Women in workplace, retailer earnings, summer travel: Top stories

Yahoo Finance Live discusses the rise of women in payroll jobs in the workforce, earnings from retail chains Abercrombie & Fitch and Urban Outfitters, and the price forecast for international travel costs ahead of the summer season.

Video transcript

- Stocks ending the trading day lower. You're looking at the Dow closing off 255 points. Let's take a look at some of the top trending stories of the day. There are a record number of women working. A big reversal than what we've been talking about after the pandemic triggered an exodus from the workforce.

Now the participation rate of women age 25 to 54 in the workforce, that climbed to nearly 78% in April. That's according to the Bureau of Labor statistics. We have Alexandra Canal, Josh Schafer, Pras Subramanian here to break down all of these top trending stories.

Ale, let me kick it over to you because when we talk about females in the workplace, a lot of the loss that we did see during the pandemic was because a lot of women had to leave in order to care for children, in order for elderly care. They weren't able to work and really go-- or I guess, allocate as much time as they needed to. I think that flexible work component that we're seeing now is somehow playing into this.

ALEXANDRA CANAL: 100%. I think the fact that we've moved into a more hybrid work environment, even in some cases a fully remote work environment, is critical for a lot of those women who initially left the workforce. I also think the fact that we have unemployment so low, a lot of job openings right now, higher wages, that's more of an opportunity for women to get back in there.

Also another factor, just basic necessity. Inflation is really high. The cost of rent, food, child care is high that you can no longer really require just one income in order to pay for all of that. So I think there's a multitude of reasons. But it is interesting to see this trend considering how many women did initially leave the workforce at the peak of COVID.

JOSH SCHAFER: Yeah, the drop off was pretty huge when you take a look at that chart that we were just showing of how many women weren't able to work. But I do think the biggest thing does have to be the fact that, like you said Ale, costs are higher now. Costs are higher, people need more incomes.

And the ability to basically work maybe not even full-time or work a full-time job, but at weird hours I think is advantageous for a lot of families too. You can work eight hours, but it doesn't have to necessarily be 9:00 to 5:00. You can go and do pickup or split with your partner and do things like that, and be able to manage it. And I think that that's something that has totally changed and probably will continue to benefit this moving forward.

PRAS SUBRAMANIAN: Yeah, I think that when we compare pre-pandemic to post-pandemic, is it really just a hybrid work situation? That's the biggest factor at play for that huge percentage of 77.5% people now in the workforce. Also you guys tell me about this, but women are going to college more, having getting higher degrees. The study mentioned lower fertility rates, people having children later or not at all. That would boost it I imagine, right?

- Yeah, certainly that does boost it. That certainly is a factor here that's in play. It also talks about childcare. Now I think a lot of women have returned to the workforce, clearly by the numbers. But it is still an issue when you talk about the lack of childcare, daycare centers not having the staff.

People aren't able to get their children into the daycare centers because of that. I think that is still keeping some women from the workforce. But still the fact that we are making progress, the fact that we are seeing participation at a record high, clearly moving in the right direction.

JOSH SCHAFER: It's a good sign for now, right? It's good. Things are headed in the right direction. But let's take a look at retail. I want to take a look at Abercrombie Fitch and Urban Outfitters, both reporting better than expected earnings today. So Abercrombie same store sales, up 3% this quarter compared to an estimated loss of 1%. The retailer also raising its guidance. Now Urban Outfitters, for its sake, total net sales for the quarter increasing nearly 6%.

Shares of both those retailers are trending up on the news. And, guys, this is, as we've seen, sort of questionable commentary and earnings from other consumer-facing brands and other retailers. When you take a look at what we heard from Walmart, they were warning of a trade down. Target, warning that there's been discretionary spending-- or declining discretionary spending.

Even when you look more in that clothing area and you take a look at Foot Locker and what happened there and Under Armor, really kind of a different story from Urban Outfitters and Abercrombie. I don't know if it is more people are going back to Abercrombie and Urban Outfitters. I'll defer to other people--

- At least one of those people.

JOSH SCHAFER: I'll defer to other people at the desk as far as where it's popular to shop. But it seems like that probably is part of the story.

ALEXANDRA CANAL: Yeah, and to me I have-- I'm a newfound fan of Abercrombie. I used to be when I was way young, then I fell off of it. But recently they have great bodysuits, they have great pants, and they have great workout outfits for those that are looking for that.

But I also think this is a story that speaks to the higher-end consumer. We were just talking about people buying Chanel and Birkin bags, certainly, they're going to be spending $40, $50 for a nice pair of high waisted jeans. So I think that is something that is going to continue and we're going to continue to see that.

That being said, though, UBS did have a no warning that there could be further downward pressure for some of these names, in particular Urban, especially in the back half of the year amid inflation. That that is eventually going to catch up to consumers. However, I'm not totally convinced of that argument since we have seen inflation moderating. But, again, we'll have to wait and see.

- To me, the Abercrombie turnaround story has just been fascinating because it was very popular with my generation. I'm a millennial. So many people shopped there, six, seventh, eighth grade, even the beginning of high school. And then you never heard about it, or at least I didn't hear about it for years. Now that same group, millennials, are the ones that are back in the stores.

And it's just been amazing how they have been able to totally rebrand. Get people who boycotted the stores so that they would never shop at Abercrombie, back into their store. And I think this really tells us a lot just about that nostalgia play, what we have seen work in the past. And Abercrombie is doing a very good job at really capitalizing on that. Not only that, but also just keeping that momentum going.

PRAS SUBRAMANIAN: I mean, Abercrombie used to be a disaster from a reputational point of view, with all the controversies there. The Mike Nichols-- what was his name? Mike--

- The former CEO?

PRAS SUBRAMANIAN: Yeah, yeah.

- I did watch that Netflix on it.

PRAS SUBRAMANIAN: Yeah, yeah, right, right, right. So they, sort of, like the nostalgia is back. I mean, I remember being like a little nervous walking there, it was like you smell the cologne and it's all dark and stuff.

ALEXANDRA CANAL: Experience.

PRAS SUBRAMANIAN: Yeah, yeah. But it was like you said, it's a nostalgia place. But it's also like the teen kind of spending patterns. We talk about urban Outfitters too, a lot of strength there. Abercrombie back, I believe it's teenagers and younger people who are shopping there. And I think that's showing that there's resilience there, that people want to spend.

Maybe they don't have to spend on food and shelter because maybe they're living at home or they're in college, so maybe it helps that that consumer can spend still right now without a concern about the recession, the economy, things like that. I can keep buying my t-shirt.

JOSH SCHAFER: It's an interesting point, right, perhaps when you think about different consumers that we're talking about. Someone that's shopping at Target and Walmart is probably also paying for insurance and paying for a new car and paying for groceries and paying for things like that. Someone that's buying a t-shirt at Urban Outfitters might just be a 17-year-old that wants a cool outfit and wants a $20 shirt.

And I think that's different when you think about wallet share and where people are spending, and how that translates to what we're seeing in the businesses. But it was interesting in that note that you were talking about, Ale, when you take a look at where apparel is, apparel right now is the one thing that consumers are opting out of the most. It is the most active thing that people are saying, you know what, I'll delay my apparel purchase. And so I think moving forward, you wonder when does that start to show in these results.

ALEXANDRA CANAL: Yeah, you would think soon. And one quick thing to note about Abercrombie is that if you go on their website, they actually give you recommendations for what to pair with certain pieces so that you can have a full outfit--

- We're still promoting Abercrombie. We're bringing it all back to why we shop there.

ALEXANDRA CANAL: Exactly. And look, you might need new clothes, maybe you're traveling this summer, because a lot of Americans are. A booming travel season is already upon us. If you take a look at heading into Memorial Day weekend, TSA is screening over two million passengers a day. That's on par with pre-pandemic levels.

And summer, it's expected to be busy. Travelers are likely to encounter long security lines and high prices. Airfare to Europe and Asia, they're already seeing their highest levels in more than five years, according to Hopper. Which really pains my soul since I want to go to Europe at some point. Hopper is saying that the most desired destinations are Paris, London, Rome, the three places I want to go.

But it's just interesting to see this travel boom which we've been seeing across the board. At the same time, though, we have major airlines like United and JetBlue, also trimming back the amount of flights that they're offering due to some of those pilot shortages, air traffic control shortages. So overall, an interesting time.

PRAS SUBRAMANIAN: It's funny you mention people are spending less on clothing and things like that. They're spending on experiences. They want to-- post-pandemic, I want to go somewhere. I want to spend time with my family. I want to see new things. I want to experience it. I don't need a new t-shirt or a suit or matching outfits or whatever you said before. But, yeah, I think that's a big part of it.

Like you said, airfare five year high for Asia and the EU. I mean, at this point it's like, who do you bet on for investors? Airlines, hotel chains. I mean, what do we do here? Is the experience? The booking holdings of the world? Are those the plays right now in this sort of world where people don't necessarily want to buy material things, they want to go out and do stuff. So car rental companies, there's a whole number of recreational plays out there for investors.

- And those names have been outperforming as we talk about more and more people wanting to travel. And we had it up on the screen, if we can put it back up there. Just how much people are spending to go on these international trips. When you take a look at Europe, the average price there $1,100. Comparing that to what it was not that long ago, $850 last year, $861 in 2019. That's a heck a lot of more money.

And then when you take into account some of the other places people are going, $1,800. This is in an environment when people are worried supposedly about a recession, looming fears just about what exactly that economic slowdown could potentially look like, sky high inflation. Yet people are still dishing out heck of a lot of bucks on travel.

JOSH SCHAFER: It gets back to the high-end consumer is clearly still spending here, right. Someone is spending money because people are buying those flights. And they would be cheaper if no one was buying them. That's how simple supply and demand works. But I do think another part of this, how do we get more air traffic controllers, those guys? We need to get more people there so they stop cutting these flights from New York and things can flow a little bit easier, you have more options.

I've found just looking online, there are certainly fewer options for flights. And then you feel a little bit pigeonholed in your travel, and the cost goes up. That seems like the biggest takeaway from that article to me. And the story is, how do you get more air traffic controllers so this can become an easier process?

PRAS SUBRAMANIAN: I mean, they can't work from home, right? They have to go to the little tower, so I guess that's one of the things. Can you work from home? I don't know.

- Yeah, and labor shortage, pilot shortage, obviously a number of headwinds. I don't have any cool vacations booked this year. Do you guys do for this summer? Anyone going to Europe? Did anyone--

JOSH SCHAFER: I'm not going to Europe.

ALEXANDRA CANAL: I want to go to Europe in the fall. That's my plan.

- I feel like Pras is holding his European trip back. There we go.

JOSH SCHAFER: I passed going to Europe trip because the flight was too expensive.

- Yeah, I would too. I'm not paying $1,100.

JOSH SCHAFER: $3,000 to fly to Greece from New York.

- Wow. And what? Like, this weekend?

JOSH SCHAFER: No. In August.

- OK. Well, that's a lot of money.

JOSH SCHAFER: I won't be there.

ALEXANDRA CANAL: Too much of the high season in the summer.

- Ale, Josh, and Pras, thanks so much for jumping on here for that.