The Best One Yet - Casper becomes a unicorn, Lululemon surges 11% on Man-leisurewear, and Southwest’s big Boeing problem

Episode Date: March 28, 2019

Lululemon’s sales stretched as the CEO sets gender parity goal. Casper Mattress’ slide deck gets revealed, just as it hits a $1.1B valuation. And Boeing’s proposed a new fix to its faulty 737 Max planes, but Southwest is feeling the pain.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 next. Daily, it's Thursday. March 28th. We've done like three pods this week, and this is my favorite one. You want to hear the rundown? Is it the best one yet?

It's the best one yet. I like it. The first story is Casper. Yes. It's turned into a unicorn, finally. And it wants to IPO. No sleep till IPO. Second story is Lulu Lemon.

Shares surge 11% and we got two words why. You know? Can I say him? Go ahead. Man khakis. I'm pretty sure Jim Harbaugh wears Lulu Man. We're going to fact check that one. Third and first.

final story. Boeing. It finally revealed how it's going to fix its 737 max planes. But this is really a Southwest airline story. We're excited about that. I'm excited. Now, markets barely budged. They actually dipped a tad yesterday, but we were a little distracted by one thing. Where is the, uh, where is the final throne? Where is the final throne indeed? Thou doth not know. We are 18 days away from the final series of Game of Thrones. And HBO, because they knew this would work, and it clearly is, hid. six actual Game of Thrones Thrones throughout the land. Six giant thrones with like a hundred swords

coming out of them all over the world. This is just pure raw buzz marketing. Now one's been found in a UK forest. Another has been found in the Brazilian desert. I don't know who was wandering there. One was found in Canada, which is just great. Another in Spain. The funny thing about... One is Sweden.

And one is still missing. Yes. So if you find it, tweet ads. We just want to let you guys know because we got your back. Also, check out the Canadian local news. created quite a stir in that British Columbia in town. It's my Thursday morning routine. This is perfect. But before we get into our stories, bear this in mind as you're listening to today's snacks.

You spoke to the lawyers. 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. 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. Robberhood Financial LLC, member FINRA slash SIPC. For our first story, this one is wild. This like came out of nowhere. Casper, the direct-to-consumer mattress company, just became a unicorn. And it's going to IPO. Oh, my God.

It's talking about IP-I-I-I-R. It's curious about IP-O-N. It's actually just interviewing investment. Now, full disclosure here, I slept on a Casper last night. Full disclosure, I also own a Casper mattress. This mattress company, Casper, was like the first out-of-the-box kind, and then what's so crazy is how many copycats basically came out? Off the top of my head, purple is a Casper copycat. You got Helix, eight sleep, bear, Lisa.

And then you get into the fringe stuff. I've never heard of these, but apparently Nick has Pangaea bed, tough than needle, and then... Ghost bed, our favorite. Our favorite ghost bed. So this is a whole direct-to-consumer, direct-to-your-front-door in a box mattress industry. Casper's the leader. they announced yesterday they raised $100 million in new money, and they're officially worth over a billion. Now, we already knew about some of their investors. It is quite a lineup here. Celebrity investors.

First, Leo DiCaprio. Then you got 50 cents. Then you got Kyrie Irving, the former Duke basketballer. And then you get Targe as in Target. And then there's a whole bunch of VC companies you've never heard. Now, here's what's wild. The only reason we know about Casper's financials right now is because a media company called the information got a hold of the deck and leaked it. Whoever sent the information this slide deck, thank you. Because I'm having fun with this information. Some guys like, I'm not going to open this PowerPoint. Oh my God, I'm going to open this PowerPoint. This is Casper's slide deck for investors.

Here's what we learned about the numbers. For the first time, we learned their sales. 400 million last year. It was unprofitable. It lost $64 million in EBITDA, which is like a crude profit measure. But next year, 2019, it expects to be profitable. Now, Casper has one key interesting thing we notice here. they should dump Amazon.

Yeah, we learned this according to slide 18. You can get Casper in like three places mainly right now. First, Casper through the website or one of its stores. Second, Target, which is one of the investors. And third, Amazon. But here's what the slides revealed. Nobody's going to Amazon, which is shocking. Just 4% of sales the last quarter were through Amazon.

Casper must be thrilled about this. Oh, they're just sleeping pretty on this. It's completely controlling the whole experience because people are going straight Casper. And that means more profits for Casper. Yeah. The brand is so strong. It doesn't even need Amazon. People are going straight to it. This is a great story. Get Amazon. So Jack,

what's the takeaway for buddies over Casper? Retail's not dead. Bad retail. We've said that like a hundred times. It works 101. Listen, Casper announced last year it is opening 200 brick and mortar stores. Physical. Physical stores. Like with cement. So while all these other stores are going out of business,

Casper is expanding. This is impressive. And not only that, it's doing these, it's doing these like nap pod stores. For $25, you can buy a 45-minute nap at a Casper store. They'll give you a toothbrush to brush your teeth after so you feel strong. You can walk out with a pillow. You can even buy one of those lights that stops you from being depressed. You might think this Casper Brick and Mortars thing is a marketing gimmick, but they're actually standalone profitable these stores.

Now, here's the thing. It costs $700,000 to build one of the stores. It's profitable within two. years. Thank you for sending that slide deck. For our second story, Lulu Lemon just searched like 11% yesterday. In after hours trading. And that was basically because of a new kind of clothing. Yeah. First of all, pro tip. Please. Lulu Lemon is the perfect gift for a relative who's dabbled in yoga, but hasn't really committed yet. And that you haven't really seen since the last year you had to buy them a gift. Can we also acknowledge Lulu Lemon's name, Athletica? Lulu Lemon

Athletica? I don't know where the Athletica comes. Typo? No one really knows. Did they mean to say athletic. I would love if they reached out and told us. The CEO said yesterday that 2018 was one of its best years and deservedly so. Quote, unquote. Sales jumped, you know, 17%? That is strong. And that 17% was for each individual store. They made 17% more. That's called same store sales growth. And it's pretty good. It's one of the best we've ever seen. Now, there's one really particular product that's driving all this love. Cackies. Men's cackies. Men's cackies. It's a beautiful thing. Here's what they literally said in the earnings report.

Men's bottom section has been extremely profitable. First of all, I need people to start calling mine a bottom section more often. And the company just announced its first male celebrity brand ambassador. Congratulations, Nick Foll, legendary former Philadelphia quarterback. Nick Fools is on the Jacksonville Jags now, but let's just say he will never have to buy a beer in Philadelphia ever again. Especially a yingling. Man, we love our Philadelphia beers. The CEO's goal is to have gender equality and sales.

Now, he wants the men's business to literally be equal to the women's business. They actually don't break out how much of their sales are men right now. But based on the square footage they dedicate in stores, I'd say it's about 20, 25%. It's not there quite yet. We'll see. They're getting there. We're aiming for it. This is not your mom's Lulu Lemonade more people.

This is a dual gender brand. That's the goal. And investors, we're excited about that gender parity they're aiming for. So, Jack, what's the takeaway for our buddies? over in Lulu Lemon. Our takeaway is work, leisure wear. That is the new thing, and it's a snacks original. Now, the trend of casual workwear,

it's been inching up over the last few years. No one said it. It's kind of like unspoken. You just noticed, I don't know, not going to wear a tie anyway. I haven't tied a tie in 18 months. I don't know how to tie a tie. Now, this trend has actually been cemented by banks. When Goldman Sachs announces that they're going to have a casual policy, no ties necessary, then it's over.

Yeah, meanwhile, the guys over at J.P. Morgan were like, oh, hey, we've been doing that. since 2016. Suit companies are terrified. Lulu Lemon is excited. Men don't need suits as much. No, they want breathable khakis that you can also jump on a treadmill in. Also, Snacks Daily Policy. When we own shares in companies we report on, we'll tell you, I own some Lulu Lemon shares. And he may be wearing the khakis. For our third and final story, Boeing just announced it's fixed. It's 737 max eight plane situation. But the story is not really about Boeing. It's about another company who's really failing.

jumped into the update to see what they're up to here. Right. So Boeing is proposing to fix these 737 maxes. It's going to update the software. It's going to create a new alert in the cockpit to help pilots. Very good. And it's going to give additional pilot training. Now, the FAA has got to look at this whole thing. Bring out its ink, bring out its stamps, and give the old approve or disapprove. Right. So analysts expect the planes could be back in the air within six to 12 weeks. Now, here is our take on this. It's that Boeing is going to be just fine. Boeing's business will be okay. Now, since the Ethiopia air crash on March 10th, Boeing shares are down 12%. So that's been painful. And naturally, when there's two big air catastrophes like this, shares are going to fall. But here's

the thing. There's only one competitor Boeing has to deal with. It's its European rival Airbus. Airbus is the only other company making big plane jetliners like Boeing. And guess what? It's got a backlog of orders. We're talking like 7,400 planes. At the end of 2018, it had 75,000. It had 75,000. 400 outstanding orders it hadn't fulfilled. And get this, the company made 800 planes last year. So take out your T-I-83, carry the one. That means it would take nine years. It has nine years of outstanding orders before. So if you're like Delta and you say, I don't want a Boeing anymore, I'm going to switch to Airbus because of this, Airbus will call them and be like, okay, in 10 years we'll deliver you a plane. In 10 years, we're like not even going to be flying. They're going to

3D print you in another city when you want to get there. If you cancel your Boeing order right now, you better take the train. Good luck. So Jack, what's the takeaway for our buddies over at Boeing? The real loser here isn't Boeing. It's airlines. The FAA ordered a grounding of these 737 max 8s on March 13th. And Southwest owns 34 of those. Now, it's had to cancel Southwest. 9400 flights. Yep. And it's going to have to cancel a bunch more because best case scenario, the planes are back in six weeks. So what's happening is Southwest stock? Their shares are down 6%. And if passengers aren't comfortable with this fix, their shares could fall even more.

What this is showing us is that monopolies don't lose. Customers of monopolies lose. Jack, why don't you whip up the takeaways for us? Okay, Boeing is showing us that monopolies don't lose. Customers of monopolies lose, and that's airlines. Stick that on a T-shirt. Casper is a newborn baby unicorn, and it's showing us right now that retail's not dying. Just the bad retail is dying.

Officially we've said it like 1001 times. And Lulu Lemon, it's relying on dudes to pick up the slack, buy some stretchy yoga pants, and drive growth at that company. Yeah, khakis are the new jaggings. Snack fact of the day, guys, we found the most popular Airbnb in the world. Okay, it's in a town called Aptos, which is just outside of Santa Cruz, California, and it's called the Mushroom Dome Cabin. It is literally a geodesic dome that's not that big. It looks like glamping, but you're in a trucey, California. tree house that looks like it's a second home of Peter Pan.

It looks like if Luke's die of Skywalker like commissioned an architect on planet Zorro, this is what they do. So a couple other things happened in news yesterday. Check out our email newsletter to find out more. First, Yeti Coolers. It's stock hidden all time high. And then Walgreens announced it's going to start selling CBD products in 1,500 stores. Boom.

That was a great podcast. I had a lot of fun with you. We will catch up with you tomorrow. Can't wait. 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 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. 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.