The Best One Yet - Dunkin’s grand slam game plan, Apple’s wearables, and WWE’s 16% stock drop

Episode Date: November 1, 2019

Dunkin’ shares popped 6% after it spent the last 3 months amping up its 4-part game plan for fast food innovation. Apple’s earnings revealed that it’s becoming a wearables company, powered by AirPods and Apple Watches. And World Wrestling Entertainment stock plummeted 16% as its Middle East TV dreams get crushed.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 is Friday, November 1st. Yeah. I don't know what's going on over here. I guarantee you, Snackers. You have not heard these three stories in one podcast together.

Also, this happens to be the best podcast. We have ever put together. And if you find another pod with these three same stories, this sounds bold. You get to contact us and you get to pick a story for our podcast. We did not discuss it. I don't know. What's the first story?

I sound in truth. Duncan Donuts shares jumped 6% because it hit the, Fast Food Grand Slam. No, Ma, this is the new playbook if you want to food fight. Second story, WWE, World Wrestling Entertainment. We entered the squared circle to figure out how its stock dropped 16% in one day. Is that an Octagon? By the way, this company is based in Greenwich, Connecticut, the hardest core thing in Greenwich, Connecticut. Leave the Vineyard Vines at home. Is the WWA. It's shocking. Third and final story. Apple isn't really an iPhone company. Can we call it an AirPods company now? It's probably still an iPhone company. Yeah, technically, if we look

for the numbers. But we found the most interesting element of its earnings from yesterday. We can't wait to jump into this. We're our balls. That's it, one word. Snackers, before we jump into that, we've got to talk about the greatest, I'm sorry, the biggest name, I'm sorry, the biggest just general pivot, chain switcher we have ever seen in the beer industry. This is another midlife crisis situation. Molson Coors changed everything this week. Like overnight this situation. Now, to be clear, Molson is a Canadian beer brand. Coors is, you know, born in the Rockies. Well, they just moved their headquarters from Denver, Colorado to Chicago, Illinois.

Pretty sure that Denver's mentioned in, like, every single advertisement they've ever done. Chicago has nothing to do with Canada or with Denver. Does this mean, like, the blue can situation's going to have to change? I think so. Or also letting go, unfortunately, of hundreds of employees. And they're changing their name from Muls and Corr's. Two. Which means Canada and Colorado.

Which, they're changing it to. Mulsincor's beverage. It's kind of simple. We don't know what they were doing there. Also, Chicago, we just mentioned, I promised Nikki, who hit us up on Robin Hood Snack's Instagram. Yeah. We made a mistake last week, now. Technically, Nikki.

Great name, by the way. We should have mentioned that Chicago's bars are open a little later than we thought. Last week, we only gave credit to New York and Las Vegas for having bars that are open beyond 2 a.m. Turns out Chicagoers enjoy drinking at like 4 a.m.? No. 5 a.m. on Saturday nights. Aggressive. But Boston's still in bed by midnight.

We get it. Moulson Cores. In the meantime, good luck with the mid-luck crisis. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It snacks about to hear anything. They don't reflect the views of the Robin Hood 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 FINRA slash SIPC. For our first story, Duncan Stock just served 6% because it hit the grand slam of past food. Nick, since Duncan dropped the the donuts from its name.

I think what you did there is that. The stock has tripled over the last five years. Let that thing. And it's not just Bostonians who are like getting the dunk. Actually, this company is based in Canton, Massachusetts. Wonderful town, gray side of the state. I remember, you know American runs on Duncan? Yeah.

When I was in Berlin, they had the same ad campaign. It was weird. Pretty sure it's aggressively international. Now, what Duncan is doing right now, Jack and I jumped into the earnings report, snack style. We noticed it's a four-part game plan that's a grand slam. First, premium items. This is what they're focusing on. This is what they did last quarter.

These are items with names that make you think you have to pay more for them. And you end up paying more for these things. Like Cold Brew. That's the name that was dropped multiple times in Duncan's earnings report. It's just like iced coffee, but more expensive. And you get to say not, oh, I need my coffee this morning. What you say is, I need my cold brew this morning. So cold brew, annoyingly, was an outperformer for dunk.

Technically. And you'll lose the, you know, the barista can't do their foam art in the latte stout. Well, that's a cappuccino. You'll lose that. Also, they don't do that at Duncan. No, they definitely don't do that at Duncan. But what you do get is when you get the cold brew, you get like that kind of hurricane effect of like the oat milk drizzling down. It's kind of pretty.

To each his own, Nick, to each his own. So the second key to this earnings report was breakfast. You know it just launched a Beyond Meat Breakfast sandwich. Exactly. And this thing did, according to the CEO of Duncan, quote-unquote exceedingly well. It only tested in New York City, which is a bizarre test market.

That's not exactly a cross-section of America. They actually addressed that and said, we know, we know, cross-section. What they said was, but it's a place where you get a lot of buzz. That's true. And now it's going nationwide,

starting November 6th, which is Wednesday. The other innovation they did on the menu was they came up with something called go-toes, like literally go-toes. Such as? Like, you got like a croissant-bacon situation, not exactly your beyond meat,

plant-based meat sandwich. In New England, it's pronounced chrasanwich. New England, it's pronounced, breakfast. The third thing that they focused on was a digital loyalty program. Duncan bragged that 25% of its transactions, one out of four. Yeah.

Was digital loyalty like QR code on my mobile phone? In some of their markets. Not in all of them, just in some of them, which is a pretty high amount, pretty high percentage. And it also has this dynamic innovation. They're giving away dynamic reward points depending on the product. All right, so this is how it works. Let's say you're curious about their brand new cold brew that they just released last quarter. Well, if you happen to not be like a very good Duncan customer and they want to like

really get you involved, maybe they'll offer you more points in the app if you go. So you remember those old cards? You needed to get 10 stamps to get the free sub. And if you were like friends with the person behind the can, there was a little click click double for one item. If you had an inside hookup, that was a big deal. Always a good thing. But Duncan is basically giving you two stamps for certain beverages they're trying to push. Now those three things, premium items, breakfast and digital loyalty program, those were mentioned in the earnings. But one area wasn't really mentioned. which we think is the fourth element of this grand slam. Delivery and pickup.

Now, technically, you kind of got to have this if you're a fast food restaurant these days. It's a trend for sure. However, who's getting breakfast delivered? Not sure. This is kind of a lazy move. I mean, room service at a five-star hotel, that's about it. We get that. We get that.

But technically, Duncan has partnered up with Grubup, so you could do it if you needed to. So, Jack, what's the takeaway for our buddies? Duncan over at Duncan. This is the new playbook for fast food. This is it. If you're going to be in fast food, you've got to be hitting the, four things. Pickup and delivery. We know Chipotle is testing pickup and it's already got delivery. Premium new items. We know shake shacks all over this because full disclosure, Jack and I were

crushing in on some fried chicken sandwiches the other day there. Yeah, and people love paying like a little more. They feel fancy. And when it comes to like loyalty programs and loyalty apps for payment, Starbucks is the second biggest mobile payment platform in the United States. If you don't have a loyalty program, I'm like, where are my points? It's like flying an airline that doesn't have frequent flyer miles. And if you're a fast food restaurant, you are being eating. evaluated on these four elements of the Grand Slam. Convenience, tech, that's how you win fast food. Beautifully, by the way, this is Nick and Jack and I both own shares of BeyondMe.

For our second story. Oh, those are those? That locks. I got Jack over here, a little kind of a... It's called a Full Nelson. Pin down. We're covering... Full Nelson.

W.W.E. World Wrestling Entertainment. The stock just got destroyed because a new deal in the Middle East. The TV deal is canceled. Oh, no, it's delayed. You ever heard of Stone Cold Steve Austin? That's pretty much the only rest I've ever heard of. 16. 316.

Something like that. He's actually a big Coors-like guy. Technically. Now, the stock got leg-dropped. I had no idea what that means. Nick, a leg-drop, you don't want to get leg-dropped. Sounds like it hurts. The stock fell 16% yesterday after the third quarter earnings report.

Revenues did fall just 1%. Profit, though, got cut by like two-thirds. We're talking big numbers down. And body slams were up 32%. That's not in the earnings report. That is an estimate by us. Now, WWE, it actually has a very clean and simple business model. If you check out the earnings report, it's straightforward.

You'll see it has media, which is like streaming and TV. That's straightforward. It's got live events, which is tickets to like the Springfield Convention Center. Totally can picture that. All right, that's straightforward. For WWE, like, Monday Night Raw. All right. And it's got consumer products, which is like the action figures I grew up playing with as a kid.

It's merchandise or is like your one friend in marketing likes to say merch. But growth for WWE is all about the Middle East actually. But there's some problems over there. We're not talking geopolitical. There are actually some, like, WWE problems. Before we get to the Middle East, we're impressed that WWE, it has its own online streaming network. This surprised Jack and I in the earnings sport, because having your own streaming network

is a really big deal. WWE is actually doing the HBO strategy. It's got both cable and, you know, for the cord cutters streaming. Now, the thing with cable is, you know, it's going to stay on TV. It's going to be on, like, channels like USA or Fox, which is pretty straightforward. You get exposure to a lot of people. And WWE makes money that way. But for the cord cutters, they have this thing called WWE Network 999 per month.

Now, the difference here why this is so important is that having that streaming network is pure profit for WWE. It cuts out the middleman. It's going directly to 1.5 million WWE network subscribers and getting $10 a month. That's like an ATM machine. They're taking that money. They're sticking it in a leopard leotard, and then they're just walking around flaunting the thing. This is beautiful. Here's the thing, though, in the earnings report yesterday, subscribers to WWE network fell by 9%.

That is a shockingly large number, which we don't really have an explanation for it. It's a red flag. I mean, streaming, that's the future. You don't want to see your future profit puppy falling. It's a fundamentally bad sign because it means people are canceling even though that happens to be their most profitable area. So, Jack, what's the takeaway for our buddies who are real, definitely not fake at WWU? Good call. WWE has great content.

Now it's trying to sell it overseas. And taking a uniquely American thing, that international is hard. Yeah. We're talking about scantily clad men and women. We're in very tiny nothings full of muscles and no body hair. That is a hard story to sell in the Middle East in particular, which happens to be a really big market where there would be potential. It's trying, though. In fact, it announced yesterday it has delays in its TV deal with the Middle East.

Now, the problem there is that if WWW were able to get to the Middle East, this would be another example of leveraging what it already has to gain a lot of potential profit. It's got Smackdown. It's got WWE Monday Night Raw or whatever. It doesn't have to create new stuff. It just has to get its stuff to a new place. And if it can get new subscribers in the Middle East and North Africa, what's it trying to do now, that's just pure revenue with no extra cost.

But when it comes to the most recent earnings, analysts are just worried this deal may never actually happen. For our third and final story, Apple is no longer an iPhone company. You've seen that headline before. We've all been there. That's not an original take. Nope. It's becoming a wearables company.

iPhone sales fell by 9% last quarter. How many times did you see that headline yesterday? iPhone sales are falling. Because your iPhone's incredibly good and you don't need to replace it. But Jack and I jumped into the earnings report, snacks out, and we thought there was a key storyline that hadn't really been told. Wearables, home, and accessories. That is one of five Apple revenue categories.

And this category is surging for Apple. It includes the Apple Watch. Okay, cool. Apple AirPods. Very interesting in your ears. And the HomePod, which somewhat. I think has bought. I literally have never seen one of one of my friend's houses ever at all. Let us know if you have. It was the second straight quarter of 50% or more sales growth in that category. Let that

sink in. We're talking about wearables. Things that are on your body, they grew by 50% again. Nick, you're ready to be floored? Jack, can you hit me? I'm already barely standing right now. In the last 12 months, this category had 24 billion of sales. That is almost as much as Starbucks, the whole company. I was dropped just now when I heard that. Starbucks is like as Fortune 500 as it gets. Jack, you just messed with my life. Can I mess with your head right now? Get this. The business of wearables at Apple

is almost as big as Apple's Mac business, as in the computers we grew up associating entirely with Apple. It's also bigger than iPad. This is insane. People, if you need a minute to relax, let us know we'll take a quick break. All right, and we're back.

The key here for Apple, though, isn't just that its wearable sector is crushing it. The key here is that its wearable sector has room to grow. Well, it has the services sector too, which is, you know, those monthly five or $10 month subscriptions you have with Apple. But there was an interesting stat in the earnings that really caught Jackson's in my eye. It's that three out of four Apple Watch users, so one of those key wearable products, are completely new to using Apple Watch. So remember like 10 years ago when people were getting their first iPhone? Yeah, like what is this? It was like a game-changing thing.

Oh, you have the iPhone. No more Razor. Apple's trying to tell us here that they're at the same moment, but for a different product like Apple Watch. Exactly. And not only what, with Apple Watch. They just announced that new AirPods Pro that's like noise canceling. It came out on Wednesday. You know it well? Yeah, it's a crazy product. It's an insane product. It's $90 more than your usual AirPods. 250. Well, not only are they selling this new product. If you were worried this may cannibalize or eat up sales of regular AirPods, Tim Cook, CEO of Apple, doesn't agree with that. He thinks this new AirPods, which is noise canceling, is going to be a complement of the other AirPods. He wants you buying both AirPods, the non-noise canceling and the noise canceling. I'm

calling Tony Bologna on this one. We were not into what Tim just said. Yeah, I already have AirPods. They're incredible. I'm not spending 250 for more expensive another AirPods. But Apple saying, hey, you know what? We think you will. So, Jack, what's the takeaway for our buddies over at Apple? Your body real estate is what Apple wants to own. We're thinking John Mayer here, it's a Wonderland situation. Your body is a Wonderland. And that's why Google earlier this week hinted that it may acquire Fitbit. Apple loves being on your wrist and Alphabet wants to be on your wrist too. So much so that they actually made an offer for Fitbit. And you know what?

Fitbit is actually a pretty affordable way that Google can get into body real estate with tech. Fitbit's market cap, which is all of the value of all of the shares of Fitbit that exist, is $1.6 billion. That's like one sixth a fraction of a lift. So Google could buy all of the shares of Fitbit and own Fitbit for like $1.6 billion. And that would immediately put it in competition with Apple and finally get a place in real estate on your body. That would be a cheap way for Alphabet to access your body 16-7. Not 24-7, we know. Yeah, put your thing in do not disturb mode and let yourself go to sleep.

Get a good few hours of sleep on that. It could be your health buddy, your text buddy, or call buddy, your app buddy right on your wrist. If Google doesn't get in, Apple's clearly all over wearables. Jack, can you whip up the takeaways for us before the weekend? Duncan's stock is close to a record high because convenience, premium, and loyalty. Dropping the donuts was also the right move in addition to that game plan. WWE is banking on Middle Eastern growth, but it might not happen. By the way, WWE just hosted its first ever women's fight in Saudi Arabia, cultural groundbreaking there.

It really is. Insane. Third and final story. Apple's wearables business is almost as big as Starbucks, the entire company. And that's why Alphabet's trying to get in on that and maybe acquire Fitbit. Now, Snackers, before we jump into the weekend, before we leave you guys, a snack fact of the day to end things. Yesterday we talked about Twitter banning political ads. Right.

And we basically pointed out this put a lot of pressure on Zuck, so Zuck kind of decided to respond today. Well, Facebook actually had their quarterly earnings two days ago. Exactly. And right when this Twitter news came out, Zuck was defending himself to investors. And he pointed out that only 0.5% of Facebook's revenues next year, the big campaign year, will be political ads. It's still basically like trillions of dollars. It's still a lot of money. It's not actually trillions, but it's a lot.

But that's a small percentage. Teeny. suggests that Facebook is allowing political ads, not for the money, but actually for like his free speech argument, which I still disagree with. Agreed. Now, Snackers, before we go for the weekend, we got to say, milk was a bad choice. You might want to check out Robin Hood Snacks on Instagram, because we wore Halloween costumes yesterday.

You're going to want to see this. You know I don't speak Spanish, Baxter. Bark twice if you're in Milwaukee. We'll catch you guys on Monday. The Robin Hood Snacks podcast you just heard reflects the opinion. 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.