In this episode of Industry Focus: Consumer, Emily Flippen and Motley Fool contributor Dan Kline discuss retail bankruptcies and how coronavirus is affecting retail businesses. They look at some department stores, restaurants, gyms, etc., and find out what they are doing to steady themselves and the options available to them. They also bring us breaking news from the food delivery space and much more.

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This video was recorded on May 12, 2020.

Emily Flippen: It's Tuesday, May 12, and I'm your host Emily Flippen. Dan, you're with me again today. And you know, we've seen better days for any investors interested in consumer goods out there, to say the least.

And I want to talk today about retail bankruptcies, but not just retail bankruptcies like you've been hearing in the media. Dan, I know that you and Dylan last week, for Wild Card Wednesday, talked a lot about retail bankruptcies. You've been doing a lot of talking about some of the big news during our Fool Livestreams.

But today I want to talk about some of the really good companies that may have been impacted by this coronavirus, maybe not to the point of bankruptcy, but if this was protracted, could be headed that way.

Dan, that was a long introduction; how are you doing?

Dan Kline: It was. I'm good. I've seen more of you in the last month than in our entire previous working relationship.

Flippen: [laughs] That's very true.

Kline: I would say I speak to you as often as I speak to my wife. And I mean that, because by the end of the day I have no ability to talk anymore, she's exhausted from Zoom meetings all day. So, you know, I'm more likely to be sitting at the dinner table texting her than actually talking, because I've been using most of my words on air.

Flippen: Yes, I have said this before, Dan, but I am shocked that your voice has held up through all of this, because you particularly, you've been doing a lot of live streaming for us here and you're still doing the podcast, you blow my mind.

Kline: I don't say no to anything, you know, it's one of those things where we're all stretched really thin right now. People like Austin Morgan behind the scenes are doing things they didn't normally do. So, I take the attitude of, if there's work to be done and you have the capacity to do it, do it, because what else would I be doing right now? [laughs] Like, do I need to play more Madden 2020? I don't think I do.

So, I'm grateful for the work. I know some other people out there are struggling, and we absolutely appreciate that, we're going to talk about that quite a bit on the show. But you know, as long as I can talk, I am going to not say "no" if asked to perform somewhere.

Flippen: And before we jump into, you know, when good consumer goods companies go bad because of pandemic, we have some, I'd say, breaking news. I hate saying the word "breaking news" because I think it makes it sound really dramatic. But we have some breaking news this morning coming out, with reports that Uber (NYSE:UBER) is apparently in talks to buy Grubhub (NYSE:GRUB); and that's the extent of the story that I know. I've been in meetings all morning, so I saw the headline but I know no details. Can you give me any more insight?

Kline: Yeah. So, they're talking, there's no deal. There's some logic in combining the top two delivery services. I don't know if maybe Postmates, or maybe they're not the top two. But they're two of the top delivery services. It gives them more scale, more access to restaurants. What it does not do, and why I think this is a terrible idea, it doesn't change pricing power. If there were only two players, if Uber and Lyft were combining, that would change pricing power. There's still Postmates, there's still local services, there's DoorDash. So, it's not like when these two happen, they're all of a sudden going to be able to raise prices by 50%. So, there is some economy of scale on the backend.

As a consumer this makes me nervous, UberEats has terrible customer service. Grubhub generally does a much better job. And I can tell you which one would win if Uber buys Grubhub.

So, this is one to watch. But I understand why on the surface it makes sense, there's got to be consolidation in this space, but it's really got to go from, like, six to one and some of the local players. There are at least three local players. There's the Delivery Dudes here in West Palm Beach, there's Cravy here in West Palm Beach, and there's at least one more. This is unsustainable, so I'm not sure why putting two bad businesses together, other than you need, like, less accountants and less software people, I'm not sure where the savings is here.

Flippen: [laughs] Maybe I'm just the queen of bad businesses. When I saw the headline, I thought to myself, yes, finally! Although from an investing perspective, not a consumer perspective, because I know where I live, I really only have those two options. I have Grubhub and I have UberEats. I think Postmates doesn't deliver to my area, I am too far out of DC, I'm in Greenbelt, Maryland, so I'm just far off out of the city enough that, you know, Postmates isn't coming toward me. But maybe there are local delivery players, I just never went out of my way to try to find them. Okay, granted, I've ordered from Domino's directly, but otherwise, I've only gotten food delivery during this pandemic from Grubhub or UberEats.

Kline: I would say those companies may not be in your town, but I usually stay out by BWI. Last night I'm there. I'll stay by the mall out there, and there are just so many restaurants there. Postmates is there, DoorDash is there, there's probably others.

If you go to OpenTable right now, they will actually show you not only just what restaurants have delivery available, it will show you what services they're on. So, that is at least a dozen in my market; I haven't been to your market since this happened, but it probably does. And it's really useful to know, hey, oh, I didn't realize that restaurant was doing curbside pickup; I could call them and order, or, oh, hey, this restaurant is now on DoorDash.

Like, there's an Asian place that's pretty far from me that I like, you know, really high-quality sushi and soups and other things. And they're, like, 25 minutes away but they must need the business, so they are now delivering on, I want to say, DoorDash to my house. Which I'm guessing they won't do post pandemic, but right now, you know, any bit of food diversity is a good thing.

Flippen: Yeah, that's great. Maybe I just need to put in more work. [laughs] That's what I am learning from this.

Kline: Yeah, I was joking with our producer, Austin Morgan, before this that I now spend half my time procuring food and making sure it doesn't go bad, because today I got an Omaha Steaks delivery, and my building doesn't call you and say you have a perishable delivery, you just get the same text notice that you get. And it was literally in an Amazon locker. And fortunately, it's on dry ice, so if I hadn't been home and, you know, I had waited a few hours to get it, it would have been OK, but there's so much planning with Instacart and delivery and orders and what's open.

Mother's Day we ordered from Morton's and they showed up with it, it was Grubhub, and it was wrong. [laughs] Like, it just wasn't our order. So, thankfully the woman saw how much I had tipped, which was generous, and went back and got the right order instead of the normal Grubhub procedure which would be to just cancel you. So, it's very tricky right now. And I would like to see better customer service from all of these companies as we come out of this.

Flippen: Well, in addition to the big news coming out from Uber and Grubhub, and we'll see what actually ends up happening with that, I'm sure we'll have other people in our other podcasts following up with the details of if and when a deal happens. But building off of that, we've also had just a really noisy month when it comes to bankruptcies. And as I said at the onset of the show, you and Dylan talked earlier last week about what bankruptcy could actually mean for a lot of these retail companies that we talk about.

And you're a big proponent, you say it all the time and maybe I'm stealing your thunder by repeating your words here, but you always say, these are the companies that were circling the drain before anything really happened with coronavirus.

Kline: Yeah, I mean, when you look at, say, like a JCPenney, probably nothing was going to save JCPenney other than the people it owes money being willing to negotiate. You know, that's not true of Macy's, I actually was on Answers yesterday, talking about some of these same topics, which is a first for me; I've never done that show before. And we took the discussion in more of a light direction, but you're absolutely -- I don't care if Sears goes bankrupt, because Sears was going to go bankrupt anyway; that isn't a coronavirus story, that is just a coronavirus acceleration.

Much like coronavirus has accelerated, say, Netflix subscribers, it's going to get these companies that weren't making money, they're going to run out of cash faster. But what we're talking about today, though, is companies that aren't running out of money, they're doing fine -- now, there's one on this list that isn't -- and they're still being hit, because obviously, you can't open for business, or if you can, you're opening in a very limited capacity. I know, like, Macy's, which is not on this list, has opened some of its stores. But stores with 25% capacity and curbside pickup, they're not going to do the business it takes to justify how big those locations are.

Flippen: Yeah, exactly. What really made me want to talk about some of these otherwise good companies, that are struggling or could be struggling in the face of a prolonged pandemic, was actually a report that I read from MarketWatch. They noted that there were 26% more business bankruptcy filings in April, but consumer bankruptcy filings actually decreased 47% year-over-year.

And there's obviously a lot of things that can play into that, you know, court simply not being open, the stimulus checks that many American households did get, but I think a lot of it could possibly just be shakedown to uncertainty. So, not knowing how long this pandemic could be in existence, a lot of people see their jobs and other layoffs as temporary, so they may not want to declare bankruptcy, because they just simply don't know what the future holds.

But it got me thinking about the companies, these great companies that have a really strong consumer base that are in a fine position right now, maybe struggling a little bit because of the coronavirus, but if that core consumer starts to declare bankruptcy -- if their layoffs are not temporary, they're actually permanent layoffs -- could maybe see significant declines in their businesses. So, yeah, I guess that laid out. I just want to touch on these good companies.

I want to be completely clear; I like these companies. Virtually all the companies that I have, as you mentioned, Dan, on this list, are companies that I like, but I guess I do think about what their business could look like five months from now. If we get to, you know, October and we're still sitting in our houses.

Kline: Yeah, it's also worth noting that there's money out there. I'm actually on Al Jazeera, of all places, in the Middle East this afternoon, probably before this actually goes up, talking about the Saudi Arabia Investment Fund. That was a place not a lot of people wanted to take money from before this, obviously, you know the political issues involving Saudi Arabia. But Carnival Cruise Line took money from them, Live Nation, I believe, is in talks or has taken money from them, Warner Music Group might take money from them. I wouldn't be shocked if they bought a bigger stake in UFC. I don't remember if they sold their stake or it got smaller with the purchase, but they are throwing money around. And some companies do not have the ability to be choosy as to how they raise money. So, this is a really weird time for all of these companies.

Flippen: And you named one that I had on my list there, so I want to talk about it, and that's Live Nation. Live Nation, ticker LYV. I'm used to saying tickers because of our livestreams, [laughs] but Live Nation is the owner of Ticketmaster, which may give you some insight into what their business does, if you're unaware. They are the biggest retailer of tickets for concerts, events, any large groupings of people likely you're going through Ticketmaster and Live Nation to get your tickets for. They charge an arm and a leg for their services, but they are the only game in town.

It has, up until this virus, made them a very compelling investment; even if you, as a consumer, may not like them. But this pandemic, I mean, Live Nation is making essentially no money right now.

Kline: Yeah, they're in a tough position. And they don't have no competition; AEG is a competitor, you could argue Eventbrite is a competitor, but they're of the big two ticketing services. They're the biggest, Eventbrite is an upstart. I forget what AEG's product is called, but they control a lot of venues, so they have some sway too. But there's just no money coming in.

And this is also, as a consumer, forgetting the people involved, bankruptcies are sad because people lose their jobs, would any person who's ever been to a concert be sad that Ticketmaster went out of business? Like, they charge you extra to print your ticket at home, like, the amount of fees they tack-on, I know. I try to avoid Ticketmaster; I buy tickets generally on secondary services. I use one called Vivid Seats, maybe I've used StubHub, because somebody else has paid those fees, I'm just paying whatever they're charging for the ticket, it makes me feel a little bit better.

Live Nation also signs artists to deals, where the artist gets a guaranteed sum of money and then Live Nation gets some upside beyond just what they're charging. And none of that is happening. And this, they're going to do some clever things, there's going to be some pay-per-views, there's going to be some concerts with limited seating where you can also, you know, pay $20 to watch it at home or whatever it is. But essentially, this is a company with no revenue.

And its revenue prospects are, let's call it the first of the year at the best, and that's if there is a viable vaccine in September, which would be the first it could possibly happen, that's manufactured in mass numbers by the end of the year. I guess treatments would be more likely and more possible. But this is a business that was a very healthy company that is now in a very dangerous situation.

Flippen: Yeah. And Live Nation, again, for all the bad things that you can do to consumers, it has ended up being a really wonderfully profitable investment for a lot of people. However, they are a heavily indebted company. And we talk about these bankruptcies, which seems to be the nail in a lot of companies' coffins, is their level of debt. And with a company like Live Nation, their debt comes with a lot of covenants about how much other debt they can take out, how much earnings they can have in comparison to their debt interest?

So, there's assumptions that are made when they take out debt about their continuing operating, and the problem is that we just, at this point, don't have great insight into when Live Nation will be able to make sufficient revenue to cover the billions of dollars of debt that they have surfaced over the past few years.

A lot of lawyers who are listening [laughs] or a lot of contract lawyers who are listening may be upset with my poor terminology here. But what could save Live Nation in this regard is actually, I think, what is legally called "an act of God" in a lot of these contracts. It's a situation that's really outside of the control of Live Nation to do anything about that significantly impacts their business. That could save them from some of these covenants associated with their debt. But all-in-all, it's not a great situation.

And I've had debates with another analyst here at The Motley Fool, Aaron Bush, about how long it could be until we see large scale events come back. And, I think, Aaron is very much into the mindset of, it could be greater than a year before we see Live Nation holding events. If that's the case, this is a company that could be very troubled.

Kline: Yeah. They're also a company, though, that when we have normal, is very profitable. So, one of the things we've been seeing is companies being able to negotiate. And it is missed payments that usually trigger a bankruptcy filing. We saw it with Hertz. Hertz missed a bankruptcy filing, had a period to negotiate with its lenders, the lenders said, well, we'll give you an extra three weeks to figure this out. That probably means when that term is up, Hertz will file bankruptcy.

But they could find money, they can negotiate longer terms. Live Nation is right now talking with everybody it owes money to and saying, "Hey, look, can we push this back a year? We'll give you another couple of percentage points," whatever it is. That's not great for the company, but it's probably manageable, because even if you have debt that's at the top of the structure, you don't want to see a company go out of business at a time period where all the people who would normally buy Live Nation probably aren't interested right now. You know, Disney does not have the cash to buy Live Nation right now. AEG is in the same boat as Live Nation, they're not going to buy their competitor; I know that's not a publicly traded company but my brother used to work there, so it's in my head.

All of these companies that are cash-rich, they're not going to come to the rescue right now. So, I think there's going to be a lot more people holding the debt, willing to say, like, "Geesh! my best scenario to get paid is to wait."

Flippen: Yeah. That makes promising value for a lot of the debt holders, but not for equity-holders, which is great, because it probably means they're not going to declare bankruptcy, right? [laughs] But still, not great.

Kline: Yeah. There are likely to be dilutive actions in all of these cases.

Flippen: Exactly. Well, also, I say in the same vein, not really in the same vein, [laughs] but from that same MarketWatch report that I mentioned earlier, they had an interesting stat. They said that 30% of restaurants that are tracked by S&P Global have had credit ratings that indicate they have at least a 50% chance of defaulting on their debts. So, obviously, we talked a lot about the restaurant industry in that being an industry that's challenged, but one company in particular I want to talk about, and that's Texas Roadhouse. Texas Roadhouse, throughout all of this, has really been pretty steadfast in their operations, but how long do you think they can go on like this before it really starts to have a significant financial impact?

Kline: Yeah, I don't think Texas Roadhouse has done a particularly good job during this. So, we go to Texas Roadhouse, they have my email, we also go to one of their competitors, Smokey Bones, which is a more barbecue-based chain. Smokey Bones emails me every day with a different offer, we're doing uncooked family packs, we're doing cooked feasts, where I haven't heard once from Texas Roadhouse. I don't see Texas Roadhouse on any of the delivery services. They are doing pickup, I believe, but they are a relatively low-priced steak. And maybe other people are getting their marketing, maybe I'm not, it doesn't feel to me, and I'm looking avidly for places to eat, it doesn't feel to me like they're doing a good enough job saying, "Hey, we're still here."

BJ's is another one, a publicly traded company, that they're struggling, they might go bankrupt, but they're pulling every lever they possibly can. Like, when you drive by the BJ's near me, there is a giant hand-painted sign saying we're open. And that's a pretty good location, because they are next to a Starbucks that's doing blockbuster business right now with really long lines, so you're going to see that they're open.

Texas Roadhouse, it just doesn't seem like that well-run a company. I know people are big fans, we get asked about it on Fool Live all the time. You know, I go back to the tone-deaf still putting peanuts on all the tables, like, that just seems crazy to me in this day and age.

So, I don't know, sometimes -- and I haven't done a deep dive in this company -- sometimes when something like this happens, it shakes out how well a company is managed. And I'm not entirely sure Texas Roadhouse doesn't maybe need to make some changes.

Flippen: Yeah, I think my deep dive into Texas Roadhouse may just be me ordering a bunch of steaks from the local Texas Roadhouse and claiming research expenses. [laughs]

Kline: Emily, I will join you on that episode and I would like, when I try to put that bill in, to see how that goes. [laughs]

Flippen: [laughs] Something tells me that Motley Fool would not bite on that expense. It's interesting you say that you don't trust the management, though, because I think the reason why Texas Roadhouse has gotten some good press during this pandemic is because their CEO, Kent Taylor, said that he was going to forego, pretty early on, his salary and bonus throughout the rest of 2020. And they've been pretty good about raising debt to help, you know, granted debt never a wonderful thing, but during this pandemic, rather understandable. And has historically maybe not the best when it comes to communicating with customers, clearly, but it's historically been a well-run franchise with, we talk a lot about sales per square foot in the retail space, and with really impressive sales per square foot when businesses are [...] to normal.

Kline: Yeah. I mean, look, this has been a very successful company. And I admit I'm putting too much weight on, again, just the weird operational choice to put a deadly allergen on all of its table, like, this would be like my restaurant idea where as you sit down and you're served, I say, "Oh, by the way, there is a poisonous snake just walking around." You know, it seems like a poor choice, but I am probably overstating that because clearly customers like it and don't care. So, this just could be an unfortunate -- look, they might be at a price point that doesn't make them that attractive to takeout.

Like, I mentioned earlier, for Mother's Day we ordered from Morton's. I also, from Morton's, got hamburgers to make tonight. So, we got our cooked food. We also got a pack with raw food, it came with three hamburgers, it came with the buns, it didn't come with bacon or cheese, that would've been nice, but we have those things. So, I would like to see -- and maybe they're doing it, it's just, as someone who has spent a lot of time looking, and there is a Texas Roadhouse pretty close to us, and we get delivery from much farther away, it seems weird to me that they're not showing up as a choice.

Flippen: Yeah, and maybe I just like playing the contrarian too much, that's the debater inside me. Whenever someone gives me an opinion, [laughs] I like to play devil's advocate there. And, Dan, we have a long list of companies. I really just jotted down spit-balling about companies that I liked that could be threatened during this pandemic. We probably won't have time to get through all of them, but is there anything on that list that you feel particularly compelled to talk about?

Kline: Yeah. So, you put Bed Bath & Beyond on this list. Bed Bath & Beyond was going to go bankrupt anyway or at least was at a strong risk for it. Bed Bath & Beyond has to figure out what it is. I hate to say this, but they leaned too much into the beyond. I'm not sure, the same store I buy my bedding and my bath towel needs to sell me Mike and Ike's, like, there's a lot of weird stuff.

They also don't promote very well; we've talked about this before. Bed Bath & Beyond has the best sample size section of any store. It's massive; it's, like, 4X what they have at Target. I've never seen them once mention that. That feels like it will be a draw to get people in the store. Look, they were doing a lot of things, they were closing stores, they were making changes, this is not going to help them, they were already in sort of a bad position.

The other one you mentioned on here, Planet Fitness. I have a question, did they stop taking membership money during this while they are closed, were they obligated to do that?

Flippen: Yeah. I'm not sure if they were obligated to do that, but it's my impression that they had stopped billing their members because they weren't able to provide the service, which by the way, puts them in a very different position than a lot of other [laughs] gyms. I think it was LA Fitness who recently came under fire from members for not canceling their payment. So, Planet Fitness has at least been on the right side of history in that regard.

Kline: So, it's one of those scenarios where I know that, like, I'm still seeing my trainer, we've talked about this, we're doing social distancing workouts, we meet outside at my house in sort of, like a park area that's in front of my house. We have a little bit of equipment, they're not great workouts. I try to still do my three times a week, but our schedules, as you know, are absolutely brutal. I pay him for three times a week whether I do it or not. And I've just said what we'll do is, when this is all over and we can get back to the gym, we'll do a few four times a week to make up the sessions I've missed.

If I was a Planet Fitness member and went there regularly, I would want them to ask me, would you like to keep paying? Because for the $10 or $20, depending on if you have a one gym or all gym membership, I know I would keep paying, because if you go to a gym, you know the people who work there, you know as long as they try to pay employees, I think a lot of people would voluntarily keep paying that money. It's something like, you know, the people who pushback, "Well, ESPN doesn't have all this programming, like, I should get $4 back on my cable bill." I don't know, I'd rather like that my buddy who's a producer for E:60 doesn't get fired, you know? [laughs]

So, I think when it's little sums of money, but yeah, they're in trouble. That said, their biggest expense is likely rent. And not too many landlords are going to want to lose a Planet Fitness. That eats up a lot of space. And the second this is over, they go back to charging everybody. So, I would assume they can get rent forbearance and other deals worked out and don't go bankrupt, because gyms are starting to reopen. And just because it's going to be unpleasant, most people who are members of Planet Fitness don't go anyway. [laughs] So, you know, they are not going to be, be hurting for revenue probably pretty quickly.

I think gyms open here, on a very limited basis, next week. I know you can get a haircut starting this week. I don't know if you can get an appointment. And I'm in South Florida where the rule of science doesn't necessarily apply. Things are still very much closed where you are, right?

Flippen: Yes. At least for the time being. And I like you talking about the rents and the fact that a lot of these malls -- and I'd say malls maybe not the right word, strip centers, don't want to lose a lot of these big companies like Planet 13 [Planet Fitness] (sic) that are really the drivers of foot traffic to the area.

But in that same vein, let's maybe think about another company I have on this list, that again, I'm a big fan of, but it's struggling right now. And that's Ulta Beauty. Now, Ulta, a lot of people will be saying, "What are you talking about, there's no long-term debt?" Yes. I love that about Ulta, they have no long-term debt, but they do have a ton of net debt from their leases. Do you think Ulta Beauty is given the same leniency for their leases as Planet Fitness?

Kline: Yeah, absolutely, because Ulta Beauty, I often say this, they're not ever in the best plaza, but they're never in the worst plaza. The one near me in Orlando, it isn't right next to the Target, it's the next plaza over, but it's still kind of the same parking lot. So, like, they have real estate where they are often the anchor tenant and their stores are very distinctive looking. So, if you -- look, if I'm a landlord and I could say, OK, I can have them default, kick them out and it might take me two years to refill the space or I may have to knock it down and build condos, or I understand that people are going to want, you know, value-based makeup after this is over and Ulta is going to be in a good position to recover, I'm going to Ulta and saying, "Okay, don't pay me rent for three months if you can't afford it. And we'll tack that on, in your three, four and five of your leases your costs are going to go up and we'll make that money up.

I think there's deals to be made here, because the last thing you want, there's going to be a lot of open retail space, you are not going to want to kick out a company that will probably be viable after this. So, you will see if a landlord -- you know, I know here there was a property that Dick's wanted, I don't know if they still want it, that was a Sears. And they were trying to get one floor. It was a really complicated negotiation. The city had to sign off on it. If Dick's wants that location now, I'm sure Sears would hand it over to them, but for the most part, unless there's a tenant you want to get out, any landlord is going to have to be really, really understanding.

Flippen: Yeah, their hands are really tied like a lot of retail companies in this scenario. And maybe we'll have time to touch on the last company we have on this list and it's a company that is not going to be controversial, we've talked a lot about it, Dan, and that's Home Depot.

And Home Depot, their stores are still open amid all of this, but let's be honest, if people start declaring bankruptcy, [laughs] I'm not sure if home improvements are really going to be the thing they're focused on first.

Kline: So, their stores are booming at the moment, because, one, they do sell a lot of things that would be considered necessary supplies; they sell some cleaning supplies, they sell trash bags. A lot of people are doing things like cleaning out the garage, so you're buying your contractor bags. And things still break, people are buying extra freezers, you know, and Home Depot sells those. And things break.

The last store I was in was a Home Depot, it was about seven weeks ago. I've gone to plenty of drive-thrus but I haven't physically been in a store for, I think, about seven weeks. My sink was broken. And my contractor buddy came over and he looked at it and he tried a bunch of things and we couldn't get it. And I only had one plunger, he said, if you have two plungers, with everything we did snaking it, you could probably get enough pressure to clear it, that won't fix the problem, but at least your drain will work well enough that you can, like, make dinner.

So, I walked into a Home Depot, it was not crowded at all, I didn't even have to go to a human for checkout. I yelled to someone, you know, "Hey, where are the plungers?" They sent me in the right direction.

I think they'll be fine, because a lot of people are taking on DIY home improvement, and some of us are doing well. Like, I know, my contractor friend was hurting, I had him redo my bathroom at my other house; I'm not there. He had some other work he needed to finish for me there too. And you know, it wasn't a small amount of money, it was about $4,000, [laughs] and Home Depot or Lowe's got about $2,500 of that.

So, yeah, if this goes a year, if there's multiple instances, and maybe at some point people's money runs out, but a lot of people at the bottom end of the income scale or even the middle of the income scale, even if they're unemployed, they're furloughed and they're making more money on unemployment with the Federal backstop, the $600/week backstop. And they might be doing things like painting the living room and other stuff like that.

And, look, if your air conditioning breaks, you still need to fix your air conditioning. So, things would have to go really, really bad, really bad, like, you know, the murder horde that's learned to drive bad, for Home Depot to be in trouble.

Flippen: [laughs] Well, we'll see what happens when they report next quarter. I think Home Depot and Lowe's are reporting over the next couple of weeks, not to say that what happens next quarter really changes anything for either of these companies, but --

Kline: I actually think we booked the show to talk about. So, in a few weeks, I will either be totally wrong and I apologize to all of you in Fool nation here or my guess is the Home Depot numbers will be a lot like the Best Buy numbers, they're not great, you know, if it was a regular quarter, you'd be upset. But for this, I think they're going to be just fine. They're also hiring people, that's a pretty good sign.

Flippen: I tend to agree with you there. And I guess we will circle back in two weeks, we'll definitely talk before then, so it feels silly to say that, but we'll circle back on Industry Focus regarding Home Depot and Lowe's in a couple of weeks because that will definitely be a really interesting show to kind of look at those earnings and talk about those companies.

Kline: And, Emily, I will point out that if the many people listening to us, the tens and tens of thousands, maybe hundreds of thousands, I have no idea how big we've gotten as pandemic entertainment. If you want more of me and Emily, we are on Fool Live together on the weekends, occasionally during the week, Emily with other people, me with other people. If you subscribe to a Motley Fool service, any of them, you get access to see even more of us. You could see what we look like, that's better in Emily's case than mine.

Flippen: No, it's horrifying, [laughs] you should just stay listening to the podcast if that's the case.

Kline: [laughs] You could see Emily's cat, who often will make appearances during the show. So, you know, nobody told me to pitch the services, but it is a really exciting community on Fool Live, and people learning how to invest, people getting better at investing. And you know, I can say, I pay for some of our services, so that is, you know, as high a recommendation as I can give. And plus, who wouldn't want more of me and Emily?

Flippen: [laughs] Well, that's something we can agree about. And you know, listeners and maybe some subscribers out there, that will do it for this episode of Industry Focus.

As usual, if you have any questions, you can always reach out and shoot us an email at IndustryFocus@Fool.com or tweet us @MFIndustryFocus. For the people out there who are subscribed, you can also find us in the live chat, send us a Q&A.

But as always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against any of the stocks that we mentioned, so don't buy or sell anything based solely on what you hear.

Thanks to Austin Morgan for his work behind the screen today. For Dan Kline, I'm Emily Flippen, thanks for listening and Fool on!