The Best One Yet - “🎢Baby Yoda’s baby daddy just retired” — Disney’s CEO quits. Shake Shack is behind. Amazon’s 2nd software profit puppy.

Episode Date: February 26, 2020

Out of nowhere, Disney’s legendary CEO Bob Iger is stepping down — and the new guy isn’t necessarily the right guy. Shake Shack’s shares plummeted 14% because it’s basically given up on innovation and is acting like a teenager. And Amazon will start licensing its human-less grocery store tech, starting with airport stores and sports stadiums.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 Jack. And this is Snacks Daily. It is Wednesday, February 26. Snackers, it is an honor that Nick and I get to bring you the best one yet today. No joke. 4 p.m. I always make myself some peanut butter. Jack makes me from tea.

It was the best tea he's ever made me. Do not oversteep the tea. Jack steeps for four minutes. Boom, we're out. Let's hit this, Jack. Markets fell again. But we have three positive stories here. Okay, three.

First story. Disney's CEO should be on the Mount Rushmore of media. Scratch that Mount Rushmore of Company. This guy. is an all-time Hall of Famer, but Bob Eager is shockingly retiring as CEO two years earlier than expected. No joke. We got the news literally as we were craft in this pod. Our second story, Shake Shack plummeted 14% after its latest earnings report. Pour some shack sauce out for this guy. Shake Shack has basically been lazy the past year. Get off the couch, launch some innovative sandwiches, guys.

Our third and final story, Amazon has opened up a bigger, badder, humanless, cashierless grocery store in Seattle. We already knew these like freaky anti-human stores were coming. But now they're licensing the technology, the go cashierless technology, starting with airport stores and sports stadiums. Boom. Before. It's really exciting. We hit those three wonderful stories. Snackers, you may have heard about how bad the housing crisis is out here in San Francisco in the Bay Area. It's so expensive to rent. People are living under their friends' couch. People are moving into like pet stores where they got some spare space in the back. They're secretly living under their desk at Airbnb's H. Jack told me he wants to get a peloton so we can sublet the things. thing and let someone else live on it. I sleep in position three on my palatown. But Jack and I noticed an interesting thing developing in San Jose adult dorms. We're talking about like an 803 room high rise

coming up in San Jose by a company called Star City. It's a starter. Here's their business model. They're going to make a huge building and cut it up into really tiny rooms. Like a chef. 803 really tiny rooms. They could have done like 300 normal sized rooms, but they did 803 really tiny ones. We know what you're thinking. They're going to give these way for like, you know, $500, $600, $700, $700. Nope, nope. $2,000 a month. That's how much an adult dorm costs in San Jose, California. In New York, that gets you like a closet in the East Village, if you're lucky.

I think you could get a studio for $2,000 in the East Village. I didn't define closet. In San Jose, though, for $2,000 at this adult dorm, you get a bed, you get a desk, not too shabby, and you get a dresser. Is there anymore? I think it's like 10 square meters. Answer is you don't get anymore, but everything's designed like it was like by IKEA's grandfather. Now, if you want to brew some coffee.

coffee, or go to the bathroom, or chill in the living room and watch Game of Thrones? Interesting you said if you want, because I think those are all things you have to do. The kitchen, the bathroom, the living room, they are all shared spaces with the other people on your floor. Right. This is like a dorm room situation. At Middlebury, we called it a suite. At Brown, I think they called it a community.

Of course they called it a community. That is so brown. It's very feng shui. Now, they're calling it co-living, but it's basically adult dorms. We have some questions, though, about the conduct and the rules. We know everyone's going to be like over 22 with this thing, but is there going to be? be an R.A. What happens if you get caught with a fake ID? It's always like, hey, this is Mike,

I'm your friend, but I'm going to enforce the drinking rooms. Are the bathrooms co-ed and do you need to bring your own bathroom cat? And then bottom line, the fridge situation, that thing's going to get stacked. Are we using sticky notes to designate? If you take the closet doors off the closets, do they double as pawn tables? Or do you get fined at the

end of the year? You always get fined. $2,000 a month you get an adult dorm in San Jose. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we Get something illegal out the way. The snacks about the hair 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. Snacks is digestible. Business news for you. Robohood Financial, LLC, member FINRA slash SIPC.

For our first story, Jack, we got a LinkedIn update over here. Bob Iger. Bobby D. Has changed positions. He's actually retired. First Ballot Business Hall of Fame are over here. Just retired as the CEO of Disney suddenly. This is the top of the heap, 16-time All-Star Baby Daddy of Baby Yoda.

We're talking about Simba's personal mentor. We're talking about the guy who gave a kidney to Tinkerbell when she had trouble flying. Snackers, we're talking about Bob Auger, the now former CEO of Disney. You've heard of Elon Musk. You've heard of Steve Jobs. Great guy. Jack Moss or Richard Branson. You haven't necessarily heard of.

a big Bob Iger, but you should. He's the CEO, I'm sorry, the former CEO of Disney since 2005. And he's like, what he did here is he didn't like make his personality the thing you should know. Well, you got Walt Disney, Mickey Mouse, and like Superman. He let them kind of carry the load on this thing. Actually, I think Superman's DC. And he was technically supposed to retire at the end of 2021.

But surprise. Boom, Jack and I are preparing the podcast and we get an update. Bob's out. We pulled an audible, Peyton Manning style, and we started. started to research Bob Iger and Disney for the snacks. Probably was going to take a three-day weekend, decided to extend it to forever. Now, we said he's retiring as CEO,

but he will remain the head of content creation for Disney through 2021. He's going to be that guy with, like, the whiteboard and like a bunch of sharpies being like, I just, I think, I think it should look like this. If you've seen the movie saving Mr. Banks, you know what we're talking about. If you know, you know. Now, Iger is arguably the most important person in Hollywood, media, check, sports, and toys. Okay, Hollywood.

Disney is the biggest movie studio by far. Media at $699 per month, Disney Plus is basically a public service for TV and movie bingers in America. It's like Oprah giving this stuff away. It's like the national parks. It's a wonder. Jack Sports. Two of the top six most watched things on television

last year were football games on ABC and ESPN. Guess what? Disney owns both those champs. And then finally, toys. Baby Yoda. Enough said. Disney has battled through the financial crisis. Yes. The Great Recession and the cord-cutting destruction of cable TV. And Snackers, when Jack and I look at what Disney's done, we see Bob Iger as the guy who has seen it through it all. He took over in 2005 when Disney owned 21 cable TV channels. Let's time

travel back to 2005 because ESPN was the only profit puppy for Disney. 55% of Disney's profits came from cable TV. That's kind of a shocker. Boom, three years later, 2008, Netflix launches streaming and becomes a thing. That's a huge threat to Disney. Right. So what did Disney do? They went out and beefed up on content before Netflix ever could. They acquired Marvel Studios. They acquired Fox. They acquired Pixar and they acquired Lucasfilms, aka Star Wars. And then they said, you know what? We're going to need a little bit of technology to go along here. They bought a bunch of tech companies to help with the streaming. Thanks to those savvy moves from the leadership of Bob Agger, Disney today is still thriving. They got Disney Plus, theme parks, and movies all living their best lives. And the stock today is

five times higher than the day Bobby Agar took over in 2005. So Jack, can you sign my autograph book over here over at Disney World, and please tell us the takeaway for our buddies over at Disney. The new guy at Disney seems kind of unqualified for the job. He's a theme park guy. Yeah, not to go a little more extra LinkedIn on you guys, but we're doing a little resume deep dive on this thing. Byger's successor, Bob Cheapack. He seems like the wrong guy for the job. Right.

You know what his most recent position is? Head of Disney theme parks. We got to endorse this guy for like knowing how to cut the lines. He's an expert at Epcot. Okay, you'll like point a good Mexican restaurant. He knows all about the animal kingdom. Keep your hands flat if you don't want him to bite your fingers off. It's a small world after all.

Yeah, everyone knows it's kind of scary. He can kind of guide you through it. That's Bob. He's the new guy. But that's not exactly the skill set we're looking for. And get this. 27 years ago, before he joined Disney, yeah.

Cheapack was at Heinz ketchup company. Okay, Snaggers, nothing against Heinz ketchup. We use it on everything. We squeeze it every day. Doesn't seem relevant, though, to a company that's trying to define the future of media. And Disney's future is all about future media. Disney Plus, ESPN Plus, and Hulu. Those are the three core things.

the nucleus that's going to drive the rest of Disney's ecosystem. Jack and I heard this news. We had to sit down and slap each other because we're like it feels like Netflix is offering the CEO job to the guy running the DVD business. No. Yeah, you don't want that. DVD is not the future of Netflix. And maybe that's why Disney stock dropped 6% after the news.

Because Bobby Agar is retiring. For our second story, ShakeShack stock dropped 14% because it's going through a teenage slump. Full disclosure. Yeah, we should do this. Nick is emotional. compromised when it comes to covering Shake Shack. He met his wife at Middlebury College, but only went on a first date like four years later at a Shake Shack.

When you cut into a Schoomberger and I saw the way the cheese dripped down Marley's chin, I knew she was the one. Sparks flew when they touched the same crinkle cup French fry at the same time. But then I had to get a lot of napkins, but it was a beautiful thing. Now, at Shake Shack, they're actually innovating here with my idea. Yeah, what did they run? Letting managers have four-day work weeks, aka three-day weekends, America, we need less work and more long weekends.

It's a critical thing. Shake Shack do more of this. By the way, a very beautiful-looking earnings presentation from Shakeshack. They open up with lots of delicious-looking graphics. Like the Shack Burger getting squeezed and it's just the juicy you wanted to do. There's like a lot of hugging going on. It looks like the whole Shakeshack company is going through like a community building exercise. Now, all that Goody Two Shoes feeling was strategic because the numbers were really ugly.

No, when you look at same shack sales or like stores that are open at least a year, those dropped 3.6% traffic, which is the number of human beings that walked into shake shacks, fell by 5% last quarter. Meanwhile, the like Madison Square Park Line still goes all the way out to New Jersey. Part of the reason dropping sales and dropping foot traffic is a surprise is that most of the 275 shake shack locations are babies. They're adorably young. Nearly two-thirds of all shake shack snackers are less than three years old. Now, you would have thought that a brand-new shake-shack in the neighborhood would have boosted. boosting sales because of the novelty of a new rescue. One just opened up in Calhallow in San Francisco.

You literally have to like lobby to get into this thing. But apparently that's not the case nationwide because sales are falling. So Jack and I looked into this further and we noticed the answer could be on slide number 14 of Shake Shack's earnings deck. They plan to increase innovation in 2020. Here's the problem, Shake Shack. It's already 2020. We're two months deep. Yeah.

And then we noticed the CEO had this critical line which kind of solidified that thing. Yeah, well, you know, we chose to limit our menu innovation in comparison to prior years. Basically, you're saying you gave up on the cool foods that drove store traffic. What's going on here? Get this. The veggie shack burger? It's only planned. Yeah.

And, hey, Shake, Jack, not sure if you've seen this, but plant-based burgers are kind of a big deal. Yeah, we thought like there was going to be, like, plant-based asparagus hot dog by the time in our laps right now. Remember, Domino's sold salads not to sell salads. They sold salads to sell pizza. Meanwhile, Shake Shack's still pumped about their, like, chicken bites, which are just fried chicken bites that they came out of last year and was like the only thing they came out with last year. And hot chicken bites, they're only a limited time option. Come on, stop messing just with the chicken shake shack.

So what's the takeaway jack for our buddies over a shake shack? The future of fast food is acting like a tech company. And that means launching new products and eliminating friction. At McDonald's, we've spent $1 billion than last year on kiosks so that you can order quicker and get your food faster. Yeah, at ShakeShack, they have like a bunch of kiosks that look like a high school computer lab and that's only in a few locations. At Chipotle, we still.

We've tested five new menu items, including carnitas, which drove sales higher, and you're delicious. At ShakeShack, we have multiple variations of chicken that we're adding to the menu. At Domino's, we're dominating delivery with our own app. Yeah, they're still struggling to move everything at ShakeShack over to Grubhub with a new exclusive agreement. At Sweet Green, we're doing lockers to drop off big packages of food for you in the whole office right in your lobby. Yeah, at ShakeShack, we're still figuring out the pickup times then. Shake Shack is struggling to respond to my optimism from the other restaurants. But Shake Shack has fantastic core products, and they could do cool new ones.

For our third and final story, Amazon Go, the cashierless stores, are coming to ballparks and airports ASAP. We're calling this G-A-A-A-S-G-A-S-G-E-S-E-A-S-S-E-A-S-G-A-S-W-A-S-A-S-W-A-S-W-A-W-A-W-A-W-A-W-E-W-E-E-W-E-E-W-E-E-E-W-E-E-E-E-A-W-E-E-E-A-W. Amazon Go was unveiled. There are stores that you can walk into, take what you want, and walk out and don't pay anybody. A lot of people were like walking at Dwayne Reed's being like, oh, oh, I didn't know. Oh, I thought this was a Go store. Why did I put it under my coat? I thought it was a ghost store.

It's cold out. Come on, man. We're talking to Amazon Tech that knows what you took and then charges your prime account without any human interaction. And you're like, oh, how does it know I am? You know, facial recognition, no big deal. Stocks you as you walk about the store. It's kind of cute, but it's kind of freaky.

I think you have to scan your Amazon Go app before you enter, and then it knows you're there, and then it literally just stocks you. walk around. The entire time you're thinking, this is pretty cool, and the entire time you're thinking, this is being used by China for something. True. But two years later, there hasn't been much Amazon Go news. Right. You got 25 Amazon Go stores, but sales shrank in 2019. This thing's like the Kroonut. Everyone was talking about it. We're the Kronuts these days. But yesterday, we had two big, fresh pieces of Kroonut news from Amazon. First is that they're opening the first, like, huge Amazon Go store in Seattle. Not just a Dwayne re-sizing. This thing is actually 10,000 square feet.

A.k.a. the size of a Trader Joe's. Yeah. Can we put this in lifts? No. Let's keep it. I don't have to calculate. We'll keep it at Trader Joe. But they're calling it Amazon Go Grocery, which ironically is going to compete against Whole Foods. Which is owned by Amazon. Second big piece of news. It's going to start licensing the Go cameras, the Go sensors, and the Go high-tech shelves to non-Amazon stores. Right. So other stores like a Dwayne Reed could use that technology, go cashierless, and it would still just be a Dwayne Reed store. And nobody would actually know that it's Amazon.

That's why Drainweed is going to pay Amazon for it. By the way, going back to this Whole Foods thing, did they just call a favorite child out basically? No, they must be like, wait a minute, is this a, is it April Fool's Day? Am I getting pumped? What's going on here? You acquired us. Now, we're calling this gas, go as a service, and we're excited about Amazon's first adopters of this gas technology. Amazon salespeople are targeting airports and sporting arenas to use this technology.

Can you imagine during the 7th inning stretch? You'll run down to the concession. You get a Yankees helmet full of popcorn. It always tastes better in the helmet, even though it's kind of a disgusting image. And you run back before the next pitch even comes because there was no cashier, no technology, no credit card swiping, it was go. Oh, boom, imagine you get to the airport. You're a terminal four in New York for Delta. You go through TSA, you breeze through, run to A5.

You're trying to grab like a cashew cookie Lara bar. Last call for the flight to SFL. Jackie, you know I'm with the, I'm boarding with the diamond medallion status. Nick, you're late. I thought the story was that you were running late. That's true. So I'm running late. So I grabbed the cashew cookie layer bar and then I can check out so seamlessly because they use the Go technology.

So Go technology at airports and sporting events would be awesome. Right. But you know who absolutely would hate to ever consider even using this? Walmart. A.K. the biggest retailer on Earth, ironically. Walmart's arch enemy is Amazon. And there is no way they would partner with Amazon on this. So they've actually signed a five-year tech partnership with Microsoft.

We suspect they're working on the same exact thing. It's forbidden at Walmart to be prime anything. So Jack, what's the takeaway for? our buddies over at Amazon Go. Amazon knows that profits are in software, not Amazon e-commerce. Snackers, get this, Amazon's gigantic e-commerce operations that you basically know everything about Amazon for, that brought in $5.4 billion in profit last year. Yeah, we're talking like, you know, two-day shipping, that is Amazon's e-commerce. And that profit of $5.4 billion, it's not that big. No, it's shockingly less than Texas Instruments profits. That's right. The company that makes the

T.I.83 plus used in algebra. Yeah, that hasn't changed in like 20, years. It's still black and green. That made more profits last year than Amazon's e-commerce global division. Meanwhile, Jack and I are looking at Amazon's numbers, their Amazon Web Services cloud software brought in $9.2 billion in profit last year. Amazon's profit puppy is AWS, and it made twice as much as the e-commerce division. So we're looking at gas, G-A-A-As, Amazon's Go as a service, and we're thinking this could become another software. This could become profit puppy numero do. This is Jack. I own stock of Amazon.

Jack, and you'll whip up the takeaways for us over there. Gladly. Disney stock slipped 6% yesterday on the surprise retirement of Bob Iger. He's the most powerful person in Hollywood, media, sports, and toys. Baby Yoda's. That last one feels out of place.

Did I mention he made a great tea today, by the way? Second story. Shake Shack's lack of innovation in 2019 showed up in ugly sales and a dropping stock. The other fast food chains, they're making it look bad by thinking product and friction like a tech company. Third and final story. Amazon is sharing its Go cashierless tech with other retailers,

and it's starting with airports and stadiums. And Amazon software makes double the profit. Now we got one snack fact from the beautiful state of Vermont. We got Ariel from Westberg, Vermont, which do not. Do not, do not, Jack, confused with Eastburg, Vermont. No, well, actually, East and West Burke are both great. So thank you for bringing that up. What about North and respectable populations of like 1,000?

You just don't want to mix up the Birx. I'm just telling you there been incidents. Well, Burke is home of Burke Mountain Academy, which is home of Michaela Schifrin, the best skier in the world. We've got like a double snack fact here because what Ariel also said us is that apparently there are four states that have banned. We repeat, banned billboards. Yeah. You know, when you're driving down I-91, you don't want to see an ad for some credit card that'll give you double the points. No, because then the next, like, 50 feet later, you're seeing another ad for a credit card with 100 points.

You ready for the four states? Can you hit me? Maine. Okay. Vermont. Yep. Hawaii. And finally, Alaska.

Beautiful. By the way, main reasons they do this? Beautiful state to protect the beauty of the land. Interesting question. When we move to self-driving cars, does the value of the billboards go down? I think they do. I think you're not looking at the billboards. Vermont stands for Green Mountain.

Don't block them with billboards. Snackers, we loved having you with this day. Remember, H-Y-H-Y-S-D. Have you had your snacks daily? Why don't you post a picture of whatever you're playing this on? Spotify, Apple. On your Instagram story, tag Robin Hood Snacks, H-Y-H-Y-S-D. And remember, Jack, thank you for the tea.

Don't Steve too long. 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 it. of 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.