The Best One Yet - 🚢 “3 cruise disasters. 3 months.” — Carnival’s stock drama. Aerie underwear surge. GM’s big car battery.

Episode Date: March 6, 2020

Carnival Cruises’ has a hat trick of profit-crushing drama — but we found the perfect analogy for the travel industry’s current coronavirus struggles. GM has whipped up a fresh electric car battery that goes 400 miles, but we’re looking at whether Americans even want electric cars to begin with. And underwear brand Aerie is carrying its parent company, American Eagle, on its back. #HYHYSDLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday, March 6th. Friday, March 6. Happy Friday, everybody. Nick, can I run down the last four Dow stock moves? Snackers, we've got some big numbers here up and down. Plus 5% Monday, minus 3% Tuesday, plus 5% Wednesday, minus 4% Thursday. Kind of feels like a cancel out situation. This is insane, but this Snacks Daily is definitely at least 10% better than yesterday. It happens to be our best one we've ever done. This is the best one yet. We're kicking it off with Carnival Cruises. Today. The stock is down because of another quarantined cruise liner.

But it's down further than you may actually realize. We found actually the perfect historical analogy for the travel industry's struggles right. Jack, second story, what do we got? General Motors just unveiled a new 400-mile electric car battery. If you bought the 300-mile or you're going to feel like an idiot. But Americans have never really shown that they actually want electric cars in the first place. If you build it, will they buy it? If you build it, will they come?

Good question to ask before you invest in the batteries. Third and final story, Airy is the subbrand of American Eagle. And it's basically like Karen, it's pairing on its back over here. It's like LeBron James in the fourth quarter. It's making moves to replace Victoria's secret. An American Eagle should just let it run free. But before we get into that, we've talked about hard seltzer, taking share of throat of Budweiser.

We've talked about how White Claw truly control 80% of the market, 60% of the market being White Claw. That is a shocker. White Claw is 60% of the heart. hard-seltzer market. Is the antitrust group with the government going to look into this or what? But we're noticing a total lack of innovation at White Claw. They're getting a little too comfortable in this dominant position. They're resting on their ruby grapefruits, you can say. There has been no new flavors in the past 16 months for White Claw. Pretty much you're getting

bored of cherry over there. I actually just got a Twitter poll. Like it was a sponsored ad. What's your favorite White Claw flavor? Snackers, whenever Jack and I do research on a story, three days later, we get a bunch of social media ads for like White Claw. Full story though, full disclosure. I actually think White Claw. Everything we're saying changed yesterday. Wondering if I'm going to get some hate for saying I think white claw is gross. White claw decided to listen to us and tweak a few things. They whipped up three new flavors.

Lemon, watermelon, and tangerine. Would it kill you guys to like, you know, push the comfort envelope a little bit and come out with hibiscus? It turns out their new flavors. They just looked at whatever were the most popular flavors for non-alcoholic, like, seltzer water. Not going to lie. I kind of love how efficient their marketing team is here.

But another thing we found interesting, variety packs. Get this, Snackers, 63% of all hard seltzer sales are variety packs of like a bunch of flavors. That makes sense because a lot of people are trying out hard seltzer for the first time, so you're not sure which flavor you like. You're a little curious. Your seltzer curious. But it also makes sense because Starbursts, Skittles, Jolly Rancher, they only come in variety packs too. And this is like the same thing but liquid and alcohol. Let's be honest, white-cloth drinkers.

You just want candy, you don't have to chew. Let's get to our three stories. Boom. snacks daily. Snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so you know.

We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, Jack, strawberry or banana daughey or banana daughey?

Benet. The answer's always a mix. Carnival cruises continues its epic losing streak with another coronavirus infected ship. Have you even been on a cruise ship? I haven't even been on a cruise ship.

I mean, here I am. I'm throwing basically these darts. I haven't even been on a cruise trip. Nana took the entire Kramer family on a Royal Caribbean trip. Oh my God. Best part? Yep.

Do it yourself soft serve vending machines. I can imagine one of your brothers like picking up Jack and putting his face right under that thing. I was 13. I could reach myself. There you go. Now the problem that is facing

Carnival cruises right now is not one disaster, not two disasters, no, it's a hat-trick trio of three disasters in three months. The first one was when two Carnival cruise ships collided in a port when they were like trying to back out of their parking space. Snack, as you've seen this meme, it's a three-minute-long train wreck. And everyone's like, whoa, whoa, whoa, whoa, stop, Jerry! It was just like a fender bender and a Trader Joe's parking line. Except they included millions of dollars of damage and took place over three minutes. The second disaster was the Diamond Princess. This was the cruise ship that was docked in Japan for like two weeks because coronavirus was on board and everyone was quarantined.

Literally there was an Australian couple. Get this. They were having drones drop off wine for them. Wow. You got to do. We got to do. Yeah, that's true. Third one came yesterday. There is another cruise line owned by Carnival Cruises. It's called the Princess Cruise. It's sitting in quarantine and waters outside of San Francisco. Can we see this thing, by the way? We got to get out of the studio. Good point. I haven't checked, but it's got coronavirus on board, so it's pretty freaky. The stock of Carnival Cruises fell 14% Thursday on this third development. Now, this has been really bad for Carnival, to say the least. The spring tourism season is all but canceled. Basically, they're spending spring break in their dorm room locking the doors. According to the Wall Street

Journal, industry-wide, cruises taking place on the Mediterranean Sea in Europe. Lovely place. They are 60% full, or as Wall Street's seeing it, 40% empty. Over in Japan, the cruise industry is basically grounded, or I guess docked. In the Caribbean, things are still looking okay. Yeah, let's just say, don't cough on board. Yeah, don't cough on board. Now, Carnival stock isn't just down 17% Thursday. It's down 46% since January 17th.

It's worth like half as much as it was two months ago. But here's the crazy thing. If you look at the way the industry is trending, Americans have been craving more and more cruises. Sales have risen 7% each year for Carnival Cruises since 2015. You got little Jack Kramer sticking their face. under the ice cream machines. And guess what? There's nothing the cruise company can do about it. The beautiful thing about a cruise, you book a ticket, and you don't have to decide anything.

The ice cream finds you. Basically, it's like a lifetime pass. Just do whatever you want. By the way, Snackers, when the economy's strong, people tend to buy swimsuits. So, Jack, what's the takeaway for our buddies and short shorts over at Cardival Cruises? There is a really close analogy to the current travel industry crisis. It's September 11th. Back then, Snackers, people were afraid to... to travel right after the terrorist attacks because of more terrorist attacks. This time, people are afraid to travel because of coronavirus.

Back in 2001, flights got canceled, profits of airlines got downgraded, and stocks fell. But fear of flying eventually faded in months and years after September 11th. That's because something like terrorism couldn't permanently end vacations and business travel. The same could happen here potentially. When you're looking for comfort or context in market movement snackers, look for analogies. For our second story, American Eagle, Just announced earnings, but it's really an Airy company. Not to be mistaken with Aries.

Nope. The horoscope. Or Aquarius, the other part of the horoscope. Or a Pisces was my birthday yesterday. Or anything with E's or A in it. No, ARI is the company. If you Google Brollet, yeah. Airy is the first thing that shows up on Google.

And that's because it's the sub-brand of American Eagle that's targeting teens. Erie was born in 2006. Under American Eagle. And now it has graduated. It's making its way in the real world. Now, Snack, because you're probably wondering, Okay, you got American Eagle. That's the brand everyone knows.

It's like Abercrombie's kind of awkward cousin. Its logo is a lot like Hollister. They're both like winged. Which kind of reminded us of Abercrombie. It's actually a vicious circle. We're going to find out one day they're actually all the same company. It's a tornado. They're all making clothes in the same place in Ohio.

But if you look closer at American Eagle's sales, overall American Eagle sales rose by 2% last quarter. Not much. But let's say you're part of the Snacks team and Jack and I jump in Snacks out of look closelyer. You see that Aaron's... Mary sales growth was 26% last quarter. And American Eagle's brand growth was only 3%.

Right, to clarify here. Actually, it fell 3%. Now, to clarify, American Eagle is both the brand and the parent company that includes Airy as well. Oh, and by the way, Airy has enjoyed 21 straight quarters of double-digit sales growth. Jeez, that is five years in a row. I mean, every quarter growing. Sit down and let that one sink in. How many brawlets is that?

It's a lot of brawlets. Now, how about the stores? Erie has gone from side hustle to full hustle at American Eagle. In the last year, American Eagle has, like, slowly added six new stores for itself. That's like one per ten states. Meanwhile, Airy had like three cups of coffee whipped up 33 new stores in the last year. There are now 150 Airy dedicated retail stores in the United States. Also, Jack and I whipped out the blueprints on these things.

Turns out they're, like, ideally and efficiently sized. stores, not these like big mall behemoths. They're half the size square footage-wise compared to a typical American Eagle, which is great because like urban stores are big these days, tinier stores. You're not in a shopping mall of America. No, they're basically the size of like one of those Auntie Ann's pretzel carts right now. The Airy brand is also flexing its media muscles with offline events. Not only offline events, this weekend they're hosting their first ever actual big summit in Brooklyn.

It's called the Airy Real Summit. It's actually called the Airy Real Summit. caps. Yeah, and it seems off brand. On the R-E-A-L. There can be a lot of high-wasted crop jeans going through Williamsburg's Lorham or L-Stop station.

If there are any snackers at the Airy Real event in Brooklyn, I would love a pick. So, hit us up at Robinson Snacks. By the way, Ariel, Airy-R-R-E-R-E-R-E-L, who had the first-ever brawlet made of those purple shelves.

Right. Scalps were the original brawet. Now, there are values involved in this event because it is an airbrush-free zone. Also, they're doing no catwalks at this thing like other lingerie brink. But they have inclusive brand supporters from all walks of life. Their models are non-models, which is so key.

You got the U.S. gold medal gymnast, Ali Reisman. You got actress Busy Phillips. And then you got a random CEO slash scientist going. Yeah, she actually sold her company to Chevron, no big deal. Ever heard of it? Now, this is different than the supermodels you get at Victoria's Secret. Very different strategy. So, Jack, what's the takeaway for our buddies over at American?

I'm sorry, I mean, at area. We are staring into the Victoria's Secret vacuum right now. Snackers, last month, we told you how L brands, the owner of Victoria's Secret, sold off Victoria's Secret to a private equity firm. Because it was struggling to connect with the new generation. Right, the new generation is focused on comfort over cleavage. We're digging inclusive events instead of winged lingerie shows on TV with catwalks. And that's why ARI is strategically positioned to take over Victoria's Secret's market share.

Think about it. 70 more ARI stores are covered. coming in 2020, according to American Eagle. And that means 220 total. But Victoria's Secret still has 1,100 stores. That's five times as many as Airy in the USA and Canada. So if you're Airy, you're looking at the situation, you've got room to grow. For our third and final story, General Motors is going all in on electric cars.

But do Americans even want them? Oh, we've got to talk about what's going on with conferences these days. Okay, let's talk about the tech conferences. Those things are exotic, high-priced VIP events. You're like, go to San Jose. You got Zuckerberg demoing an AI VR Bitmoji bot that's going to roll your life. General Motors, on the other hand, has rich Midwestern values. They just did a product unveil in the beautiful suburb of Warren, Michigan.

Everyone walks out with a tote bag and a pen. Now, GM have announced this week it's investing $20 billion over the next five years to make electric catalanx. That too bad. Chevroleses. Okay. Self-driving cruise-leg bots. I'm following you. And then Hummers, right?

Yeah, electric hummers. Snackers. We're talking electric huffles. Hummers. Now they also unveiled a new car battery that gets 400 miles without a charge. 400 miles. That's going to plot. Does that cure range anxiety? Perhaps. Potential range anxiety. Unless you're driving across country. That's true. That could be a problem. Now, the goal, though, is to sell one million electric cars per year by 2025. Bold move general motors. Here's the thing, those snackers that Jack and I found fascinating. Americans don't really want electric cars right now if you look at the numbers.

It's awkward, but we had to call it out. There's not really a clear product market fit. No, last year in 2019, just 246,000 electric cars were sold in the United States. In that same period, 17 million with an M cars in total were sold in the U.S. That means, simple math, 1.4% of new cars sold last year in America were electric. And shocker. That is a tiny. That's like you can't even see that on a pie chart. We're trying to do the pie chart.

Get me in the magnifying glass. And we all know about half of those sales were in California. Oh, classic Snackers. If you're listening on like 101 right now or 280, you know what's going down. Look to your left, look to your right. Yeah, you're surrounded by tractor trailers holding like 11 Teslas. There are everywhere. Or you've got a little buzz going by you.

It's another electric car. Or you're in one. In Vermont, you don't see many Teslas. In California, you only see Tesla. Between the Marina and San Francisco and Atherton down in Silicon Valley, there are more electric cars than people. Now, in Europe and China, you have government regulations that are forcing both carmakers and, like, buyers, to go electric.

In the meantime, you don't have the same thing in the U.S. No, you don't. So, Jack, what's the takeaway for our buddies over at General Motors? If you build it, will they come? Snackers, for the past decade, it's been like an awkward middle school dance. No one's making the first move on this. Customers haven't demanded electric cars. No.

Carmakers haven't made them. You better walk across this dance floor, buddy. Now, Tesla has sold about 90% of the electric cars last year, and we finally have Volkswagen for General Motors. and everybody else is finally investing in electric cars. They're finally making the first move, but carmakers build electric cars. The question is, are the customers going to be there? Now, Apple did this with the iPhone when they killed the headphone jack, which nobody asked for.

My mom is still confused. She thinks there's still a headphone jack. Apple made the first move, and guess what? Customers have come. AirPods are now the top seller Wireless One. But if customers don't buy electric cars, their carmakers profits will suffer. Jack, can you whip up the takeaways for us before the weekend? Carnival stock is down 46% because of three recent cruise disasters.

Snackers, remember to find a proper historical analogy. Our second story, Brawlit icon Erie, is carrying its parent company American Eagle on its back. And an entire market is wide open now because Victoria's Secret is on the decline. Our third and final story, General Motors is going all in on electric, finally making the first move on the dance bar. But do Americans really want electric? So far, numbers show they don't really. Now, time for our snack fact of the day. We got a two-parter here, Jack. No, we got a two-party, and they're both based on my birthday snack fact from yesterday.

This is a three-partner. This is the three-part. What really happens? Yesterday we were talking Brooklyn Bridge. Emily Wanderer from Providence, Rhode Island. Emily, please get some east side pockets on Thayer Street. Emily tells us that Jose Maria Villa designed the first ever suspension bridge on the beach in Colombia while drunk. Turns out this guy was drinking the whole time.

No, we couldn't verify that because Jose Maria Villa's Wikipedia page is only in Spanish. And they can get it on speaks. Protecting intellectual property in the sand is a key thing here. I love that. And then JJ Sully 96 on Twitter hit us up. We assume he's from Cincinnati. Cincinnati people love pointing out things that are wrong about the Brooklyn Bridge. He took issue with the birthday boy who said that the Brooklyn Bridge was the first ever suspension bridge.

Actually, it was the Roebling Bridge, which was open before the Brooklyn Bridge. But they were both designed by the same person. John Robling, who immigrated from Germany to the United States. And we assume he was eating some pints of Graders ice cream the entire time. Emily, J.J. Sully 96. Thanks for hitting us up. Snackers, fantastic week. Jack, you looked great. Great birthday. Thank you. H. Y, H.Y.S.D. Snackers, have you had your snacks daily? Share it with friends.

Post on your Insta story. Tag us at Robin Hood Snacks. It'll make our weekend. Have a fantastic weekend. This is Jack. I own stock of Carnival. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets Inc or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. 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.