Takeaways from Cannes: Don't forget about the power of the US consumer

At the Cannes Lions Festival, consumer executives from e.l.f. Beauty, Marriott, Gap, and Tapestry indicated that US consumers are feeling slightly better than in the first quarter and spending more briskly, despite AI-driven layoffs and rate hike fears. The insights suggest a steady consumer base as summer begins.

For each of the past four years, I've descended into a sunny, hot alternate reality in June. No, it's not actual hell. I am headed to heaven when it's all said and done. It's the Cannes Lions Festival of Creativity in the south of France. There are several hallmarks to this event, I've come to realize: - The event has seemingly grown each year and is finally attracting lots of public company CEOs. I've liked seeing this event morph into Davos-lite — it helps me get great insights into the economy and business trends. - Over-the-top displays of wealth are welcome, if not expected. One person I interviewed was sporting what I believe was a $500,000 watch. - Delicious food, when you have a rare moment to eat. And honestly, I found most of the food far cheaper than going out in New York City. - Lots of fake-it-till-you-make-it folks in attendance. This year, I caught up with a good number of consumer executives. There was so much AI talk on the ground, but lost in all the discussions was the fact that the US economy is powered by its consumers. Sure, it's great to see a Micron MU https://finance.yahoo.com/quote/MU/ earnings beat, but how many average people own the stock? I would much rather see Walmart WMT https://finance.yahoo.com/quote/WMT/ strike a bullish tone at an event, as that would be a key economic clue. This is an important moment for the US consumer. Gas prices have come down, but there are fresh fears of a rate hike. The economy is still creating jobs, but many big companies are conducting AI-driven mass layoffs. Here are a few reads on the US consumer as the summer shopping and travel season begins in earnest. They come from chats with the CEOs of e.l.f. Beauty ELF https://finance.yahoo.com/quote/ELF/ , Marriott MAR https://finance.yahoo.com/quote/MAR/ , Gap GAP https://finance.yahoo.com/quote/GAP/ , and Tapestry TPR https://finance.yahoo.com/quote/TPR/ . If I had to summarize their insights, it's that the consumer is feeling a little better than they did in the first quarter and spending a touch more briskly. e.l.f. Beauty CEO Tarang Amin "So we're currently doing some price discovery where we're taking certain items … down in price and seeing how they shoppers respond. We have a skin tint that's an incredible innovation that was priced at $18. We took it down to $14. And in the most recent weeks, we've seen almost an 85% lift in that item." Marriott CEO Anthony Capuano "We feel good about forward bookings on the Fourth of July. And even here in Europe, we see pretty solid bookings of inbound international. So we expect the summer to be strong." Gap CEO Richard Dickson "We've seen, I'd say, steady and consistent behavior from our consumer base. I would say, you know, with all the things happening in the world today, and to some extent all the uncertainty that we all deal with, the consumer's reaction is pretty steady."