WWD : Kering Group Revenue Falls 13 Percent in Q3, Confirming Luxury Slowdown

Kering Group Revenue Falls 13 Percent in Q3, Confirming Luxury Slowdown
On an underlying basis, group sales were down 9 percent to 4.46 billion euros, with Gucci falling 14 percent on a reported basis, and 7 percent underlying in the three-month period.

LONDON — Kering’s third-quarter revenue figures further confirmed the luxury slowdown, with group revenue falling 13 percent at reported exchange rates, and 9 percent on an underlying basis, to 4.46 billion euros.

The revenue figure dovetailed with forecasts from analysts, most of whom had already downgraded their expectations for the quarter and their share price targets for Kering.

Sales at Gucci, Kering’s largest brand, were down 14 percent on a reported basis and 7 percent underlying to 2.22 billion euros. Yves Saint Laurent fell 16 percent, and 12 percent underlying, and Bottega 13 percent, and 7 percent underlying.

Kering said its “other houses” division, which is home to brands including Balenciaga and Alexander McQueen, saw sales fall 19 percent on a reported basis, and 15 percent underlying.

François-Henri Pinault, chairman and chief executive officer of the French luxury group, said that beyond the challenging macroeconomic conditions and softening demand across the luxury industry, “the change in our revenue performance in the third quarter reflects the impact of our decisions to further elevate our brands and their distribution.”

He said the organization that Kering put in place in July “will enable us to strengthen the steering of our houses in the current market environment and to reclaim our positions and influence. With the acquisition of Creed completed last week, one of the world’s most distinguished high fragrance houses has joined our family, propelling our ambitions in beauty onto the next stage.”

Kering has been undergoing a raft of changes, restructuring management, acquiring luxury brands and reducing wholesale distribution in a bid to compete in a challenging and crowded market that has seen a cyclical slowdown in demand.

>>> Waste Mgmt beats by $0.02, misses on revs (154.63 -1.33)

Waste Mgmt beats by $0.02, misses on revs (154.63 -1.33)
  • Reports Q3 (Sep) earnings of $1.63 per share, excluding non-recurring items, $0.02 better than the FactSet Consensus of $1.61; revenues rose 2.4% year/year to $5.2 bln vs the $5.27 bln FactSet Consensus.
    • Core price for the third quarter of 2023 was 6.6% compared to 8.2% in the third quarter of 2022. Core price exceeded inflationary cost increases in the quarter by an estimated 100 basis points, contributing to margin and earnings growth.
    • Free cash flow of $612 mln, up 41.7% yr/yr.
  • The Company now expects sustainability growth capital spending of about $750 million in 2023. The decrease from prior expectations is based on a shift in the timing of spending across the next few quarters. As a result of lower anticipated capital spending, 2023 free cash flow is expected to be in the range of $1.825 and $1.925 billion.

>> Weatherford beats by $0.51, beats on revs; raises FY outlook (92.51 -0.32)

Weatherford beats by $0.51, beats on revs; raises FY outlook (92.51 -0.32)
  • Reports Q3 (Sep) earnings of $1.66 per share, excluding non-recurring items, $0.51 better than the FactSet Consensus of $1.15; revenues rose 3.1% year/year to $1.31 bln vs the $1.28 bln FactSet Consensus.
  • Girish Saligram, President and Chief Executive Officer, commented, "The first three quarters of 2023 are a springboard to close the year with strong momentum, as we expect revenues to continue to grow in the fourth quarter and we now expect full year adjusted EBITDA margins to expand over 400 basis points year-over-year, with adjusted free cash flow over $450 million."

>>> US Close Dow +0,62% S&P +0,73% Nasdaq +0,93% Russell +0,82%

Closing Stock Market Summary
The S&P 500 broke a five-day losing streak and closed above its 200-day moving average (4,236). All the major indices closed with gains, albeit off their highs, driven by broad based buying. Stocks hit an air pocket, though, around 11:00 a.m. ET and pulled back to session lows.

There was no specific catalyst to account for the mid-morning pullback that coincided with some mega caps dipping into negative territory. The Vanguard Mega Cap Growth ETF (MGK) was down fractionally at its low of the day, but closed with a 0.9% gain.

Many other stocks bounced back alongside mega caps. The Invesco S&P 500 Equal Weight ETF (RSP) closed with a 0.6% gain.

The overall positive bias was partially a function of recent weakness stirring a rebound mentality.

Participants were also digesting a slate of mostly better-than-expected earnings results from blue chip names. Verizon (VZ 34.30, +2.91, +9.3%), Coca-Cola (KO 55.64, +1.56, +2.9%), Dow (DOW 49.24, +1.00, +2.1%), RTX (RTX 78.38, +2.25, +7.2%), General Electric (GE 113.62, +6.93, +6.5%), and 3M (MMM 90.12, +4.52, +5.3%) were among the top performers in that respect.

Ten of the 11 S&P 500 sectors closed with a gain while the energy sector (-1.4%) settled in negative territory. The utilities (+2.8%) and communication services (+1.4%) sectors led the pack.

Bank stocks were a pocket of weakness today related to lingering concerns about credit quality, deposit costs, and weakening loan demand. The SPDR S&P Regional Banking ETF (KRE) fell 0.6% and the SPDR S&P Bank ETF (KBE) fell 0.2%.

The 10-yr note yield settled unchanged from yesterday at 4.84%. The 2-yr note yield rose four basis points to 5.10% following a $51 billion 2-yr note auction that was met with solid demand.

Today's economic data was limited to the preliminary October S&P Global US Services PMI, which climbed to 50.9 from 50.1, and Manufacturing PMI, which rose to 50.0 from 49.8.

  • Nasdaq Composite: +25.5% YTD
  • S&P 500: +10.6% YTD
  • Dow Jones Industrial Average: UNCH YTD
  • S&P Midcap 400: -1.9% YTD
  • Russell 2000: -4.6% YTD

Looking ahead to Wednesday, participants will receive the following economic data:
  • 7:00 ET: Weekly MBA Mortgage Index (prior -6.9%)
  • 10:00 ET: September New Home Sales (consensus 683,000; prior 675,000)
  • 10:30 ET: Weekly crude oil inventories (prior -4.49 mln)

Le Monde : Attaque du Hamas contre Israël : ce que les services de renseignement

Le Monde : Attaque du Hamas contre Israël : ce que les services de renseignement américains ont dit à leurs homologues européens
Selon le renseignement américain, le Hamas aurait été surpris par la lenteur de la réaction des forces de sécurité israéliennes à l’offensive de ses commandos armés.

L’attaque du Hamas contre Israël, le 7 octobre, n’a pas sidéré que les opinions publiques. Les responsables politiques, au pouvoir dans les pays proches d’Israël, ont également pris la mesure de leur ignorance de ce qui se tramait dans la bande de Gaza, point de départ des commandos terroristes. L’effet de surprise a été si grand et si déstabilisant pour le camp occidental, également confronté à des menaces islamistes sur son sol, que les Etats-Unis ont estimé nécessaire de fournir des éléments d’explication à leurs principaux alliés européens sur ce ratage majeur en matière de sécurité.

Le Monde a pu avoir connaissance, auprès de sources ayant requis l’anonymat, d’une partie de ce récit fait par Washington à ses partenaires britanniques, français et allemands. Il met en lumière les limites du renseignement israélien et américain sur le dossier Hamas et la part trop importante donnée à la surveillance technologique. Il atteste aussi que le Hamas, lui-même, n’imaginait pas que son opération puisse prendre une telle ampleur. Et il dément, enfin, l’existence d’une coorganisation de l’offensive du 7 octobre avec l’Iran et le Hezbollah libanais.

Le débriefing américain souligne, tout d’abord, que la branche politique du Hamas, dont les chefs se trouvent à Gaza mais aussi à l’étranger, notamment au Qatar, aurait « été tenue à l’écart de la préparation de l’attaque armée ». La branche militaire aurait été seule à la manœuvre. Or, les Américains indiquent que si le Shin Beth et le Mossad, les services de renseignement intérieur et extérieur israéliens, disposent de sources humaines au sein de ce mouvement radical, ces dernières se trouveraient essentiellement rattachées à sa branche politique.

Sécurité israélienne aveugle
L’appareil sécuritaire israélien serait ainsi resté aveugle sur les activités de la branche militaire du Hamas. Ce décryptage des événements du 7 octobre à l’attention des Européens n’interdit cependant pas que certains membres de la branche politique du Hamas, notamment à Gaza, aient pu être informés, en amont, à titre individuel. Il indique juste que les services de renseignement israéliens ne comptaient pas d’informateurs parmi eux et que les membres du mouvement islamiste qui auraient pu, malgré eux, par l’interception de leurs communications, fournir des informations, ont échappé aux filets du Shin Beth. Le strict cloisonnement entre les branches politique et militaire du Hamas serait l’une des clés de compréhension d’une opération ayant échappé à tous les radars.

a force du renseignement technologique israélien, grandement soutenu, en la matière, par les Etats-Unis, a également montré ses failles. Selon les éléments transmis aux Européens, même les puissants outils de surveillance américains orientés vers la bande de Gaza, un bout de territoire de 40 kilomètres de long et d’une largeur maximale de 12 kilomètres, n’ont pas été en mesure de capter des signaux avant-coureurs sur la préparation de l’attaque. La branche militaire du Hamas recourant, depuis longtemps, à des moyens de communication rudimentaires, mais efficaces, qui permettent de déjouer les techniques d’interception les plus modernes.

L’attention du renseignement israélien aurait également été amoindrie par les choix tactiques et les priorités du pouvoir politique. Le front de Gaza a ainsi été dégarni, une part importante des forces armées ayant été relocalisées en Cisjordanie, théâtre depuis un an et demi d’une insurrection armée rampante. Le Shin Beth a été prié de concentrer ses efforts sur la sécurité des colonies juives et non plus sur l’enclave côtière, d’où allait survenir le danger. Un choix dont les conséquences ont pu, à certains égards, surprendre le Hamas lui-même.

Pas d’aide extérieure
C’est l’autre grande leçon tirée par les Américains de cette attaque, selon le compte rendu qu’ils en ont fait aux Européens. Le Hamas aurait été surpris par l’absence de réaction des forces de sécurité israéliennes ou, tout du moins, par le temps qu’il leur a fallu pour répondre à l’intrusion de ses commandos armés. Il ne pensait pas pouvoir rester aussi longtemps sur le territoire israélien et prendre autant d’otages avant d’être refoulé vers Gaza. Les assaillants du Hamas ont pu, pendant des heures, sans être inquiétés, semer la terreur dans des kibboutz situés à plusieurs kilomètres de leur base.

De même, d’après les informations américaines, confortées par des échanges bilatéraux entre services israéliens et européens, l’aveuglement du renseignement sur l’attaque du 7 octobre tiendrait au fait que cette dernière n’avait pas, initialement, l’ambition qu’on lui accorde aujourd’hui, au regard des massacres de civils qui ont été perpétrés. La logistique et l’organisation de l’attaque seraient restées l’œuvre d’un tout petit comité, de quoi encore limiter les risques de fuites. Les services égyptiens, à qui les Américains prêtent un réseau d’informateurs efficaces à Gaza, n’auraient pas, non plus, identifié la menace. Une affirmation américaine que certains pays européens ont néanmoins accueillie avec réserve.

Enfin, sondés sur l’existence d’une préparation concertée, en amont, avec des cadres du Hezbollah et du régime iranien, lors de réunions organisées au Liban, les Américains, comme le renseignement français, ont démenti que le Hamas ait bénéficié d’une aide extérieure. Mais la question du soutien au Hamas demeure une question sensible car elle porte en elle le risque d’un embrasement régional. Les agences de renseignement, comme les gouvernements, semblent, pour l’heure, désireuses de tout faire pour contrecarrer un tel scénario.

Selon un témoin de ce partage d’informations avec les Américains, une forme d’inquiétude subsiste aujourd’hui parmi les services de renseignement européens. Car si les Israéliens, connus dans le monde de l’espionnage pour leur expertise en matière de renseignement humain, ont ainsi failli, qu’en sera-t-il de leurs homologues européens s’ils doivent à leur tour affronter ce type de menace ?

Davantage qu’un tableau forcément précis de la réalité de l’attaque du 7 octobre, cet échange d’informations donne un aperçu de la manière dont cet événement est appréhendé au sein des services de renseignements occidentaux. Il convient toutefois de garder à l’esprit que ce genre d’exercice, entre agences d’espionnage, est rarement dénué de calculs. Si les Occidentaux ont construit, sur le terrain du terrorisme, notamment depuis les attentats du 11 septembre 2001, une étroite et sincère collaboration avec les Etats-Unis, ils savent aussi que les intérêts de chaque pays sont distincts quand les enjeux deviennent plus politiques.

The Information : Boring Co. Shares Rise Over 22% in Employee Share Sale

Boring Co. Shares Rise Over 22% in Employee Share Sale

Elon Musk’s The Boring Company has sold shares owned by employees and investors at a price over 22% higher than in a funding round for the tunneling startup last year, according to two people familiar with the matter. The most recent price gives the startup an implied valuation of over $7 billion and suggests investors have faith that the company’s prospects have improved, despite setbacks in key projects.

The sale priced shares at around $24 each, the two people said. That’s up from roughly $19 per employee share when Sequoia Capital and Vy Capital led the company’s $675 million Series C, announced in April 2022, which valued it at $5.675 billion. According to one of the people, The Boring Company told shareholders that investors could buy up to $20 million in secondary shares as part of the recent share sales, known as a tender offer.

THE TAKEAWAY
• The Boring Company shares were valued at over 22% more than last year
• Investors could buy up to $20 million in secondary shares in the tender offer
• The Boring Company projects haven’t gotten much traction outside Las Vegas
Tender offers typically allow existing shareholders to sell some of their holdings in a company, without raising new capital for the company. It’s not clear whether the company has issued more shares since the last funding round, which would affect its total valuation.

Representatives of The Boring Company didn’t respond to requests for comment.

The double-digit increase in The Boring Company’s valuation is impressive considering the company has yet demonstrated it has much of a business. Musk founded The Boring Company in 2016 with a goal of solving traffic by building tunnels faster and cheaper than can be accomplished with conventional equipment. The company has created a tunneling machine called Prufrock that it says is designed to bore a mile-long tunnel in a week.

But despite several high-profile negotiations for tunnel projects with cities in California and Florida, the only Boring Company project that has gotten any traction is in Las Vegas, where it dug a 1.7 mile tunnel under the Las Vegas Convention Center. That loop, which shuttles people between three stops using Tesla cars made by the Musk-led electric vehicle maker, opened in 2021.


The company, which is led by longtime Musk associate Steve Davis, has also announced plans to expand the Las Vegas loop to 29 miles and 51 stations.

FT : CAB Payments shares plunge 74% three months after London IPO

CAB Payments shares plunge 74% three months after London IPO
Payment transfer group warns on profits and says changes in key currency markets have dented volumes

Shares in CAB Payments plunged as much as 74 per cent on Tuesday after the fintech warned on profits just months after a London listing that was hailed as a rare bright spot for the struggling UK market.

The company, which says it specialises in helping businesses make payments to “hard-to-reach markets” and has more than 490 customers, slashed its forecast for revenues this year by 17 per cent.

Changes to market conditions in African currencies, notably the Nigerian naira, the central African franc and the west African franc, have hit profit margins and volumes, said CAB. It added that its revenue projections for next year would be in peril if the picture failed to improve.

Analysts at Canaccord Genuity said it now “appears difficult to forecast future revenues with any degree of certainty”, helping to trigger the brutal sell-off.

Shares in CAB tumbled as much as 74 per cent to 55.6p, reducing the group’s market capitalisation to £160mn — down from the £851mn valuation it secured at its July flotation.

The warning from CAB comes six weeks after the group reported third-quarter revenues up 10 per cent. Canaccord analysts put the rapid deterioration since then to central banks tightening liquidity in the central African franc and making it harder for the likes of CAB to trade the west African franc.

CAB’s chief executive Bhairav Trivedi told the Financial Times that the intervention by central banks was “outside management’s control” and could not have been foreseen.


Coming a month after soda ash producer WE Soda pulled its proposed $7.5bn IPO, CAB’s listing was welcomed by a market that has been hit particularly hard by the global dearth of IPOs. Excluding those for blank-cheque vehicles, CAB’s IPO was London’s largest this year.

One banker said the collapse in CAB’s shares was “an absolute disaster” for a London market trying to sharpen its appeal to companies and wrestle more IPOs from New York.

Trivedi said he had no regrets over the London listing, adding that “it was the right thing to do”. He declined to comment on the share price and said he had not considered resigning.

Africa-focused private equity group Helios Investment Partners is CAB’s largest shareholder with a 45 per cent stake, down from 72 per cent before it sold shares in the IPO. According to Bloomberg data, Fidelity Management and Research and BlackRock are the second- and third-largest shareholders, with 7.5 per cent and 6.4 per cent stakes respectively.

Helios declined to comment.

Faced with a sharp deterioration in its business, CAB said on Tuesday it would implement “cost-reduction measures and efficiencies” to cushion the impact on profits.

Gautam Pillai, analyst at Peel Hunt, described the warning as “significant” and said it was putting its estimates and recommendation on the shares under review. The broker had previously rated the company a “buy” and had a target share price of 475p.

CAB said it expected revenue in 2023 to be “at least 20 per cent” ahead of 2022 levels, but that forecast was 17 per cent below its previous guidance. Trivedi insisted the company still had a “robust sales pipeline” but said the tough market conditions were “going to last weeks, some months and some might last a while longer”.

FT : UK axes cap on bankers’ bonuses

UK axes cap on bankers’ bonuses
Move aimed at boosting City will abolish EU rule that limits payouts to twice base salary

The UK has said it will scrap a cap on bankers’ bonuses that was inherited from the EU as part of its post-Brexit push to boost the City of London.

The move follows a consultation this year on whether to abolish a 2014 rule limiting bonuses to twice base pay for employees of banks, building societies and investment firms.

The UK’s top financial regulators argued against the ban when it was introduced, and since leaving the EU the government has claimed its removal will increase the post-Brexit competitiveness of the City by making London a more attractive place for banks to base their staff. 

In a report on Tuesday, the Bank of England’s Prudential Regulation Authority, which carried out the consultation with the Financial Conduct Authority, said “a bonus cap is not routinely imposed in other leading international financial centres outside the EU”.

“The bonus cap has been identified as a factor in limiting labour mobility. The final policy . . . [removes] this barrier in the UK,” it said.

The changes would allow companies to reduce pay faster in economic downturns, making them safer from a financial stability perspective, the watchdog added.

In a separate statement, the FCA said the changes “should also help remove unintended consequences of the bonus cap”.

It cited “the growth in the proportion of the fixed component of total remuneration, which reduces a firm’s ability to adjust variable remuneration to absorb losses or for material poor performance or misconduct that subsequently comes to light”.

The new rules will take effect on October 31 and apply to this financial year and future ones.

Finance bosses privately gave a hesitant welcome to then chancellor Kwasi Kwarteng’s announcement last September that the UK would abolish the measure, fearing a public backlash. They originally opposed the bonus cap because it forced them to lift fixed pay to retain staff.

When the idea of scrapping the cap was mooted in June last year, Labour leader Sir Keir Starmer said the Conservatives’ plan amounted to “pay rises for bankers, pay cuts for district nurses”. But the opposition party has since embarked on a charm offensive to win the City over ahead of the general election expected next year.

Darren Jones MP, Labour’s shadow chief secretary to the Treasury, said: “Rishi Sunak is marking his anniversary of becoming prime minister by pushing ahead with Liz Truss’ plan to axe the cap on bankers’ bonuses. When Truss says jump, Sunak says how high.

“At a time when families are struggling with the cost of living and mortgages are rising, this decision tells you everything you need to know about the priorities of this out of touch Conservative government.”

HM Treasury said: “Decisions on remuneration in the banking sector are for the PRA as the independent statutory regulator.”

PRA chief executive Sam Woods said in September 2021 that the regulator had “never been a big fan of the bonus cap” since it reduced companies’ flexibility to cut costs during a downturn.

The change to the approach to implementation would also achieve the secondary PRA objective of facilitating effective competition as firms would be able to immediately apply the change, giving them more flexibility to share risk with employees.

But Paul Nowak, general secretary of the Trades Union Congress, the umbrella body for the UK labour movement, criticised the decision as “obscene”.

“At a time when millions up and down the country are struggling to make ends meet — this is an insult to working people,” he said, adding that the removal of the cap added to the case for “a national conversation about taxing wealth”.

The bonus cap was introduced in the EU to end the era of unlimited bonuses giving an incentive to finance workers to take huge risks, which was seen as a threat to financial stability in the wake of the 2008-09 financial crisis.

The UK has introduced other rules concerning pay to curb the threat to stability. These include requiring a percentage of bonuses to be paid out over a number of years, and allowing bonuses to be clawed back in cases of misconduct, poor individual performance and sometimes poor company performance.

After the removal of the bonus cap, UK regulators said they wanted firms to ensure fixed pay and bonuses were “appropriately balanced” and that no individual was “dependent exclusively on variable remuneration, or to an extent likely to encourage them to take risks outside the risk appetite of the firm”.

But Anne Sammon, partner at law firm Pinsent Masons, said there was a “risk associated with creating a two-tier workforce where new employees are paid lower salaries but with higher bonus potential”.

“Those who received increases to fixed pay when the bonus cap was introduced will be contractually entitled to those higher salaries and so will only give those up where they are offered some incentive to do so,” she added.

WSJ : Victor Wembanyama Is Here. The NBA’s Scorers Should Be Afraid.

Victor Wembanyama Is Here. The NBA’s Scorers Should Be Afraid.
The San Antonio Spurs’ super-rookie debuts Wednesday night against the Dallas Mavericks, and he’ll be at his most captivating when he doesn’t have the ball

When Victor Wembanyama steps onto a basketball court, its geometry changes. Vincent Collet, Wembanyama’s coach with Metropolitans 92 during his final season in France, has witnessed the phenomenon. An opposing team can choreograph the perfect sequence of screens and passes, springing a shooter into open air with the rim in his sights. Then Wembanyama—7-foot-4, with the arms of an even taller man and the quick stride of a smaller one—enters the frame.

“You think you are alone,” Collet said in a recent interview. “And then, he’s back.”

Wednesday night in San Antonio, when his Spurs play the Dallas Mavericks, the most anticipated rookie since LeBron James will log his first regular-season minutes in the NBA. Fans around the world will tune in to glimpse dazzling feats of scoring. Will he debut his signature running, one-footed 3-pointer? If he misses it, will he stretch out and slam home his own put-back dunk?

But the 19-year-old Wembanyama’s premier talent—and the one likeliest to transform the league he’s about to join—isn’t making shots. It’s stopping them.

The NBA welcomes Wembanyama amid a period of peak offense, with increasingly precise shooters spreading to more and more distant sectors of the floor. According to Stats Perform, the four most efficient scoring campaigns in league history, on a per-possession basis, have come in the last four seasons, with a record of 114.1 points per 100 possessions set in 2022-23.

This isn’t, in league circles, an entirely happy development. Defensive-minded coaches fret over a version of the sport lacking balance, in which scorers have simply evolved past the capabilities of those tasked with checking them. If “space” is the watchword of the Stephen Curry era, players large and nimble enough to clog it are more needed than they’ve ever been.

“The movement demands required in today’s basketball are so different than what they were 20 years ago,” said Ben Taylor, a cognitive scientist who has spent a career studying the evolution of the game’s strategies. Back then, drivers bore down on the rim, and centers camped in the lane to barricade it. In the 2020s, big men have to sprint past the 3-point arc to dissuade snipers and back to the basket to break up alley-oop lobs, often making multiple round trips during a single loop of the shot clock.

The athlete capable of carrying out the updated job description is rare. Minnesota Timberwolves center Rudy Gobert, 7-foot-1, has averaged more than two blocks per game over a 10-year career, but speedy guards can get around him. The Golden State Warriors’ Draymond Green may be the most respected defender of his generation, a blur of anticipatory action, but he’s only 6-foot-6.

“It’s the combination of that physical attribute, the length, plus having mobility and awareness,” Taylor said. “What you want are possessions where you’re just like, ‘This guy’s everywhere! How is he doing this?’”

With Metropolitans 92, Collet encouraged his pupil to dictate instead of react. Wembanyama learned to bait traps for players charging at him, feinting one direction only to step in another. Teams commonly “funnel” a scorer to a second defender lying in wait; Wembanyama was so wide and well-schooled that he could funnel opponents to himself. His last season in France’s LNB Pro A, he blocked three shots per game, nearly double the average of the second-place finisher.

“He has fun denying whatever the ballhandler wants to do,” Collet said. “He likes the control.”

Wembanyama’s highlight reel from the Spurs’ preseason suggests the scope of that control. He unfurls a banner of an arm—his wingspan is a reported 8 feet—to flick away a 3-pointer. He reaches from a blind spot to swipe a steal and race the other way for a jam. In a three-second sequence spanning half the playing surface, he chases a shooter from the arc, tails him to the backboard and, with a palm almost as wide as a basketball, smothers a lay-up attempt. Over four preseason contests, Wembanyama averaged 4.7 blocks per 36 minutes—a rate that would have led the NBA last year.

“There’s nobody else in the league who can do some of the stuff that he can do,” said Spurs guard Devin Vassell. He wondered how Gregg Popovich, San Antonio’s Hall-of-Fame head coach, might deploy Wembanyama—as a roving presence, a back-line firewall, or both. “I don’t think he realizes how much he’s going to be able to help us out.”

The early stages of a basketball career consist of hype cycles and reality checks, and Wembanyama will inevitably struggle to match standards of pace and force. He’s skinny enough to present a ripe target to dunkers.

“They’ll welcome him to the league the right way,” Collet said with a laugh.

There is a more serious threat than embarrassment. Joining Wembanyama in this year’s rookie class is fellow beanpole Chet Holmgren, a 7-foot-1 former Gonzaga Bulldog who was selected second in the 2022 NBA draft. His first season was postponed by a Lisfranc injury to his foot, sustained after James—4 inches shorter than Holmgren but 55 pounds heavier—collided with him in a pro-am game. Wembanyama, who weighs 210 pounds, has adopted a regimen of strength training and stretching designed to keep his distinctive body intact; it remains to be seen whether such methods will hold up to the damage inflicted by Giannis Antetokounmpo.

Talk of Wembanyama’s fragility echoes the concerns that followed Curry during his early professional years. Observers worried that the guard was too slight to stand up to the rigors of an 82-game season, that he would get shoved out of anything more than a specialist’s role. In time, of course, Curry reoriented the sport, proving that a new-school mastery of angle and distance could outdo old-school muscle.

Wembanyama brings the potential for a similar shift—a catching-up to Curry’s offensive revolution, on its own terms. There is precedent for basketball’s defensive future in its history. Taylor cited Bill Russell’s book “Russell Rules,” in which the 11-time Celtics champion wrote of flummoxing rivals like Wilt Chamberlain using the “horizontal game.”

“I could run the floor, move laterally, block shots, put the ball on the floor, play defense as strongly away from the basket as I did near it,” Russell wrote. His mobility let him “determine where the ball was and where it was going.”

The difference, in Wembanyama’s case, is the shape of the body animating the ethos. Hustle and foresight alone cannot, as Wembanyama’s legs can, collapse the space between the sideline and the rim.

“He takes two steps and covers 25 feet, and you’re like, ‘Wait a second,’” Taylor said. “‘That actually doesn’t make human sense.’”