The Best One Yet - Jack Daniel’s $125M tariff bill, Bird’s new scooter targets “THICs,” and GameStop’s 36% plummet

Episode Date: June 6, 2019

Liquor legend Brown Forman just revealed that fresh tariffs from the EU on American whiskey is costing the Jack Daniels owner $125M per year. Scooter pioneer Bird has a new bike option that’s blatantly targeting “THICs” -- Town-living High Income Car-less people. And GameStop falls 36% because it’s trying out the Barnes & Noble playbook.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, June 6th. And, Jack, what are we thinking about this one? This is the best one yet. Ready to go. Let's do this.

We're talking straight up T-B-O-Y. Markets feeling the vibes, too, Jack? How did markets do? Markets inched up. They're still honeymooning from yesterday's positive signal from the Fed that the Fed's got markets back. I'm feeling the honeymoon vibes. Three wonderful stories.

This is like a serious mix. This is your meat, potatoes, a little bit of carbs, little veggies. What have we got today? We're starting it off with Jack Daniels. Pour this one out for Jack Daniels. Be careful of your shoes when you pour it out, but still pour it out. Jack Daniels owner, Brown-Forman, just revealed to the world how much the tariffs from Europe are going to cost it. And that's $125 million.

Jack, I've said it once. I will say it again. Good thing you and I are Cosmos guys. Second story. Game Stop stock fell 36%. Love it. Say it five times fast, Jack. I could barely say it twice.

I could barely say it once. It's following. The Barnes & Noble playbook, though, which is a big concerning. We are not sure that's a playbook you want to open up. It's not an e-book. Our third and final story starts with $6,570. Ooh, I like that. That's the value of a New York City parking space.

It says a lot about our unicorn of the day and their brand new product. We're talking about Bird, the e-scooter phenom. Very nice. Another key number that we got to talk about today. 75. Jack, what are we talking about? 75 years since D-Day, which was June 6th, 1944. We're talking about the turning point of turning points, turned on a dime, World War II.

Spend 75 years. It was the start of the end of the war and something we should never take for granted. No, the average age of a D-Day veteran at this point is 96 years old. Yeah, I learned yesterday that only 4% of World War II veterans are still alive today. So if you know one, today is a great day to give them a phone call. It's worth thinking about, and there's like one part of D-Day that we particularly love. It was a multi-country effort. D-Day was. Brits, Canadians, Americans, the whole team got involved.

Now it's in our first three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks are 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. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Jack Daniels owner just revealed it's losing $125 million because of tariffs.

Jack Daniels, you deserve a glass of Jack Daniels. Pour yourselves of Jack Daniels. Sales were up 2% over the last year. They had been up 8% the prior year for Brown Foreman. the owner of Jack Daniels. The cause of the slowdown? I think it was tariffs. So, Jack, who is this mysterious figure of Brown Foreman?

Brown Foreman owns your parents' entire liquor cabinet. All the stuff you can't afford. This is, we're talking based in Louisville. They've got Finlandia vodka all the way to like shambord, whatever the heck shambord is. It's great. Don't know what shambord is, but Jack Daniels is the golden child asset of Brown Foreman. Okay, so before we jump in this, sit down, Jack, you want to make yourself under The groaning here. I know that doesn't have whiskey in it, but it could have whiskey in it.

And bring me back to 2018. What was going on? All right. So President Trump kicks off the trade war with first some tariffs on China, but then very soon after tariffs on European aluminum and European steel. The Germans, the French, the English, they were not happy. Not the sexiest tariffs, but tariffs nonetheless. What did Europe respond with? Europe responded with a personal attack placing tariffs on Harley Davidson, Levi's jeans, and Jack Daniels whiskey.

If Europe could have tariffed Bruce Springsteen, they would have done it themselves. It went after Americana. Now, yesterday, we learned in Brownformin's quarterly earnings report just how bad those tariffs have been. Get this. 60 percent, 60 percent of American whiskey that's imported by Europe, it's Brown-Forman-owned. And bear in mind, Europe loves Jack Daniels. When I was in England and Germany, the two European places have been, Jack Daniels was everywhere. So this has resulted in $125 million in annual lost sales.

Brown Foreman's CEO is taking this personally because he should be taking this personally. You ready for the quote straight from the CEO? We view these tariffs as a targeted campaign against Brownform. You can feel the emotion when he's talking into that thing. He's like yelling out to Europe to just give him a breakover here. Well, the funny thing is, yes, Brown Foreman CEO, it clearly was targeted against you because you represent America. So in case you're wondering,

all right, maybe they can just relax after all this? Nope. No, they can't. It's not just their whiskey business. Now their Mexican business, which is tequila, might get affected by new tariffs that are scheduled to kick in this weekend. So, Jack, what's the takeaway for our buddies

down in Louisville over at Brown Foreman? It's a good thing that at least liquor is doing better than beer. We have talked about this. We kind of preached about it on Snacks Daily that as millennials drink less, they're drinking a lot less beer, but they're like a few spirits that are living their best lives.

And Brown Foreman has a bunch of spirits that despite tariffs are doing well in this shift from millennial tastes. Jack, can you take me on like a little tequila sunrise trip? Sure. Herodura ever heard of it? I can barely pronounce it, but that's a tequila. I'm serving at my wedding this summer and it's owned by Brown Forman. Jack has been struggling to order this stuff because he hasn't even been able to Google how to pronounce it. So Brown Forman's Tequila Shelf is Herodora and El Himador, both of which Salesbrose

13% last year. In fact, demand is so high that agave, the critical ingredient in tequila, it's at like record high is just trying to keep up with demand. All right. So, Brown Foreman's got serious tariff problems, but at least it's not suffering from like this beer trend. And it's really happy it's not a beer company. For our second story, GameStop stock.

Game. Nicely. Nicely said. Unique New York just plummeted 36%. because it deleted its dividend. Investors are completely done with this company. We are, I mean, Jack, this one is, this one's a little harder for me to relate to because the only thing I can play is Mario Kart and, like, throwing multiple bananas.

I got, like, three words for you, dibs on Yoshi. What is GameStop? Three other words. It's pretty much the Chipotle of video game stores. They're like everywhere nation to nation. If you're near a mall, it's in that corner of the mall that, like, your mom kind of made you avoid and would drag you away from. on your way to like Banana Republic.

And it's actually at every strip mall, probably next to the Chipotle, ironically. Jack, three more words. What's a dividend? Kind of four words. A dividend is a lovely thing. It's a cash payment that companies pay their shareholders. Just like Grandma is sending you a birthday check, except they tend to happen every quarter. Now, just like with Grandma, you don't want those checks to stop for multiple reasons, and they just stop for GameStop.

GameStop canceled its dividend. It's a sign of tough time. I know, I know that feeling. GameStop's revenues fell 13% last quarter. It was an ugly earnings report. Even its used game division, which is its most profitable line, sales were down. Because if your GameStop, you're basically just this middleman here. You're in between the gamers who just want games.

And you're in between the games who just want gamers. And guess what? It's 2019. People are downloading games or just streaming them online. So there's like no reason to go to GameStop's 5,700 stores. And the new Xbox that just came out, that I don't know. even know how it works. It doesn't even take discs. It's offended by disc. It's pretty funny. And Gamestock is not stocking that Xbox because it's offended that it's making it obsolete.

Now GameStop Stock Stop is following a Barnes & Noble's playbook that is like highly, highly concerning. It's true. This is alarming. In 2011, Barnes & Noble cut its dividend and it said it was to invest in its digital book strategy. It hasn't gone that well for Barnes & Noble because I I haven't seen a nook since. I just haven't seen a nook, actually. No, you really haven't. And then yesterday, GameStop is cutting its dividend to invest in transformation initiatives, which is pretty much digital games.

Sounds like a sequel. Now, a turnaround is possible for a company like GameStop, but cutting its dividend is like a freaky kind of scary signal right here. And this whole story sounds a lot like Barnes & Noble. So, Jack, what's the takeaway for our buddies gaming who have stopped over at GameStop? Gaming has had no leader for like two years. Take me to your leader. They're on their fifth CEO.

They don't even know who to bring you to. The LinkedIn page is like completely messed up. You've got three people to endorse for executive capabilities. Nick, let me underline what you said. They're on their fifth CEO since November of 2017. When you have that much turnover, you're like restarting every few months with a new strategy from the top. That means you've got no strategy.

You've got no new initiatives. And two years of no launch. watching something in video game land is not a productive two years. For our third and final story, Unicorn of the day, is Bird, the micro-transit for people who are scared of the subway, but kind of like adventure. And don't want to own a car. It just rolled out, Bird, a new bike slash mopad cruiser thing. It's actually a really cool two-wheeled vehicle.

We're going to have this up on our Twitter. This thing is actually very neat looking. Like, this is how you should roll up this stuff. And it all starts with $6,500. Jack, a big number. sounds kind of fancy, can you break down what $6,500 signifies? Goldman calculated that that is the value of a New York City parking spot if you have the pleasure of owning one.

Right. That's not the monthly amount you're going to run it out for. That is the value of that land if you were to sell that thing. Right. If you own a parking spot, you should try to sell it for $6,500. In San Francisco, the cost of like a parking spot is like minimum $200 a month. That's like if you're lucky, that's where it's starting. Okay, so car ownership, your car payment, insurance, gas.

like oil changes. It already cost thousands and thousands of dollars, but in cities, it's even more. And if you have a friend with a parking spot, you hate that friend. And no one likes that friend. You do. You have deep, deep envy for that friend. And this is what leads us to Byrd, which is like the OG car subway alternative company with its scooters. It is now worth over $2 billion. Now, this one is kind of personal for us because Jack and I, we love a good Friday afternoon after work, just a scooting around on a little scooter on our own. Yeah, we're talking about shared fleets of electric scooters and mopeds. And in New York City, we'll walk you through how it works, Nick. Like, you just finished a long week of work. We hear you.

It's gold. It's golden hour. You look good. You don't want to go underground. You want the wind going through your hair like a little bit, or at least over a helmet. So you open up your, like, bird or scoot app, and you look at it like Google Maps, and you find a bunch of scoots are on street corners near you. And then you walk up to them, and you can activate that scooter.

boop, boop, boop. Like it was R2D2 with your app. Perfect. You get on this thing. You're moving away. By the way, just throwing this out there. How come Bird is not partnered with like Tinder or another dating app to like make some kind of tandem situation happen? You just like cupid did a brilliant business idea. I like this. You guys should run with it. Now, birds rise, they're a lot faster than cards because you're like weaving your butt through traffic. And the cost is like four to seven bucks per ride. So you're getting it pretty cheap too. Yeah, you cruise by the cars that are stuck in traffic. Everyone's given you the stink eye because they wish they were on the scoot going as fast as you are. They're faster.

They're cheaper. They're more convenient because you don't have to walk to the subway station. The only flaw is you have to, once you get off, like call all your loved ones to let you know you survive the thing. Yeah, they could be kind of dangerous. So Bird does an e-scooter share that Nick and I have used out, and we're going to tweet out a picture of it. But it's also starting to sell hardware, like real vehicles for people who want to own their own scooter. We're talking about the Bird One scooter. This thing is like $1,300 and it goes like, what, $3,300. And it goes like, what, 30 miles? 30 miles per charge.

But yesterday, Bird announced the cruiser, which is a really cool looking thing. It's not for sale yet. They're just going to include it in some of their shared fleets this summer. This thing has got wider tires because the last thing you want is like hitting a bump when you cross over to Viz. Yeah, you don't want the bump to knock you off your scoot. And guess what? It's got two seats. It's a two-seater.

Boom. My tandem idea. I love this. And you're sitting. You're sitting. It's not a stand-up scoot. So it kind of looks like a Harley. This thing is a great way to look a lot.

lot cooler than you actually are. And that's why I'm very excited about the concept. So, Jack, what's the takeaway for our buddies over at Bird? There's a big market for urban micro-transit like Bird scooters. Jack, can you tell me about Thicks, the word we just created at Snacks Daily? You know that Bird is targeting the Thicks, which is T-H-I-C. Talk to me. People who live in town. Use it in a sentence. They're hireners. Very nice. And they're carless. Jobs are consolidating these days. They're just consolidating in big cities. And that's where car ownership happens. happens to be like the most ridiculously expensive. Okay, incomes are high, parking spots are scarce.

Public transit, like New York City subway, isn't getting any better anytime soon. So that's why companies like Bird and its buddies Uber and Lyft, they're seizing on this opportunity with micro-transit because it's all about the fix. Jack, can you whip up the takeaways for us, please? Jack Daniels is losing $125 million a year because of tariffs, but at least it's not losing drinkers like beer is. And at least we're not the only people who don't know what Schaumbord is. GameStop is missing out on all the video gaming these days, and it's also had missing out on leaders these days.

It's also very curious that it's pursuing the Barnes & Noble Playbook. We would love to hear more about this GameStop. Let us know what's going on. Third and final story, birds, two-wheeled scooters, and bikes are targeting the thicks. T-H-I-C, you live in town, your high-income, and you're carless, like all of us. Love that one. So, Jack, let's get to the snack fact of the day here. We noticed a little development and then we dove a little deeper. Well, Walmart is getting rid of its famous blue vests that its workers wear in the stores. I know. Why are they doing this?

It kind of works with everything, I mean, because you can wear it every day. I'm kind of surprised. So snack fact of the day, Walmart employs one out of ten Americans who are working in the retail industry. That is 2.2 million Americans, which is not a small sum. And that's a lot of Americans, which is why we're glad the CEO is calling on Congress to raise America's minimum wage, which is at an embarrassing like $750 nationwide. Now, a couple other key stories in our Snacks Daily newsletter. Jack, what do we go? Kronos, the Canadian cannabis company. The stock grows 11% because of a big upgrade, and we'll tell you why. And then Amazon whipped up a brand new, kind of freaky-looking drone airplane thing, and it's worth checking out in our newsletter.

Now, Snackers, we love snack facts of the day that you send us. in. So please hit up our Twitter at Robin Hood Snacks. We love to hear from you guys. In the meantime, you know, brush your teeth, take care of whatever you got to do. And let's do this maybe tomorrow. How does that work? I'll see you guys 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, 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 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.