The Best One Yet - “Chipotle is an internet-first burrito factory” — Netflix’s hoarding strategy. AT&T’s triple-whammy. Chipotle’s eLeadership.

Episode Date: April 23, 2020

Netflix’s corona-conomy subscriber surge wasn’t a surprise — what shocked us was how much (and whether it can last). AT&T’s earnings report confirms our Snacks takeaway from a month ago: It’s facing a triple-whammy of accelerating trends. And while the restaurant industry is hit hard, Chipotle’s CEO made moves that popped the stock 12% Wednesday.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 Thursday, April 23rd. This is the best one yet. Nick, I feel lighter and a little bit more aerodynamic than yesterday. Jack, you know, I tell you every day, you look great. You look fantastic.

It doesn't matter what you do with your beer. Snackers, I had the playoff style playoff beard. It went like seven weeks in this quarantine, but trimmed it because I feel like quarantine beard is out. In the meantime, my hair is going crazy. There's nothing I can do about it. I'm actually kind of scared. What happened to stocks, Jacks?

Docs rose for the first time in a few days. Feels like it's been only a few days. Meanwhile, we put together the best snacks daily, yet can you kick it off with our first story check? Did Joe Exotic kill one of his husbands? Honestly, Joe Exotic would probably say yes. Netflix's earnings report showed that the OG streamer is benefiting immensely in the coronavirus. Turns out we got 16 million new Flixenistas in the past three months. But now we want to know, are those users faithful to Netflix?

We're talking about Netflix in the era of competition. For our second story, last month, we predicted that cord cutting would accelerate in the coronavirus. It looks like AT&T's earnings report is a case study in confirming that. The telecom media tech giant is facing a painful triple whammy. For our third and final story, do you want a 16 gig burrito or a 32 gig? I don't care as long as the calorie counts over 2000, which it tends to be. Chipotle is officially an e-commerce company. The latest earnings report shows how it's one of the only restaurants that's actually winning right now. And Chipotle stock is a side of guac away from a record high. If you have to ask, you can't afford it. But before we hit those stories,

last week we told you about the hoarder's almanac. I want to check my calendar. Feels like that was T-Boy Tuesday. It was T-Boy Tuesday. While we're all staying at home, how have the things that we've all hoarded changed from week to week? Now we know you're thinking toilet paper. T. T.P. is so weak one. Hair clippers. and blonde hair dye was so week five. Turns out Jack's not a natural blondeie. Then we asked the Snackers, what is going to be the hoarded item for week six? And they were such good responses.

We wanted to feature them here, such as garden kits from Sandy 2 and 5. He or she is building up a lot of mulch these days. It's spring. It's a good time to try out your green thumb because you don't want to go to the grocery store. Then Athena said, hey, how about hand the lotion? Jack, I know this one feels you well. My hands are like leather, like rough gloves. I've washed them so many times obsessively.

I need some lotion. Honestly, Pueurel, come out with a combo. Give us the actual hand lotion along with the Puroreel. Like Skippies did those old peanut butter jelly combos. Yes, the peanut butter and jelly combo jar was wonderful. Better than Pop-Tarts. Best thing ever. What else we got, Jack?

Shawan Barber thinks dairy products in general are going to start flying off shelves because all the almond milk is sold out. You got to hire the Tiger King's Hitman if you want to get oat milk these days. Real thing. M.B. Jackson is spot on with his prediction of puzzle sales, which rose 370%. And then Troy Maxwell pointed out, press on nails and nail polish. Hey, you got to look good on Zoom. There's only one way to do it. You're not visiting the nail salon. And I'm impressed that a guy, Troy Maxwell, submitted that submission. Troy, treat yourself. Vanessa Snowbarger wants to stay fit during this quarantine. So she's trying to find dumbbells and kettlebells. I got an update for you,

Vanessa. You can't find them anywhere. They're sold out. There are no bells to be found. Those are great ideas from the snackers, but week six already happened. So why don't we tell you what actually was the hoarded items for week six? Turns out cookie dough sales up 44% snackers. Frozen pizza sales rose 243% last week. So Jack, what is the early takeaway for our buddies in week number six of hoarding? People are hungry and people are kind of lazy. Let's hit our three stories.

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Robberhood Financial LLC Member Fenra Slash SIPC For our first story Hey all you cool cats and kittens Netflix's earnings Show its long-term strategy

is working. The long-term strategy, content hoarding. We've been saying it for years, by the way, net leisure wear. Net leisure wear, this is Netflix pajamas just for watching Netflix. And I think Netflix is actually going to roll this out. Snackers, Jack and I have actually been saying this for years. Talking like 2016, I think we brought this up. You don't need pockets in these pajamas unless the pocket is for a glass of wine, because that's the only thing you're doing while Netflix. Reed Hastings, we know you're listening. Stop, ignoring our tweets, let's make Nick Leisure wear a thing. Snackers, we all knew that Netflix was benefiting from the Corona economy stay-at-home situation. But here's the shocker that hit us yesterday, just how

much Netflix is actually benefited. This past quarter, Netflix expected to add 7 million new subscribers to Netflix nation. No big deal. Seven million less than eight, more than six, nice number, kind of round, ends in a zero. Guess how many were actually added last quarter? Fifteen point. 0.8 million new humans are now Netflix andistas. That means Netflix nation is now 182 million strong. And Nick, those are just the paid accounts, like the credit cards linked to a Netflix account. Snackers, this is a safe space. Jack and I aren't going to tell anyone, we promise.

I'm not saying you've been using your brother's Netflix pass for years, but let's just say you've been using your mother or your brother's password for years. There are 182 million Netflix accounts, but if you include, the moochers and the password shares. Netflix is like the third largest economy on Earth. In the meantime, though, we noticed something interesting about Netflix. It's basically like your paranoid neighbor down the hall has been hoarding cans of corn back since 86.

You know how Netflix works. You walk in with a show idea. You pitch it to the production studio. I got an idea and it's about salad. Sold series, 12 episodes. Julie, call Reese Witherspoon's Asian. We got to get this in production. That's right.

Netflix has a reputation. for giving a show to whoever they want. Yeah. But among the bagillion shows that Netflix has greenlight, there's been some serious winners in there. Case in point, 34 million people watched Tiger King in just the first 10 days the episode was out. So, Jack, what's actually next for Netflix? Well, bear in mind, nobody's creating new TV shows right now because you're not allowed to work with other people.

No, but when we jumped into Netflix's earnings, we noticed two extremely important quotes that were about what's happening to Netflix tomorrow, which is what investors really care about. Quote number one, we benefit from a large pipeline of content that was either completed and ready for launch or in post-production by the time that filming stopped. And then quote number two, we expect to continue to be able to provide a terrific variety of new titles throughout 2020 and 2021. We've said it before, content is king. It always has been. And it sounds like Netflix has plenty of bingeable content stores. Even if the production lockdown continues for a while, Netflix has got you cover.

So, Jack, what's the takeaway for our buddies over at Netflix? For the first time, Netflix should be nervous about getting cheated on by bingers. Big word here, promiscuous. That's what Grubhub CEO called its own customers of the delivery app last year. You got Grubhub, DoorDash, Uber Eats, Postmates. You're just going with whichever one has the smallest fees and the best, like, sign-up promo code. And this is starting to look a lot similar to what's going on in streaming. So far, there haven't been enough alternatives for people to, like, ditch their Netflix account,

aka their brother's password. Hulu, Amazon, Prime, HBO, they've been around for a while, but it hasn't caused you to ditch Netflix. But unlike this exact day last year, Netflix suddenly has a bunch of fresh new competition that didn't exist before. Quibi, Disney Plus, HBO Max, which is a steroided out version of the old HBO, and then NBC's Peacock, this is intense. And they're all under one year old.

And in a recession, you're probably not keeping subscriptions to all seven. For our second story, Jack, whip your face out of that barbacoa bit over there. Chipotle is now an e-commerce burrito company. I think I have some meat stuck in my beard. It happens. Toothpics, they should hand them out. Chipotle's stock jumped 12% yesterday on an unbelievable earnings report. Meanwhile, this reminds us of a life lesson we all learn.

We always hear about, you know, there's no such thing as a free lunch. Gwock is always extra. Just remember that, Snackers. No matter what anyone says to you in this world, guac is always extra. During the corona economy, restaurants have been hit hard. It's been really hard. In fact, in one week in March, Chipotle sales plummeted like 35%. But over the last quarter, Chipotle has transformed itself into an internet-first burrito factors. Snackers, sit down, get up, and then sit back down when you hear these numbers. Digital sales surged 81% at Chipotle.

Online orders now make up a beefy 26% of Chipotle sales. Nick, I bet Meg, I bet Meg. Donald's has like zero percent of sales are taking place online. Half their sales are the cardboard and the happy meals. Now plus, CEO of Chipotle, his name's Brian Nicol, and he's the only guy in the restaurant business who was looking forward to the month of April. He literally said after the earnings, he thinks you're tired of home cooking. You want a burrito that doesn't immediately fall apart because no one can fold and wrap their own burritos at home properly. Plus, he didn't say this, but we think he's thinking it. Those stimulus checks, that's a hundred and 54.8 carnitas burrito bowls for 1,200 bucks. That's right.

1,200 bucks is 600 extra gux. It's also one-third of a lift these days. Now, he is so confident in Chipotle's business that he increased the hourly pay of the workers by 10% and he's given out bonuses to the people who have to commute into work for being on the front line and being out there during COVID-19. Meanwhile, by the way, Taco Bell's looking at all this and they're like, $1,200 is $1,200 of everything we sell. $1,200. $1.00. Now, what got Jack and I so fascinated with the story snackers is that all of this progress in April, that's thanks to the tech investments Chipotle made like it was a Silicon Valley fund. We've mentioned Chipotle lanes before, which is like a drive-thru lane, but for Chipotle.

What I didn't know until Nick just explained it to me was that there's no loud speaker box where he say, can I get a Chipotle barbecone with extra guac? Is this thing on? You order ahead on your app, and then you just cruise through when it's ready, grab your stuff and go, you don't even talk to anybody. Order for Jack, French fries, and free delivery. Suburban and rural snackers know this, but it's kind of a new news to me. I basically grew up in Central Park, and even I can appreciate how seamless these Chipotle lanes are.

Chipotle Lane is an incredible innovation to get the burrito in my belly quicker. Then they offered free delivery with no fee promos through Uber Eats and March. And the entire time they were doing that, they then started promoting their rewards program hardcore. The result, Chipotle, loyalists have quadrupled to 11.5 million strong. And get this, over half of them, are first time Chip, chippe, their easy secret menu at Chipotle according to Nick, you got to ask for the nachas. Also, pro tip, whenever you end up getting in line at Chipotle in the future, don't know not what you're ordering. Wink twice. So Jack, what's the takeaway for our buddies over at Chipotle?

One leader can completely change the direction of a company. Snackers in the last two years, before Brian Nicol took over his CEO, Chipotle stock fell 60%. Gua cost extra, but E. coli and no revires, those came free with every burrito back in 2015 and sickened a lot of people. Oh, and by the way, Chipotle ended up paying a $25 million fine because of that yesterday that they announced. In the two years since Brian Nicoltolluk over as CEO, the stock has risen 246%. And he's not a foodie. This guy's got classic Taco Bell origins where he worked at previously. He's walking around the office. He's like, at Taco Bell, we added sugar to the drinks. He's like still washing off the orange stuff from the Doritos Locos

Choccos that's all over his fingers. Chipotle can thank its recent success to new menu items like Caso, to Chipotle lanes, to the loyalty program, to quadrupling the digital business. That all was Brian Nichols' leadership. All you snacks challenge East does out there. It's time to turn around. We're a little over halfway through the pot. And for our third and final story, cord cutting has accelerated hard in the coronavirus. And AT&T is getting hit by a cable triple whammy. Before we even jump into this, what is AT&T? Well, glad you asked Nick, it's a movie studio, cable TV and internet provider. It has six TV channels and they're launching HBO Max this month. It sounds like one of those fake college applications where there aren't enough hours in a day to actually do this stuff. Oh, by the way,

they're launching nationwide 5G wireless this year as well. AT&T is super stressed out right now. They're cooking a dinner for six, looking after the baby, Instagram living the whole thing while keeping their core engaged throughout. Oh, and they've got a work meeting on Zoom coming up and they've got to do the whole thing before dinner's done. So AT&T's got a lot on its mind, including the first quarter earnings which came out yesterday and were ugly. Yeah, revenue, profit, and cash flow, all three were down.

We noticed a cable triple whammy at its experience. You got more card cut and happening. You got lower ad sales on its TV. TV networks and no movie or TV production is even happening right now. Right. So for that last part, future TV and movie business will suffer because they're not making them now. A key example of how you can see this problem right now, March Madness, was supposed to be big for AT&T. Literally didn't happen. Whole thing canceled. TBS, TNT, True TV. Three channels owned by AT&T, they would have broadcasted the majority

of basketball games, but didn't. First thing they got to do to save themselves a bunch of Bank, way too many T's in everything they own. Anyone else picking up on this? No pressure for this new thing called HBO Max. You have to make up for weakness everywhere else at the company. Again, AT&T owns HBO. And on May 27th, that's when you get Ross, Rachel, and the rest of Friends back. Sure, that's when HBO Max launches.

And Nick, I just counted the number of T's. Yes. It's too many T's. HBO now already exists. That's HBO's streaming network. and it's owned by AT&T because AT&T acquired Time Warner last year. HBO Max is HBO Now plus a bunch of movies and TV shows they didn't expect. Yeah.

Surprisingly, though, it's the same price, $15 a month as HBO Now, even though you're getting more. Jack, I'm shocked they're not charging us T bucks a month. And HBO Max officially launches on May 27th. So what's the takeaway for our buddies over AT&T and T and T&T? It's official cord cutting accelerated. Snackers last month, we summarized our accelerating trends here on Snacks Daily, which are things we predicted based on COVID-19 changes to society. Those were predictions, though.

We needed data to confirm whether we were right or wrong. And to confirm it, we look at the earnings reports, which we're now getting. That can help us confirm that cord cutting is accelerating. We figured that a lack of live sports would convince some people to cut the during this COVID-19 shutdown. Yeah, plus you probably want to save money. You're going to cut cable potentially. That's a lot of money.

Yeah, and we're in a recession. And guess what? The data confirmed it. AT&T lost over a million cable and direct TV subscribers last quarter. Get this, the number of cable users is 19% down from one year ago today. It is official. The cord cutting trend has accelerated in the coronavirus. Jack, can you whip up the takeaways for us over there?

Netflix added 16 million. users last quarter, double what it was expecting. Read, please so upset that leisure wear for your 182 million paid customers and your billions of mooters. Second story, Chipotle has transformed into an internet first burrito factory. I love that. CEO, Brian Nicol, he just wasn't living up to his potential Taco Bell. Our third and final story, AT&T, is facing a cable TV, triple whammy extra teas.

Cord cutting has accelerated in the coronavirus, so it's all up to HBO Max. to save TT&T. Now, for our snack fact of the day, this one sent in by Sydney, a 16-year-old snacker from Fuqua Verena, North Carolina. Sydney points out that Michelin is the French tire company with the creepy and adorable ghost guy as its mascot. And they're behind the Michelin Guide,

which was created in France in 1900, to get you to travel more, which would require more cars, which require tires. That's right. A tire company also makes a guide to the top finest restaurants in the world. The Michelin Guide is still produced today, and the Michelin Stars are the highest culinary honor, which, by the way, should go to the vinegree barbecue sauce of the North Carolina

foothills. Brian Nicol does not have Michelin stars. No, he doesn't. He does not. By the way, happy first birthday to Mina Wong, a future snacker and daughter of Jackie Wong. Jackie, you should look for Mina to start whipping up the takeaways about 14 months of age. It's in chapter eight of what to expect when you're expecting. You probably just missed it.

To everyone else, please share your favorite bites from me. Today's snacks with your friends or on social media because it helps us grow. Can't wait to see you tomorrow. By the way, this is Nick and Jack owned shares of Amazon and I own shares of Chipotle. 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, 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.