brought back a ton of stock this year, over $1.5 billion worth of stock, at an average price of $664. The stock is currently at $728. As we sit here today, it looks like a good capital allocation strategy, good use of capital for them there.

Hill: Yeah, it's a good thing that they're good at buying back stock, because they do that a lot.

Gross: Yeah, and so far, it seems to be paying off.

Hill: Anything stick out to you, Emily?

Flippen: What sticks out to me is that this stock, despite a relatively strong earnings, there's nothing glaringly red flag about the company. It's underperformed the market all year. I think it's interesting, they're taking shareholder-friendly actions, but I think the stock's only up about 4% so far year to date.

Gross: Actually, after today's hit, we might be closer to flat, or maybe just up 1% or so.

Hill: Putting aside what has happened over the past week in the Carolinas and in Virginia, isn't the environment in North America more favorable to companies that are in this business? We just seem to be experiencing more extreme weather, whether it's winter weather or -- cars are getting beaten up, I guess, is my point. It seems like we're in a better environment for businesses like AutoZone.

Gross: Yeah, it's kind of like a steady-eddy business. They have pockets of weakness here and there. The Rust Belt had been a little bit of a problem for them, but that seems to have firmed up over the summer. They're continuing to expand, 78 new stores in the quarter alone, now at over 5,600. It's a solid business, for sure. It's just not going to knock the cover off the ball like a high-tech stock would.

Hill: The Emmy Awards were last night. If you're scoring at home, tie score between Netflix and HBO. 23 statues apiece, although I'm sure the Netflix people would want me to point out that, just in terms of the Primetime Emmys, which were the non-technical, the more glamorous awards, Netflix took home seven, HBO took home six. If nothing else, Emily, it really does seem like, particularly for Netflix and Netflix shareholders, yeah, paying for content appears to be paying off.

Flippen: Oh, yeah. And it's not just tying for HBO in terms of nominations. Netflix also tied with cable for the number of wins. I think there's something to be said for streaming services taking over here in the future.

Gross: Yeah, it's fascinating. I'm going to sound like an old man because I am. In the old days, I would know all the nominations and I would at least have a familiarity with all the shows. Now, there's so many shows, and so many ways to get different content, I didn't recognize the names of half of the nominees or the shows that were nominated.

Hill: I watched the entire event. There were definitely shows that came up that I thought to myself, "I've never heard of that." And in some cases, people were winning awards, and it's like, "Wow, I've never heard of this actor or actress and I've never heard of this show." But there were others where I either had heard of the show, or I knew the person winning the award. It spurred some ideas, in terms of, "OK, maybe I should try and hunt this show down and watch it."

Gross: I thought about that when I saw Henry Winkler. I'm a huge Happy Days Fonzie fan from back in the day. To see Henry Winkler win his first Emmy, it was a nice way to start off the evening and it made me say, "Well, maybe I should check out that show."

Hill: That's very nice. So, for the HBO show Barry -- producer Dan Boyd, big fan of the show Barry -- starring Bill Hader, and he was one of the creators of it. I heard an interview with him earlier this year. Henry Winkler, who now has to be ...

Gross: He's in his 70s.

Hill: I was going to say, he looks great, he's got to be in the 70s. But, I heard an interview with Bill Hader, where he was talking about younger people on the set, younger people on the crew, who had no idea that there was a point in time 40 plus years ago were Henry Winkler was --

Gross: He was the biggest!

Hill: He was the biggest star on television, and he was the coolest character on television.

Gross: Without a doubt.

Hill: This was many, many years ago.

Gross: I agreeamundo.

Hill: [laughs] Wow, you are dating yourself. This is, of course, many years before Emily Flippen was a gleam in her parents' eye. Real quick, we'll go around the table. Emily, I'll start with you. A show to recommend. It can be something from Netflix, Hulu, Amazon Prime, anything. What do you recommend for the listeners out there who are looking to maybe binge a little something?

Flippen: Well if anyone's looking to binge a little something, after last night, I doubt this will come as a shock, but this is a TV show I actually binged with my mom over Christmas last year. It won five awards. Marvelous Mrs. Maisel. Wonderful show.

Hill: Amazon Prime!

Flippen: Amazon Prime, yep.

Hill: Yeah, it won all those awards.

Flippen: It's sweet. A lot of people thought it was undeserved. But, me, not knowing the competition, loved it! [laughs]

Hill: That's fantastic! Yeah, that's definitely on my list. Ron, what about you?

Gross: I am just catching up to Ozark. My wife and I just started binge-watching it and we're loving it. Netflix show. Really digging it.

Hill: Season 2 just started.

Gross: Yeah, we're early season one still.

Hill: Let's go to producer Dan Boyd. Dan, you're giving the thumbs up on Ozark, I know, and I know you're a big fan of Barry. Any other show you might want to throw out there for the dozens of listeners?

Boyd: This one might be a little surprising, but it's also a Netflix. It's called Ultimate Beast Master. It's one of those obstacle course shows. They group the athletes by country. And it's sort of like the Ninja Warrior Olympics. It's great. It's hilarious. I love it!

Hill: It's a team sport?

Boyd: No, it's the individual competitors, but they're on teams divided by what country they're from.

Hill: Ultimate Beast Master.

Gross: What a great name!

Hill: I have never even heard of that show!

Gross: Me either.

Hill: I'm just going to throw out there, for anyone who is a fan of drama, and it seems like Ozark -- we should probably trade shows. I haven't watched Ozark yet. I did, however, watch the first season and a half of Goliath on Amazon Prime, with Billy Bob Thornton. I'm halfway through Season 2. That is really great drama. A little dark at times. A couple of curveballs here and there. But wonderfully acted. It wouldn't surprise me if he showed up in future Emmy awards.

Gross: Nice!

Hill: Emily Flippen, Ron Gross, thanks for being here!

Gross: Thank you, sir!

Flippen: Thank you!

Hill: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition of Market Foolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We'll see you tomorrow!