The Best One Yet - “Harley-Davidson’s done with Millennials” — HOG’s 22% surge. Postmates does everything. 3M’s 55K products.

Episode Date: October 28, 2020

Harley’s stock popped 22%, but we think its new business strategy is a short term sugar high. Post-It creator 3M has sold 1.4B facemasks this year, but the pandemic stock is down mid-pandemic. And Postmates has a new delivery strategy: Deliver Everything.$HOG $MMM $UBERGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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, October 28th. The Dow took another spill yesterday because of COVID and election uncertainty. And you don't even know what you're doing for Halloween. What are you going to wear, Jack? Is this the best one yet?

This is a T-boy for our first story. Harley Davidson stock jumped 22% yesterday, but we're going to call it like we see it. Harley, you're doubling down on boomers and Jen X. You hate millennials. Just say it. We can feel it. For our second story, Nick, you know those N95 masks? No, I'm well. Got one on my face right now.

No, I don't, I don't. No, that would be a great pod. That would be a socially distant pot. 3M makes them, and they're on pace to sell $2 billion with a B this year. So Jack and I jumped in snack style. 3M seems like it's built for the pandemic. So why is it stock down in 2020? For our third and final story, Postmates,

kicked up the food delivery wars by like six notches yesterday. Delivery salads, no. Delivery, everything. I'd like a salad, a toss out with a side of everything. Only everything, hold the nothing. But Snackers, before we jump into all that good stuff, now before we jump into that wonderful mix of stories, a lot of Snackers have asked us the simple question, which one of you is Nick and which one of you is Jack? The answer is simple. Yep, this is Nick. And this is Jack. Yeah, and that's that's the number one question. But Jack, what would you say to like the second most asked question of us is? The second most asked question Snackers ask us is,

what's the story behind the Snacks Legal Disclosure rap song thing that everybody's about to hear in about 30 seconds? So to understand the origin of that, we've got to travel back a year and a half. Jack and I had just sold our startup market snacks to Robin Hood, and we were in Menlo Park discussing our relaunch as Robin Hood snacks. We're in a conference room with like 10 or 15 other people. All of the Crois and our ex-bars in our hands.

Wonderful. And we decided before we launch, we have to get some legal out of the way. Actually, the lawyers jumped in and they said, you guys are contractually obligated to get some legal out of the way. Yeah, they're like finance is serious. So we need a disclosure at the beginning of the podcast. So we're thinking, where do we stick this disclosure somewhere, somehow in the podcast? We were like, the beginning? And then one of Robin Hood's co-founders, a guy named Bejou had a great idea. Yeah. He's like, remember what Virgin Airlines did with that TSA thing? Yeah, Richard Branson basically turned that annoying TSA safety thing into a theatrical Broadway-esque,

Manuel Miranda directed show tune. It's like quite a show. You may have seen it if you ever sat in 23F. Also like Delta and American Airlines, they've done copycat versions too. So we decided to steal like an artist on this and do something like what Virgin did to the health thing on airplanes, but to the Snacks Daily podcast legal disclosure. Put on your headphones before you help someone else put their headphones off. So we called to have a music company in LA and we said we need these four legal terms in a jingle. Snacks Daily is not a recommendation. It's not a research report, nor is it investing in advice. And it's not an offer or sale of a security. So what can you do with that? So they whipped up multiple versions with a couple different rappers.

It was great. It was less Wu-Teng Clan, more chance the rapper. And now that jingle is part of this podcast, and it's played on over 300 Snacks Daily, best ones yet. There's the story Snackers. Second question answered, first question answered. Which leads us to a takeaway here? Robin Hood is a pioneer of commission-free investing

with a beautifully designed app. So Jack and I are pumped that we can get Snacks podcast listeners if you set up an account a free stock from Robin Hood on the Robin Hood app on us. This app gives you access to commission free investing, cash and spending account and more financial news like the Wall Street Journal and CNN. And you can download the app by going to Snackspodcast.com to set up your account and get that free stock. By the way, if you already have the app, you can still get a free stock if you share Robin Hood with a friend. So go to Snackspodcast.com to get your account and Robinhood.com to get your free stock. free stock? This is not an offer of a sale of a security. Let's get out of three stories. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal

out the way. The snacks about to hear 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. Robberhood Financial, LLC, member Fenra. slash SIPC For our first story Harley Davidson stock just surged 22% yesterday

And it all comes down to Harley Completely hating millennials That's pretty simple Now Jack I'm looking at our whiteboard here There are like a few things Only a few we've seen fall for five straight years Yeah cereal has kind of fallen out of flavor

For five straight years It has yogurt sales They fell for five straight years in a row too And what's final Incredibly loud, extremely hot Harley Davidson motorcycles. That's right, five straight years now, Harley Davidson's sales have fallen, which is why the new CEO, Yoken Zaitz, has whipped up this five-year turnaround plan. The man is a blue-blooded German executive coming from Puma, where he worked for 18 years.

And Yoki, can we call you Yoki? We're going to go with Yoki. He's famous for not only now leading Harley over the last year, but also he likes live streaming behind-the-scenes stuff going on at Harley-Davidson. Somebody set up Yolkin Zites with a webcam, and he's like, check out my webcam. I'm going to broadcast like the strategy meeting. Boom, Yoki pulls out a ballpoint pen filling out those TPS reports. Harley Davidson promoting that material.

But what Yokin's really into at Harley is cost cutting. Yes, he is. He just laid off 10% of the workers and Harley is leaving 56 countries, including India. He doesn't think they're ever going to make a profit in India, so they're getting out. And when he's not cutting cost, Yoken loves optimizing revenues. No more discounting of Harley-David. and prikes, you're paying full price. They're not doing the old Jay Crew playbook where it's like, oh, khakis, again, 30% off.

It shouldn't be an email that catalyizes you to buy a Harley. You add up all that cost cutting, that optimizing revenues. Jack, what was the result in the latest earnings? Sales shrank by 8% last quarter, but they somehow squeezed 40% more profit out of those smaller sales. We're talking the highest profit for Harley Davidson in five years, ipso facto, the stock jump 22%. But we noticed something a little sinister. Nick and I did, as we read through this earnings report. Yes, we did.

I'm smelling some anti-millennial bias from Yolken Zites. And that's because Jack and I are looking at the previous CEO, who added 100 new, smaller, and cheaper bikes to Harley Davidson. The previous CEO wanted my business. So he served up some bikes that were less American-style lager, more fruity-style spike seltzer Harley. More raspberry, fewer hops. Guess what?

Yolken Zites, the German CEO. He's cutting 30% of those new bikes that the previous CEO rolled out to get to millennials. The old CEO was pandering to us desperately, and we kind of loved it with cheaper and like even an electric bike they came out with last year. The key for the millennial focus bikes was don't have them be incredibly loud. Yeah, we didn't want offensive. But the new focus for Harley Davidson, they want to only think about the 10 old big bikes that drive two thirds of their sales.

Harley doesn't want to water down their brain, which they think the old CEO is doing. He wants Harley to mean big, expensive, loud, chopper bite. If you're not motivated to tattoo it on your left bicep, then it's probably not worth being a Harley thing. One dealer summed up the new CEOs changes with this. The brand is getting back to what we've always been. The new Harley Davidson's undoing the previous Harley Davidson to go back to the old Harley Davidson.

So Jack, what's the takeaway for our buddies over at Harley? Harley's going for a short-term sugar high instead of long-term nutrition. Snackers, in the short-term, this cost-cutting, plan rewards Harley's shareholders with a nice short-term profit boost. For now, sales of Harley's old school bikes are expected to stay up because boomers are hitting the road during COVID with like beautiful joy rides and road trips. No joke, Jack, my dad calls me up every other day. He's been on the Harley. He goes into town. You know what they call him? Mad Mike? Mike on the bike. This strange COVID moment where people are traveling locally instead of getting on planes,

it happens to align with Harley's strategy. But long term, millennials don't. want Harleys, it looks like. And this new strategy doesn't address that major problem. Younger riders are choosing Harley's competitors like Polaris and Iker. So this new Harley's strategy, it's a short-term sugar high win. But the big long-term problem of not connecting with young riders, that remains unsolved. For our second story, Postmates is the first food delivery app now, taking the full plunge into everything. Postmates, we're calling Uber's GPA. It's a guinea pig acquisition. That's right, because Jack and I, we know our geography well. Chicago does logistics. Scottsdale does self-driving car experimentation. And Los Angeles County does food delivery innovation? Can we go with that?

Apparently, because last year, we told you about Postmates' adorable little delivery bot. Its name is served. It was adorable. It kind of looked like Wally with a new paint job. Roll in the streets of L.A., basically like dishing out pad tie. It was wonderful. I would love if a snacker could send us a picture in the wild because I haven't seen one yet. No, we'd love to see that. Please, at Nick of New York, at T-Boy Jack. In the meantime, though, Jack and I noticed that Postmates is expanding to full one-hour delivery of anything through the app. This was a three-step master plan, and it started Sunday during the L.A. Rams NFL game. That's when they began promoting on Postmates, this new Los Angeles Rams pop-up store during a commercial

because you just got to get that new Jared Goff jersey within 40 minutes while watching the game. I think there was a commercial on Fox and push notifications to everyone in the LA area that had the app download. It was aggressive, so instead of ordering pizza, you're like, wait a second, I can use Postmates for a little something more. And if you end up buying that Jared Goff jersey, you're wearing the jersey on top. You want to wear like some nice outdoor voices sweats on the bottom. Yes, you do, which then led to step number two, which Postmates just announced last night. LA residents who open up their Postmates app are going to discover a new tab called shop. And when you click on that new tab called Shop, you're going to see a pretty diverse group of brands here.

You got Estee Lauder, you got Parachute Home, you got Buck Mason Men's Wear, it's a wide group. This is like a shopping mall. You got home there, clothing there, health in that corner. Even vinyl records have been curated on this app. But the shocking thing is this is all going down on a food delivery app. Just like Postmates gig delivery people can go to a sushi place and bring it back to you. Yeah. They can also go to your show.

shoe place and bring it back to. Yeah, now you're getting sugar fish and the shoes if you know, you know, in LA. Step three of the Deliver Anything Master Plan at Postmates. This hasn't happened yet, but they've said it could happen and we think it has to in order to retain customers. Flash, sales, and exclusives on the Postmates app. By the way, Jack, this is so L.A. Everyone's in perfect shape. Weather's incredible, but you have to have everything delivered. The logistics elephant in the room. Yeah. How can they compete with Amazon? It's the big thing. It's the big thing. Everyone's going to want to know. Every investor wants to know. So Jack and I think it comes down to two big value propositions from our buddies over at Postmates. Advantage number one over Amazon,

speed. This is an instant gratification tool. Classic situation here. You're hanging out. You wake up Sunday morning. Boom, dog accident on the sheets and your washing machine's broken. Jack, what are you going to do with these things? Postmates yourself a king-sized sheet set from parachute home. An hour later, you got a thousand thread count. Rivers happy and you can get back in bed. Well, look who just made Postmates a verb. All it took was one snack story, Jack. Advantage number two over Amazon, curating small businesses. Yeah, you're not going to be using Postmates for like power cords and batteries,

although you could. You're probably going to go to it for the local shops off Venice Beach. Postmates has curated a bunch of cool companies and cool brands on the shop app, so it's a little different than Amazon. It's part of the broader anti-Amazon alliance. We heard this story, and we had some flashbacks to 2016. Didn't Uber Eats launch something called Uber Rush, which was basically this, deliver anything within New York City? It was exactly that, Jack. I tested out the one-hour delivery window when I sent Molly some frozen cookie dough from the West Village all the way to Dumbo Brooklyn.

Did it melt? It did not melt. Uber Rush worked, but they shut it down. So Jack, what's the takeaway for our buddies over at Postmates? Postmates is Uber's GPA. It's Guinea Pig acquisition. Snackers, Postmates in 2020 isn't the same as Postmates in 2019. because it was acquired by Uber in July for $2.7 billion. Postmates was the smallest of the big four delivery apps, and it dominated just one market, Los Angeles. And that means Uber can now treat Postmates like a one-city-sized laboratory, kind of like the Truman Show situation. Uber's basically trying again here with Postmates to deliver everything

so they can learn where they failed to do it themselves in New York five years ago. And then they can adopt the best practices, apply that to Uber Eats and Uber, and then take on Amazon Prime nationwide through Uber. Postmates was acquired to gain market share in the food delivery wars and be a guinea pig for some experimentation. For our third and final story, 3M's products are perfectly suited for the pandemic, and yet its stock is down again.

The curious case of Minnesota's most famous company. That's right, we've got to talk about Minnesota mining and manufacturing company. They abbreviated the name to 3M for obvious reasons, and they snag the ticker symbol M.M. So your buddy from high school who comes back to the unit, it's like, it's not Robert anymore, it's bomb. This company is famous for inventing the Post-it note and scotch tape. Honestly, 3M basically keeps your whole office together. And they're a company made up of chemists of factories. That's the core thing.

That's what 3M does. In 1972, those chemists invented the N95 mask in those factories. You know, the mask that blocks 95% of particulate matter in the air from getting in your lungs. And 3M just updated us on this wild statistic. It has already sold $1.4 billion N95 masks this year. That's enough to cover a fifth of the world's population in N95 masks. By the time they're singing old Lang Zine, they'll have sold $2 billion N95 masks, Nick. I love what you did there.

In the meantime, though, N95 masks are pretty expensive for the rest of us. Yeah, they're expensive, which is good for 3M. In fact, Amazon won't sell you a 3M N95 mask unless you somehow prove to Amazon that you're a healthcare or frontline worker. You do some multiplication, that 1.4 billion times a nice little price tag on Amazon, and you find out that $235 million in extra revenue came to 3M courtesy of these N95 masks. And despite that huge bump from N95 masks, revenues overall of 3M only rose by 4.5% last quarter. So when they reported earnings yesterday, Jack and I noticed the stock actually fell 3%. 3M looks perfectly suited for the pandemic, and yet it barely grew sales last year. So admit Jack and I had to jump in snack style, we got curious, and we found out 3M, you know, it's basically 3M's, but four divisions.

It should be 4M. It should be 4M. You got health care, safety and industrial, transportation, and consumer, Jack, what we got first. Healthcare is the division that has medical supplies for hospitals like gloves and robes. Yeah, then you get the safety in industrial. That's like home to 3M's N95 M. You've got the roofs, the insulation, the stuff around your home you don't see. The consumer stuff you do see.

Scotch tape, Elmer's Glue, Post-it notes. And then finally, you got the transportation and the electronics division. These are parts behind the scenes in airplanes, ships, cars, and television. Now, the first three of those divisions were COVID winners. Pretty clear. You know, safety and industrial health care, that's going to win in a pandemic. The last one is the only one that seems to be suffering from the pandemic because, you know, Boeing's not making airplanes for a year.

a half. Yeah, yeah, not bad. Their biggest client is just not doing its thing. And despite three of its four divisions being clear COVID winners, 3M stock is down 17% this year. It's a curious case. So, Jack, what's the takeaway for our buddies over in Minnesota at 3M? How the global economy goes, so goes 3M. Snackers, the most important thing the 3M CEO highlighted in his outlook for next year, GDP growth. If the world's economy is growing, they will need 3M materials. If we're building stuff windy, 3M materials. These chassis are going to need some scotch tape. N95 masks were a really nice

COVID bump for 3M, but that is just one of the 55,000 products that 3M sells. They make 55,000 products in Minnesota. 3M is so diversified it's got products coming out of its ears. And without the economy growing overall,

the sum of 3M's parts simply won't grow. Since the global, economy has shrunk in 2020, so has 3M stock price. Jack, can you whip up the takeaways for us over there? Harley's new CEO has decided they're done trying to make millennials like them. Okay, okay for now, but at 10 years, going to be an enormous problem. We're just saying that. We're putting that out there.

For our second story, Postmates is delivering everything in one city. Its pair company Uber is guinea pigging Postmate Snackers. If you do this in L.A., send us the picks. For our third and final story, 3M's got three divisions that are clear COVID-W He's got 55,000 products, which feels like 50,000 too many in a growing global economy. Now, time for a snack fact of the day. This one tweeted in by Chris Tong in lovely San Diego, California. 7.8 billion human beings are living on planet Earth right now. But if you go back in history, there are 109 billion human beings who've lived on this planet ever. Because remember, human beings

only appeared on this earth at the beginning of your fingertip. You know what I'm talking about. I have no idea. In the meantime, though, Jack and I did a little math here, and that's 7.2% of all people who have ever lived on Earth are alive today. 7% of human beings ever are still living today. Snackers, you look fantastic today. We should do this again tomorrow. And let's do it with a couple of your buddies.

We're giving you permission to give a plus one. Tell them, H-Y-H-Y-S-D. It's not a question, it's a command. Have you had your snacks daily? Nick and I are plus one ourselves. and we'll see you tomorrow. We're going to get a couple people. If you know, you know.

And before we go, be congrats to Snacker. Levi Stein just became a certified personal trainer down in Nashville. If you need a spotter, hit up Levi. And Ed Lee, he could help spot you because he's just got his first job over at Bing. And happy birthday to Amy Ney in Shanghai, China. And to Sergio Alvio in Stockholm, Sweden. And Sam Colimo in Nairobi, Kenya. And Gabriella Hernandez in Havana, Cuba.

And Dinesh Samar in Melbourne, Australia. And happy birthday to Anna Perez in Coachella, California. and Andrew Smelzer in Iowa City, Iowa, and Evan Weiner in New York City, and Taylor Bridenbrook in Brownsburg, Indiana, and Luca in Chelsea, Michigan, and Nico Tarina in Portland, Oregon, and Maddavona in Pittsburgh, Pennsylvania. And congrats to Melissa and Ariel have been dating for four years in New Haven, Connecticut. And congrats to Matt and Patrick Savage two years over in Omaha, Nebraska. And big ups to the Hedgelands, who are celebrating an anniversary in Norristown, Pennsylvania.

This is Jack. I own stock of Amazon. The free stock program is subject to certain limitations and the offer is available to new users only subject to the terms and conditions at RBNh.co slash free stock. Free stock is chosen randomly from the program's inventory and of course, investing is risky. Other fees may apply to your brokerage account. You can check out Robin Hood's financial fee schedule at RBNh.cd.c.c.com slash fees to learn more. 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 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.