Happy Scribe Logo

Transcript

Proofread by 0 readers
Proofread
[00:00:01]

This is Nick, this is Jack, and this is Snax Daily, it is Thursday, August twenty seventh. Nick, you look fantastic and so do the stock market right back at you, Jack. It's a way for the market and for snacks daily for our first story. If college campuses were actually open, they'd be crawling with Urban Outfitters outfitted students in like denim t shirts. Everbright doesn't make those yet. They're going to start making them now, Jack.

[00:00:24]

No urban stock just jumped 19 percent yesterday because it's a fashion smoothie with a scoop of innovation. Just a hint. Second story, Jack, what do we got? Casper Mattresses is the former unicorn that fell asleep hasn't gotten up yet post IPO. Life hasn't been good for Casper, but it just hired a new CFO with a surprising plan. Wake up for this. For our third and final story today, I followed up with TPG about the offer.

[00:00:46]

I had a phone call with my top client. I fixed a glitch in another client's account statement. But did you put it in Salesforce?

[00:00:53]

No, but I wrote a lot of notes. Salesforce is the newest member of the Dow Jones Industrial Average. So we're looking at its newest earnings report now.

[00:01:04]

Snackers, before we jump into that wonderful mix of stories, we're also jumping back into the hoarder's almanac. Remember the hoarder's almanac, the shortage of things caused by this bizarre shelter in place. Don't go out and see your friend's situation and are flipping back through the pages here.

[00:01:19]

Let's go to week one. The big thing that was haunted was on shockingly hand sanitizer. Week two was toilet paper. Week eight was baking. This week, 12 was buycks. Now we're in week ten thousand and forty two. And it's going to be let's look at this. Lavender jacket's lovely. Lavender, lavender. Technically, Nick, it's week twenty four since the March 15th National Declaration of Emergency was announced. But this week it's lavender. Smells like a combination of a country field and a grandparent that's lavender snackers.

[00:01:48]

Lavender syrup and lavender oil sales are quadrupling during this pandemic. Apparently, people are putting it in hand sanitizers. So those sanitizers smell less like laboratories. Others are sending sprigs of lavender to friends in the mail because that feels like a vaguely wholesome thing to do to show some kinship.

[00:02:04]

Some say it helps with sleep like the ambiance of the garden. Now, fun fact that's not so fun. Back in sixteen fifty, the city of London was being ravaged by a great plague, brutal year. And back then doctors were putting lavender in their masks to ward off disease jaconi I checked out.

[00:02:20]

And today there is literally no evidence that that helps with anything. Medical Nick and I are not hydroxy chloro quitting you into this one. Don't try it out at all.

[00:02:29]

We're not lawyers, but we definitely don't think you should rub lavender on anything that is injured.

[00:02:33]

Snackers Week twenty four Horder Almanac's. What's going to be week twenty five. Tweet us at Robinett Snax.

[00:02:39]

Let's hit our three stories. You tune in this next day. He spoke to the lawyers and we got to get some legal out of the way about the way food is candy. They don't reflect the views of her family. It's all informational. Just so you know, we're not recommending any securities. Nope. It's not a research report or investment advice, not an offer of a sale of a security.

[00:03:01]

What's next is digestible business for You Financially LLC member Fagbug ABC for our first story, Urban Outfitters stock just jumped twenty one percent yesterday because it shockingly turned a profit in the current economy.

[00:03:17]

And Nick and I think urban stock is a fashion smoothie with a scoop of tech innovation tossed in that beautiful imageshack, by the way. Pull over, pull over. No, it's an Urban Outfitters cardigan, but thanks for noticing. Boho chic fashion retailer, Urban Outfitters, they're reporting earnings. We know what you're thinking. It's what everyone's thinking. It's probably going to be a bloodbath in its stores were all closed.

[00:03:39]

And even if its stores weren't closed, people don't care what they look like when they're zooming.

[00:03:44]

All understatement of the century. Tough market, by the way, to sell more ironic faux vintage V necks with an Aerosmith logo splattered all over the front.

[00:03:51]

But despite the odds against them, the Philadelphia based company just announced a thirty four million dollar profit for May, June and July. And then they built up like another surprise. On top of all that, each of Urban Outfitters brands was profitable last quarter. Its brands, of course, being Urban Outfitters, Anthropologie, not bad free people. We're talking like the Power Rangers when it comes to fashion.

[00:04:14]

Now, somehow, Urban Outfitters has managed to avoid what Jack and I like to call the old discounting death spiral of death.

[00:04:22]

A discounting death spiral is when you have one period of bad sales which can crush profits for the long term. It begins with like a splinter. You don't take care of the infection. Next thing you know, you're amputating a leg. Exactly.

[00:04:34]

Now, a weak sales quarter means built up extra inventory of clothing that you have to store somewhere in the back. Suddenly got a human sized stack of high waisted wide like jeans in the back of a place. And when you have extra inventory, a retail store is tempted to offer discounts on their inventory to clear it out and make up some room in the back so you can have next fall's like apparel coming boom. Next thing you know, you're putting out Facebook ads for 40 percent off that Janis Joplin style dress sunglasses combo only Urban Outfitters.

[00:05:02]

So you offer a discount one time, just for one season to clear out one batch of surplus inventory.

[00:05:08]

And that's when the death spiral begins. Customers come to expect discounts not just this season, though.

[00:05:15]

Every single season suddenly got permanent, 40 percent off everything situation. Jack, what happens then? Then you pull a J crew and you end up going bankrupt. No one wants to have J.Crew used as a verb against them. Let's just say that. So that's the context. And that's why we were looking at Urban Outfitters inventory line within their earnings report for the last quarter. And what ended up shocking Jaconi is that urban sales fell 16 percent last quarter and yet their inventory of unsold clothes didn't build up thanks to operational discipline.

[00:05:47]

Aggressive inventory actually declined by twenty one percent for Urban Outfitters, which is great for their profit prospects going forward all that December. Right, selling fewer clothes. So, Jack, what's the takeaway for our buddies over at Urban Outfitters? Urban Outfitters is a fashion smoothie with a scoop of technovation snackers. You get free people, you got Anthropologie, you got their Urban Outfitters brand. Those are its three core labels.

[00:06:10]

This is the blueberries, the banana and the mango. The standard big ingredients filling up most of Urban Outfitters stock smoothies. But then we're looking at a smoothie there.

[00:06:18]

A couple more ingredients in there. Case in point, there's a newly a giant scoop of almond butter heat into at Urban Outfitters stock newly is a subscription clothing rental. Eighty eight bucks a month gets you six items, whatever you want.

[00:06:30]

Yeah. You keep any of the six items you want using a discount, you can just return the rest newly is pretty much rent the runway. And its sales have doubled so far this year to eleven million dollars and it's owned by Urban Outfitters. Now, when Jack and I pop out, we notice that newly is only one percent of urban sales right now.

[00:06:45]

But this experimental division is a nice hedge for the future in case the whole fashion industry gets disrupted. For our second story, Jack software firm. All that matters is that I have two pillows, one for my head, one for my body.

[00:06:59]

Software firm Casper Mattress just snagged a new CFO with a single goal.

[00:07:06]

We noticed how to turn a profit in ten days. Matthew McConaughey. Kate Hudson feels like a sequel opportunity.

[00:07:14]

Jack McCullough, a snackers. We're talking mattress in a box pioneer Casper, the company that used to just have one mantra when they launched spend anything to get you on their mattress, literally spending everything open pocketbooks.

[00:07:29]

They spent one hundred million dollars a year on marketing for twenty sixteen to twenty twenty subway ads, podcast ads, Instagram ads about their podcast ads. And that apparently really pleased investors who gave it a one point, one billion dollar valuation.

[00:07:43]

If you bought a Casper mattress without inserting a promo code, what were you doing?

[00:07:48]

But that was as a private company, as a publicly traded company.

[00:07:51]

As of January this year, Kaspar's losing one hundred million dollars a year and the stock has plummeted and is now worth one third of what it was valued as. As a private company that tried to convert this to lifts, the calculator broke. We don't have that many decimals of precision.

[00:08:08]

So we noticed is going through a really interesting pivot right now. No more growth at all costs. Instead, focus on achieving profitability for the first time at all costs. So they're bringing in a new guy we just noticed yesterday. His name is Mike Monahan and he's the CFO. He was previously the CFO of a cannabis company and he's known by some as the Cupid of profit.

[00:08:31]

I maybe you, Jack and I, we just called him. That came up. We met up. Now, if you want to become a profitable company, it's actually a pretty straightforward operation. You got to do one of two things, increase revenues or cut costs or maybe. But now there is a third option. You can engage in fraud like our buddies over at Lukken Coffee did. This is Jack Neck and I still own stock of Lockette. But just like lavender medicine, Jack and I do not endorse fraud.

[00:08:56]

No, we do not. So increasing revenues and cut costs. Those are the two options to boost profitability. Classes two, three, six and fourteen. A business school for you right there.

[00:09:05]

Now, when a company hires a new CFO, it's a signal to investors and to the company that they want to do those two things fast. So we looked at what the ex CFO of Casper did and he already did like the cost cutting part. Yeah, the painful stuff. He laid off twenty percent of the workforce and he shut down the European expansion plan.

[00:09:22]

So the new CFO has a very specific focus by the process of elimination. Sell, sell, sell, sell, sell, sell, sell more mattresses to make more revenue. Jack and I were fascinated with how he's going to do this. It's very particular. Which leads to our take away. Jack, what's the takeaway for our buddies over at Casper? To become profitable, Casper is becoming less innovative snackers. Let's go back to twenty nineteen. Casper was doing like dog beds.

[00:09:46]

They were opening up knap stores. They were partnering with airlines. It was wild and crazy over that. Full disclosure here, River, the profit puppy of this podcast. Yes. Has a Casper dog bed and used to like she's sleeping right now.

[00:09:59]

And when Castro went public, they said they wanted to become the Nike asleep. They were even playing around with, like, KBD pills.

[00:10:05]

It was fun. That is a boatload of innovation and excitement and just discussed. But today, to increase sales, it's going to do the opposite of its direct to consumer disrupt things. Origins. Yeah. Here's what the new CFO is going to be doing. They just committed to sell more Casper mattresses, not just online, but just in Wal-Mart and Target stores.

[00:10:23]

They're also going to sell the mattresses in Ashley's home stores, Denver Mattress Company and Oklahoma's regional mattress chain, Mathis Brothers Furniture.

[00:10:33]

Who even knows how many brothers there are in that whole thing? They realized over at Casper that you can't fight human behavior. Most people want to touch and feel and lay down on a mattress before buying it.

[00:10:43]

You're either doing the squish test, which we've all done, or you're put in the wine glass on one side and bouncing on the bed. If I bounce a bowling ball in this mattress, will it spill my wine glass on the other side of the mattress and does it? Have to be red wine, it does, it has to be red wine snackers as a public company, Casper has sadly realized a new perspective to get to profitability, reverting back to the old school mattress ways it was trying to disrupt.

[00:11:08]

The more things change, the more they get the same.

[00:11:11]

For our third and final story, sales force just had its first ever five billion dollar quarter. So we're looking at what Salesforce actually does and really does get crazy.

[00:11:22]

Now, Salesforce also just got tapped for the unsecret, quasi elite 30 person club. It's called the Dow Jones Industrial Average, but you know it on the radio show as just the Dow. Now, the stock jumped because that's kind of a big deal. Benioff, Marc Benioff, the founder's mom, would be very proud of this to be part of the Dow.

[00:11:40]

Yeah, no big deal. I'm part of the thirty US heavyweight companies included in the Dow, but that was like two days ago.

[00:11:46]

And then yesterday, Salesforce, the stock surged twenty six percent after its earnings report because last quarter sales forces revenues were five billion dollars, which is double what it was just two years ago. Now, snackers year here, tech, you think San Francisco, but you really should be thinking Salesforce. Salesforce is tech in San Francisco. It's the biggest employer in the city. You're walking around, Somma, you are going to get smacked in the face by that cloud logo stitched onto like dozens of types of outdoor paraphernalia.

[00:12:14]

One reason sales force is so valuable is because its target addressable market is every business there is the LTA now DSL thing, snackers, or do you have customers who you need to support?

[00:12:27]

If you answered yes to either of those questions, Salesforce wants you paying monthly subscription for its software.

[00:12:33]

If you answered no on either of those questions, then you probably do not have a business. You're not going to very soon. If you don't have customers, you're not a business. Yeah, this is a problem. Now, as Rolodexes and business cards have disappeared, they've been replaced by Salesforce is ubiquitous customer relationship management software.

[00:12:51]

Now, one practical example. So you can really sink your teeth in and get Salesforce is think like five years ago. You're doing a sales visit to a propane part supplier over in Wichita, Kansas. You got a spiral notebook. You took notes about everything that was discussed. You exchanged business cards and you probably stuck a sticky note on the calendar in your cubicle for one month from now to follow up with a guy can write email one month from now.

[00:13:14]

Everything was great, really enjoyed the cheese.

[00:13:16]

Now, today, things are a little bit different. All of that information from that sales meeting in Wichita, Kansas, it goes into your corporate salesforce account. And because that account is cloud based, everyone in your company pretty much can see it, which is a benefit to the company. It's also a benefit to business continuity because let's say Timmy, the salesperson leaves the company, then your company still has all the information about that propane part supplier despite no more Timmy.

[00:13:43]

And instead of Timmy going after that propane deal in which because he's almost there, there's a warm lead waiting for your replacement to chase it as well. So, Jack, what's the fake takeaway for our buddies over at Salesforce? Salesforce is pretty much Dunder Mifflin Infinity, the software Ryan Howard was pushing on all the sales guys in the office. So, Jack, what's the real takeaway for our buddies over at Salesforce? Salesforce is CEO feels bad about how successful Salesforce has become snackers as companies have implemented these like discipline sales structures.

[00:14:14]

Salesforce has become enormous and work from home make Salesforce even more valuable because managers need to track what their workers are doing even when they're not there.

[00:14:25]

Yeah, they're like, hey, Timmy, is it in the office right now?

[00:14:26]

But I see he posted a call report at nine a.m. and five p.m. Convenient times to post call reports to prove that you're working day. I give me the benefit of the doubt. And now founder and CEO Marc Benioff did make a no layoff pledge in March. And they're keeping all these workers for like the past 90 days. He's a great philanthropist who wants, like the American economy in San Francisco to do well. But despite his guilty feeling right now, Marc Benioff company is officially a blue chip of the Dow and now it's worth a quarter trillion dollars.

[00:14:58]

Jack can whip up the takeaways for us over there. Urban Outfitters trifecta of boho clothing brands made a profit despite lower sales. They avoided the old discount death spiral, which ends in J.Crew bankruptcy for secondary.

[00:15:10]

Casper hasn't been sleeping well since IPO back in January.

[00:15:13]

Kind of go back to just old school mattress ways in search of profits for a third and final story. Sales force is becoming an essential software for every office.

[00:15:22]

It's joining the Dow, its profits are booming and its CEO feels bad about it. Now time for a snack fact of the day. This one tweeted in by Jaspreet Singh in lovely Santa Clara, California. If you were to stack Apple's two trillion dollar valuation and break it up into one hundred dollar bills, which should be nice, this stack would be one thousand three hundred and fifty seven miles tall of stacked one hundred dollar bills.

[00:15:47]

It's like the ultimate dividend. And that would be five times the height of the International Space Station. Apple is a valuable company. We use lifts as our. For a unit of measurement between Jack and I for market value, Jaspreet uses miles of stacked one hundred dollar bill. Must be nice, Jaspreet must be nice.

[00:16:05]

Now, before we go, stackers, congrats on the nine year anniversary to Sean and Nicole Wolfe over in Berlin, New Jersey and JUTAN print money.

[00:16:12]

Congrats on getting a new job over in Abu Dhabi. There we go. Happy birthday to Shelbie Kensley turn a twenty five boulder in Boulder, Colorado. District Attorney Jody Owens. Happy birthday in Jackson, Mississippi. Grandma Jade in Boston, Massachusetts, the Italian Luxembourg postal worker, Kyle Simmons. Happy birthday in Lewiston, Maine. Did you know Lewiston, Maine, was the host of a Muhammad Ali boxing match? Did not know that, but did know that.

[00:16:35]

Sarah Pennypacker also her birthday in Winston-Salem, North Carolina. Happy birthday, Jerry Gooby in Minneapolis, Minnesota, and Carson, Heider Scheidt in Dubuque, Iowa, and Ragan in Boise, Idaho. And mitigants Mickolus in Tewksbury, Massachusetts. And Camiel from Richmond, Virginia. And not a birthday here, but Jack White over in San Diego, California, started seeing TI Boy at the beginning of all his meetings. And now there is twenty five percent more attendance at all those meetings, according to it just Jacoway now snackers.

[00:17:05]

Just during the recording of this podcast, Nick and I can't help but see the push notifications. Big developments in Wisconsin, the latest place where an unarmed black man was shot by police. And then you go further south in the Gulf Coast, you got a Category four hurricane which is about to hit land, Nick. And I want to give a shout out to snackers in Texas, Louisiana and Arkansas and also snackers fighting for racial justice. We're thinking of you this part.

[00:17:27]

We can't wait to see you guys tomorrow. This is Nick and I own shares of Apple, the Robinhood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robinhood Financial LLC and does not reflect the views of Robinhood Markets Inc or any of its subsidiaries or affiliates. The podcast is for informational purposes only is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security.

[00:17:57]

The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC member, FINRA, SIPC.