The Best One Yet - Apple is no longer an iPhone company, Under Armour’s 14% stock plummet, and beards break P&G’s Gilette

Episode Date: July 31, 2019

Turns out Apple is no longer an iPhone company after releasing its latest quarterly earnings report. Under Armour hasn’t embraced the athleisure trend enough and its latest 14% stock drop reveals it needs a rebrand. And P&G stock jumped 4% even though it suffered a $5.4B loss — blame that on its razor biz (which is blaming beards).Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is snacks. Daily, it is Wednesday. July 31st, and this is T-Boy Tuesday. This is the best one, yeah. It's actually T-Bor he went. Technically yesterday was Tuesday. This one's a lot better than we would.

We got three awesome stories for you. This is a beautiful mix. By the way, a lot of earnings going on. We had to weed through the weeds on this. Apple was one of them. It's the third biggest, most valuable company in the world, and it announced earnings. It's no longer an iPhone company.

No, they're replacing lost iPhone sales with Underwhelming bets. It's quite a business plan. It's interesting. Our second story, Under Armour stock plummeted by 14% yesterday because it's pretty much rejected the athlete's trend. It's done a straight up stiff arm over here. Someone needs to rebrand this thing if it's going to protect the house. Someone needs to rebrand this house. Third and final story, Proctor and Gamble shares rose by 4%. But its Gillette Shave business is struggling because of be beards. Beards. Beards are a problem. By the way, we warned one key lesson from here. Content may be king.

But pricing is the princess. Now, before we jump into that, Jack, are you more of like a chunky avocado guy, a thinly sliced avocado guy? I thinly slice, and you know what? Fun fact, use a butter knife because it's sharp enough and it won't cut you. The things you know, you throw a little sea salt on off that, Jack slices the avocado so thin, you don't even see them. Today is national avocado. You got to keep that in mind. Guacamole, it's not extra.

Apparently not. And we're so used to hearing that. Chipotle, Cabota, probably a bunch of other Mexican restaurants. They're all giving it away as far as we understand. Now, another fun fact, three out of four avocados we eat, like in the last 24 hours. In these states, they come from Mexico. True. And the prices have been surging because, you know, it's drier, drier than ever.

Yeah, poor weather down south. Also, trade war drama has cut. So prices for avocados have, like, almost doubled in the last year. Long story short, take advantage. We're trying to help people out here. You've got to get this. It's a good fat, right? And if you don't know what to do with the pit, if you plant that thing in soil, give it some sun, give it some water.

It'll grow into a tree. A little overwhelmed by all these life hats. You can have your own national avocado day. Boom, save yourself $16 a day. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers. It's snacks about to hear rain food.

It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you.

Robahood Financial, LLC. Member Fenra. IPC. For our first story, we're going big with this one. Apple stock jumped 4%, but it's no longer like an iPhone company. Yeah, it's like relationship status with the world that's changed. Seriously. The magic number here is 50%.

And for the first time since 2012, Apple announced an earnings report where iPhone represented less than half of sales. Now, there was a time. Back in the day, back when Apple's earnings was like a huge deal. It's when we first started doing market snacks. People stopped what they were doing on the street. Streets, TVs would turn off, phones would buzz. Apple learning sports were big.

This is like back when Avicci was the thing. Tim Tebow was playing sports. Tebow was unbelievable. Do you remember Jaggings? I don't. That was the thing then. Uggs were just coming on with that. Jack had a Sony laptop.

Sony was making laptops. Who has laptops like that? Actually, James Bond had that. Well, that was back in the day. This is now. An Apple today is basically an ATM machine cranking out huge products. Look, it's lost some of its mojo for sure. It's not like shaking the world, but it is making gigantic

profits and it's paying those out to investors as dividends every quarter. It's a very mature thing to do. They didn't do it a few years ago and they recently started a few years ago. But last quarter, sales barely inched up. Ooh, just a little. Profits inched down. This doesn't look like Apple. So we jumped into this earnings report, Snacks style. And Jack loves a good like three-part breakdown here.

He's got it up on the board. He's highly recommend. It's like he has three hands. So I broke this down into weak, strong, and new. I like it. Tell me what was weak about the Apple earnings. iPhone sales were weak. Sales overall fell by 12%. True.

Prices are really up on iPhones. Yeah, they're like over a thousand bucks. I'm going to buy a ticket on SpaceX or am I going to get an iPhone? So that's good for sales, but the number sold is way down because people are hanging on to them longer. Okay, so what was strong about the app learning support? Everything else. We're talking sales outside of the iPhone rose by 17%.

We're talking about Macs, iPads, services, wearables, all that's booming, right? That's all of the other categories besides iPhone. Anti-IFO, too. They're all doing well. Jack, what was the new thing? Well, this was kind of a preview, actually. It was kind of cool, actually. The credit card.

True. With Goldman Sachs. Nice combo. It comes out in August. And guess what? It's not metal. No, this thing is titanium. This thing is titanium.

You could cut an avocado with this thing. You should cut an avocado with this thing. Now, if you don't want a physical card, if you want to, like, be that cool guy. We get it. You can also have it digital on your phone. Early adopter. Privacy aspect of the digital-only Apple Goldman Sachs credit card. True.

It changes numbers, like, without. every swipe. Interesting, because that means Goldman can't track exactly what you're shopping. So that's an aggressively like pro-privacy feature. And we all have that one friend who's going to say they gave up their wallet 10 years ago for this kind of thing. So Jack, what's the takeaway for our buddies over at Apple? Tech companies thrive on big bets and Apple's big bets are underwhelming. Get these gems from the earnings report. China sales fell 4%. European sales fell 2%. Sales in the Americas were up just 2%. And iPhone sales fell. So look, Apple needs to be. Apple needs to pay. So look, Apple needs to some growth?

Yeah. Like badly. And you know what its bets are? Arcade, which is its gaming subscription, I've never heard of people talking about it. And then that titanium car we just mentioned, which you're probably going to use for avocado slicing. TV Plus, do we really need another paid video subscription? And what about Homepods? We still haven't seen one.

It's like an elusive elf. No, Apple does not look like it's 2012 booming self. For our second story, Jack, put on your tight spandex over there. Under Armour just plummeted 14% because it's basically lost the athlete's horse. Nick, you know I'm one step ahead of you right now. Jack's a big fan of the medium there. All right, let's talk about Baltimore. The other city by the back.

Home of Wallball, you got a lot of lacrosse players working on there out. Left hands right there. Love those sound effects. Now, let's pivot back to Under Armour, which is headquartered in Baltimore. Yes. It is like a team that keeps losing in its home state. Yeah, we looked at this earnings report and also a research report on it. Basically, Under Armour's market share of, like, activeware in the U.S., it dropped from 6.4% down to 5.6%.

That is a rough statistic. and its market share of footwear sales in the U.S. Also fell. Now, the chief operating officer came out in the earnings and dropped this inspiring quote on us. Rather uninspiring. This is not worthy of Friday Night Lights. Quote unquote, a bit of a mixed bag for us, you know, with challenges to work through and pockets of strength to build up.

Pockets of strength. Sorry, coach. I'm going to stay in the locker room and quit and join the Frisbee team after this. Also, Under Armour doesn't have pockets. Not too much. So you're wondering what's going wrong with Under Armour? It's easy. Straight up.

much ath, not enough leisure. The current brand is completely about dudes working out really aggressively. We've been saying this for a couple of quarters. Yes. I actually want to quickly give Under Armour some credit here. Go ahead. They were the first sports brand I remember that was aggressively marketing towards like women athletes as being fierce and like strong as opposed to like soft and delicate. And they did do that initiative. However, the research is showing that their brand equity among women is like barely budged up. They are a long way behind Nike, Lulu Lemon and some other brands. Look at what. what those other at-leisure brands are doing right now. They're emphasizing the leisure.

Lulu, experiential stores, shampooes, 25,000 square foot with, like, a meditation studio. You got Nike making a very public stand on social issues. You got Adidas partnering with, like, Beyonce and Kanye design clothes, shoes, and just get that out there. And Puma is seriously, in the fashion department, Selena Gomez, Rihanna, they used to have Kylie Jenner. Puma's basically become a concert group. This is all leisure we're talking about, but Under Armour is still so ass. So Jack, what's the takeaway for our buddies over at Under Armour? Under Armour needs to rebrand.

Kevin Plank, the founder and CEO of Under Armour, said this. He said the brand needs to be, quote, unquote, louder. I couldn't disagree more. Under Armour as a guy who played high school and college athletics, you're talking to us. Under Armour's loud. A little too loud. It's really loud.

We get it. Your house is under attack. Now, the brand needs to be smarter. Not louder. Less sweat more sweet. Less lifting, more just living. Less protect this house, more where the country. clothes around the house. Under Armour, rebrand. This is Steph Curry from the future. Please, rebrand.

This is Jack, and I own stock in Lulu Lemon. For our third and final story, Procter & Gamble, aka P&G, just rose 4%. Despite like a major shave situation. Now, I want to follow the headquarters city. Trend. I like how we're going with this. Cincinnati based. Procter & Gamble is snuggling, nice and close to the Ohio River. If you've got to sink, a bathroom or a closet, P&G products are probably like hiding in there. I got it. I got it. Gotta say, I take offense to this. Jack disagreed with me. P&G is highly, highly fancy.

Nick's like telling his doorman to shuffle over to Whole Foods and get him tied. All I need in this life is a Fabriz and a Tidestick pen. Tide's like $100 per pint. The other things they got in this P&G family are tied, pamper, bounty, sharmine. What else they got? Well, bounty, which apparently can absorb an entire barrel of wine. Remember their commercials. They go to an oil spill.

Boom, the thing's covered in like a day. So Tampax, Fabrized, like a whole. whole bunch of home products. Herbalessence. That you probably like lock the cabinet for so your kids can't get in. Your mom would want us to say herbal lessons. Now, interesting thing we learned covering PG&E. They just lost $5.4 billion last quarter, which is a big number. The reason for that loss goes way back to 2005. Take me. It acquired Gillette, the best a man can get based out of Boston, Massachusetts, for $57 billion. Nick, that is huge. That's almost four lips. That's a big number.

Rounding up there a little bit. So they acquired Gillette and Venus razor blades. But last quarter, the accountants came in and said, you know what, we've got to revalue this business. So they revalued Gillette down by $8 billion. Right. So that affected the company's balance sheet, but it also affected profits for last quarter. It's just a paper loss really what happened.

But technically... The rest of the business is just doing its thing. It's doing really solid. Now, before we get into the rest of the business, we were very curious about this why Gillette got devalued razor trends. The company blamed lower shaving frequency. Fact. You just walk around the L train if you're in New York.

Get to Brooklyn. Walk around Williamsburg. You're going to see a lot of beards. Not just Brooklyn. Get on any train. Get on my train. I got a beard right now. And I'm still shaving.

I only shave beneath them above the fold. It's true. It aims for like the 80 degree angle over there. You know, I'm still shaving, but I don't need the nimbus 2001 that Gillette is trying to show. Shavius, razius, facius. So in response to people just wanting a more basic razor, you can. You got Dollar Shave Club.

Now owned by Unilever. And you got Harry Shave Club. Now owned by Shick owner Edgewell Personal Care. So the trend is that fancy and ridiculously sophisticated razors that Gillette sells. Mach 42. Those are out and simpler is in. So Jack, what's the takeaway for our buddies at P&G and why did the stock jump 4% despite everything we just said? Because pricing is power.

Now, would you rather walk through walls be able to fly or raise prices? Raise prices. Every final answer. Every MBA professor listening to this is like freaking out right now. Proctor and Gamble has pricing power. They've been slowly raising prices for years. And guess what? Consumers keep buying.

Get this. Sales for P&G are up 7%, which is their biggest jump since 2008. Half of those gains came from increasing prices. That's it. The other half came from just people buying more of those things. That's a really nice combination. So the economy is doing well. You're probably getting yourself.

Treat yourself to some top shit. laundry detergent. Top shelf laundry detergent. On the top shelf, literally. Jack, can you whip up the takeaways for us over there? iPhone sales fell below 50% for Apple for the first time since 2012. And its big bets these days are non-device services. Under Armour sales fell in North America again as it's losing to aft leisure rivals. Under Armour, less wicking, more loving. Third and final story, Proctor and Gamble is flexing its pricing power muscle except in razor blades. And it's lowering razor braid prices. Now, time from our snack fact of the day.

Send in by a fantastic snacker, Evan Moynevisiri. He's based in Philly. Not just based in Phistown, Philadelphia. I like that a lot. Now, I got four words for you, by the way, Evan. Fishtown's incredible. Pold pork feta sow. Feta zau is a great barbecue.

You know what we mean. German word, it means fat female pig. And that's what they serve. That's not the fact of the day. No. We got to double for everyone over here. Bank of New York Mellon was founded in 1784 by Alexander Hamilton. Now, this was the first company to be listed on the New York Stock Exchange right nearby where

Alex is buried. He's buried at Trinity Church in Manhattan. It all comes full circle. It's like a circle of life kind of thing. Although when it was listed on NYSE, it was just Bank of New York, not the Mellon. One other story that happened yesterday. You got to know about this. United Airlines has invested in clear the company you've probably seen moving faster than your TSA

pre-cha. And you probably have that one smug friend who, again, tells you it's better than TSAPB check. Hope your eyeball retinas are ready. Snackers, you've outdone yourself again. You guys look great. We love being with you. That's all we got for you today.

Be back tomorrow. I'm in. 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.