The Best One Yet - 🧘 “Leggings. Latte. Pilates. Repeat” — Alo Yoga’s sanctuary strategy. Cruises’ 104% full problem. Lucid’s EV trust fund.

Episode Date: June 2, 2023

0:00 - Intro 1:23 - Highest Paid Mascot 3:45 - Alo Sanctuary: The fastest-growing athleisure brand in America is now Alo Yoga — Because Alo didn’t build stores, it built sanctuaries. 8:10 - Lucid Fund Raise: Lucid, the $130K electric car with 500-mile range, has a trust fund… and it’s the Saudi Arabian royal fam. 13:01 - Cruise Lines Over Booked: Cruise lines are officially the comeback players of the pandemic: Their boats are more than 100% full, but why aren’t their stocks? 16:57 - Takeaways 17:29 - Best Fact Yet 19:19 - Shoutouts This week’s 1-minute pop-biz pop-quiz: go.tboypod.com Visit Framebridge.com to support the show $LULU $LCID $CCL $NCLH Want merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.com Follow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypod And now watch us on Youtube 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. It's Friday, the real Friday. June 2nd, and today's pod is the best one yet. It is a team boy, Jack. The real Friday. Oh, Jack, can we talk about the debt ceiling over there, my friend? The debt ceiling deal passed the House of Representatives and on its way to passing the Senate.

Stocks were relieved. Stocks are at their highest point in a year right now. Celebrate the wins, literally. And Jack, fantastic haircut. Thank you. You're looking great over there. Just wait till I'm wearing product. Oh, I cannot even imagine it.

Jack, first story. What do we got on today's show? Allo Yoga has become the fastest growing athlete's brand in the United States. Because Yeti's aloe doesn't have stores, it has sanctuaries. For our second story, we're looking at Lucid. Lucid's electric car business was running low in cash,

but it just got a $1.8 billion check. Because Lucid is the electric car of Saudi Arabia. And our third and final story, we're going up to the poop deck. Cruise lines are doing so well, their ships are over 100% full this summer. But Jack and I are wondering, why are the cruise stocks so far down?

Cruise stocks are way down. Cruises are overflowing. It's a conundrum. It's confusing. We've got to talk about this. But yeties, before we hit that wonderful mix. This is how you go into a weekend, Jack. I love this mix.

The NBA finals tipped off last night. We got the Denver Nuggets versus the Miami Heat. It is a show. But the real showdown isn't between the players, and it's not the rebounds or the zone defenses either. No, and it's not Ginny Butler, and it's not Nicola Yokic either, is it, Jack. The real story is the mascots. It's the mascots, because Yet he's Denver's mascot is the highest paid mascot of all the mascots. Get this. Rocky, the mountain line for the Denver Nuggets.

Love Rocky. He is a mascot that gets paid a reported 625 for, thousand dollars a year. We repeat, the mascot for the Denver Nuggets is getting paid $625,000 a year. I'm sorry, sit down, stand up and start cheering. This sounds crazy. Yes, it does sound great. But if true, huge. Remember, there's a man in that suit, Yetis, and that man is making two-thirds of a million dollars. To dress up and perform as a fluffy, kid-friendly mountain lion mascot with a poseable thumb. This guy makes more money than a VP at Goldman Sachs. Jack, this guy makes more money than a P at Goldman Sachs. College grads, if you want to make bank? Yeah. Don't get into banking. Get into double backflip trampoline slam dunking at half time. Yeah, you should start learning how to toss a t-shirt because then you can start tossing checks. What we really want to know, though, is what did Rocky the Mountain Lion do to negotiate such a high salary? I mean, Jack, does he walk into the job interview and just start fist pumping his way to negotiation? Did he tell the guy on the other side of the table, if I make this half-court shot, you have to pay me a million dollars? Jack, what happens if the offer was like too low? What did he do then?

Boo! Boo! He's in like a bunch of other people. Let's go, people. Let's go. Bring it up. Here we go. Here we go.

Can I get a six? And a two. And a five. You're paying me $625,000 a year. Or you're getting a free white t-shirt in the gut. Let's see that our three stories. Fifteen years before this song. Two boys from the Northeast met in the dorm.

They had an idea to cause a cultural storm. It's the best one yet. The best is a norm. Jack Nick, that's it. I don't even think they need to practice. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go.

We can't wait no more. So just start the show. Start the show. For our first story, Allo Yoga, the athleisure brand. Its sales have nearly doubled in the last year. They just passed a billion dollars. Because Allo didn't build stores. Allo built sanctuaries.

Well, Jack, should we talk about the downward elephant in the room over here? Yeah, Lulu Levin just announced earnings yesterday afternoon. Really good earnings. It was actually impressive earnings. But Jack and I don't want to talk about that. We want to talk about Allo. Allo, which stands for air, land, and ocean. We're talking about the fastest growing athleisure company in America based in Los Angeles.

We're talking A-List Lycra. The target customer wears Allo on set in Santa Monica. Like maybe you haven't seen alo? You've seen Al-A. You've seen a Jenner wearing aloe. The Allo brand as if Coachella designed yoga pants. It's basically like a wearable juice cleanse. But Nick and I were shocked to see this.

Allo Yoga was founded by two middle-aged dudes. The co-founders are best friends in their mid-50s who make cute tops. And now those cute tops were worn by Haley Bieber, Bella Hadid, Olivia Wilde, and countless other celebrities. The most likely you are to see these cute tops is at a Malibu, farm in Montecito. Let's jump into the numbers. Sales at Allo Yoga nearly doubled last year to pass $1 billion. Jack, can we slip into some context, please, on this? You want to know how much a billion dollars is? Let's talk about a billion dollars in athleisure sales. Well, Lula Lemon,

a huge apparel company, did $8 billion in sales last year. Okay, so what we're saying here, ipso facto, alo yoga is in the same ballpark revenue-wise as Lulu Lemon. Right. Every eight pairs of Lulu Lemon pants sold, there's one pair of aloe leggings. sold. But yet he's here's what Jack and I found fascinating about this story. The business story here isn't the product. It's actually the store. Because they don't have

stores. They have what they call sanctuaries. Jack, I think you're supposed to say sanctuary. No, you're supposed to say, sanctuary like Quasimoto and the Hunt Batch of Notre Dame. It's like you go Quasimoto or you can go full ASMR on this, Jack. Want to know what their sanctuary

looks like? Let's talk about what their sanctuary looks like. Picture Haley Bieber's yoga sanctuary. That's what this is. This company, they're not just selling yoga pants and yoga mats. What are they selling, Jack? A $100 oil diffuser, a $400 gold necklace, double-digit lattes next to the leggings. With virgin farm-raised oat milk. Because this isn't a store. This is a spa, cafe, co-working space gym experience. Yeties, when you walk into an aloe sanctuary, you're not there to really buy a leggings. You're going there to take a power Pilates class. And then sip on a nitro macha on the ground floor, after that class. That's not all. You may head up to the top floor where you can enjoy a cryo chamber and

freeze your legs. Or a cold plunge pool. Or an oxygen bar. They even have a podcast studio at their sanctuaries. Jack and I can walk in, ensconced in yoga pants and perform this podcast from an alo store. It's a wild store. Again, they don't call it a store. Now we understand why. Yeties, you come for the wellness bar. You'll leave with the sports bro. We've said before, retail's not dead. Bad retail's dead. Preach, Jack. What is this even retail? It sounds more like hospitality.

I don't really know. I'm just too blinded by the turmeric latte shots. We should check out their store in Soho next time we're in New York City. Sorry, sanctuary. So Jack, what's the takeaway for our buddies over at Allo Yoga? I'd really prefer a Quasimodo impression. Yet he's the best salesman, don't sell at all. Best is, how did Allo Yoga get every Los Angeles-based A-Lister to wear their leggings?

by not being salesy. Allo Yoga's CEO says that he spent $0 marketing a recent launch of a sanctuary, and yet the opening was packed with people. Allo's not advertising like the big brands that it's chasing after. There's no mattress, mattress, mattress. Despite that lack of advertising, actually, because of the lack of advertising. Right, because of it, Jack. You're right.

Allo's brand recognition is soaring right now. Because yet he's, Allo, it isn't focusing on selling. It's focusing on everything else. Great salespeople don't tell you to buy their product. They build a feeling within you. Allo is selling so much because the best salesmen don't sell. For our second story, Lucid, the ultra luxury electric car company, just got a $2 billion check from its mom and dad.

Having a rich parent sounds amazing, but there are downsides too. Jack, before we jump in T-boy style, the last time we covered an electric car company wasn't it It was Rivian, right? It was Rivian. We calculated that Rivium was losing money, and on the pace it was at, it only had two years until it would have to declare bankruptcy. So Jack and I had a takeaway about the whole electric car industry.

Every EV startup is in production hell right now. Every electric car company is fighting for its life in a battle to get profitable before the money runs out. But one company is a huge exception to all. There is one electric vehicle that has the opposite situation of Everett. thing we just said. One electric car company has unlimited cash available. And that company is Lucid Motors. Lucid Motors. Like Rivian, Lucid is a recently publicly traded electric car company. But Jack, can you whip out the white gloves for us and talk about Lucid's differentiator?

Lucid is an ultra luxury electric car company. Full disclosure, I've never seen one on the road. Okay, I just saw one and I think the car was judging me, Jack. This car goes for a hundred thirty $28,000. It's the cartier of electric cars. Which means, Jack, we should talk about Lucid's product differentiator, too. Well, most electric cars, like the ones Nick and I own, have a 200 to 300-ish mile range. On the other hand, Lucid has a 500-mile range. That is best in market. You could drive this thing from Abiza to Mallorca, even though there's water in between, Jack.

Another differentiator of Lucid, though, we have to talk about their parents. I heard the chassis is made by Gucci. I want to talk about the parents. Okay, we can talk about the parents. Lucid's parents is the Saudi Arabian royal family, which owns 60% of Lucid stock. Yeti, sit down and take a moment to appreciate the irony here. Saudi Arabia, the huge oil producer,

owns the majority of this electric vehicle company. If an oil shake is going to drive electric, they're going to do it in a Lucid. Now, Yetis, even though Lucid is losing about as much money as Rivian right now, Lucid can always ask its parents for some cash. Oh, and it just did. Lucid just sold new stock of itself this week to Lucid's parents. Lucid just got some cash from the sovereign wealth fund of Saudi Arabia.

Lucid's parents just wired $1.8 billion to Lucid's bank account. Along with a memo, dinner's at 6 p.m. Text your mother if you're going to be late. So, Jack, what's the takeaway for our buddies over at Lucid? Lucid has a trust fund. for a company that's mostly great, but it can also be bad. Yeah, Yetis, unlike every other electric car company, if Lucid is struggling for cash,

it can just tap its parents and get a nice check. It literally just did that. That's what we just described, actually. That was the story we just did. But there are two problems with this trust fund situation for Lucid, and the first problem is dilution. Right, dilution. Lucid just issued new shares to its parents,

which makes all the other shares worthless. Yeah, that was dilution, and that's why Lucid's stock just fell 16% on Thursday. The second problem with Lucid's trust fund is discipline. When your folks are always there to bail you out, you may never grow up. Just look at the Roy children. Lucid could probably use some tough love, which might be a little bit of production hell right now. But Saudi Arabia, probably not going to give that right now.

Lucid has a trust fund, which is mostly good for a business. But it can also be kind of bad. For our third and final story to send you into the weekend, cruise lines just reported that they aren't 100% full. They're 104% full. There's bodies everywhere. Too much on the cruise ship, people. Even though the cruise business is better than ever,

Wall Street kind of hates the stock. Now, yeties, we've seen a lot of comeback since the pandemic. Jack and I have been keeping track on the old whiteboard, haven't we, Jeff? Yeah, it's like the reverse hoarder's almanac. Concerts are back. Yes. Paper menus are back. Cheeseboards.

Cheeseboards are back. bigger than ever. Everyone's sharing cheese. But Jack and I have got to crown the greatest pandemic comeback of all. And what is it, Jack? Cruise lines. It's Cruise lines. It's the cruise business. The cruise business literally went to zero at the beginning of the pandemic. Don't forget. Government authorities were shutting down cruises. But besties, the turnaround of the cruise industry is complete. Cruise occupancy went from zero percent in 2020 to 50 percent in 2021 to 100 percent last year. The Wall Street Journal just reported this spring, they're above 100%. Get this, Yetis, Royal Caribbean Cruise Lines, Norwegian Cruise Lines, they just hit 102% and

104% occupancy this spring. These cruise lines broke math this spring. They broke the math. But Jack, we should sprinkle on a little context here because this is pretty interesting. It's somewhat common for hospitality industries to go over 100%. Yeties, you may know this as overbooking. stadiums, hotels, and especially airlines. They sell more tickets than they have seats, assuming that a small percentage won't show up or will cancel. Well, cruises are so in demand this past quarter. They are literally bumping passengers like JetBlue.

But Norwegian cruise lines actually had 104% capacity on the most recent ship. Interesting. Because some people insisted they didn't want to be rebooked to next year or next month. They decided to bunk in the same room with other people. Yeah, can we just set the scene? on the starboard bow here. There are too many people literally on the ship. Like people are just ending up rooming together, right? Rooms designed for two people are holding three or four people instead. I think they're like related though. It's not like cross party situation. Yeah, this isn't like

Rando Ron is bunking up with you, right Jack? Still dude, they're like short on bath towels. Okay, so like what's the situation for the like activities staff? If you want to snorkel for that excursion, get in line. Yeah, if you want to hang out at the kiddie pool, it is not just kids in there. It is like teenagers getting stuffed in. Yeah. Put a helmet on. And the, All you can eat, Endless Shrimp buffet is literally running out of shrimp. Oh, you want tartar sauce? You are not getting tartar sauce. Still, this is a booming business moment for the cruise line.

The average ticket for a cruise is up 40% from last year to $750. Cruise lines are sold out through next year. It's crazy. But here's what Jack and I were curious about. The three biggest cruise stocks, despite all of that, are down 80% from their pre-pandemic cost. Booming business battered stock price. I'm Wamsgan. So, Jack, what's the takeaway for our buddies over in the cruise industry?

Nothing sinks a stock like debt. Yeah, it is. How did cruise lines survive that year of empty ships and that second year of half empty ships? They took on a lot of debt during the pandemic. Yeah, Jack and I jumped into the Carnival cruise earnings and they have got over $30 billion in debt. You thought your mortgage was big? For every dollar of cash Carnival has, they have $7 of IOUs. Yes, analysts are impressed that carnival ships are literally overflowing. But shareholders don't get paid until all that debt gets paid off. And that is why we see such a healthy business, but such an unhealthy stock. Because nothing sinks a stock like an iceberg.

Like debt. Too soon. Too soon. Jack, can you whip up the takeaways for us for the Real Friday? Allo Yoga sold a billion dollars worth of yoga gear at their sanctuaries last year. the best salespeople don't sell. For our second story, Lucid, just got a huge check from Saudi Arabia's royal family. Lucid, it's got itself a pretty nice trust fund, but there are downsides to that trust fund. And our third and final story is Carnival Cruises.

Their latest cruises have more people on board than the ships are designed for. So many people. But the stock is still down. Not enough shrimp, because nothing sinks to stock like that. Now, time for the best fact yet. This one sent in by Tomas Baggio on the north shore of Oahu, Hawaii. Tomas Bajio, huge listener, by the way. Great guy.

Legendary, yeah. He once did a plank for an entire episode of our show. He's still feeling it probably. Well, because we just had the National Spelling Bee Championship last night, Tomas has grammar trivia for us. Nothing to do with Clifood. Nothing to do with Clifood. Here is the grammar trivia question.

Here we go, Jack. What is the only word in the English language that has three? consecutive double letters. I don't know the answer. Okay, I know you don't. I know you're ready? I did hear this question before, though, and I have three guesses. You ready?

Hit us with the guesses. Okay. My guesses are Mississippi. Okay. No. Okay. But I know we did. How about vacuum?

Aren't there like two Cs and two U's and two M's? That is really good. And in German, you may be right, but English, I don't think that's the case. Okay. Keep going. You're on a roll. You're getting close. My last guess was T-P-E.

Isn't it like T-E-E-P-P-E? I guess it depends which part of the country you're from. Okay, okay. The answer, Yetis, for the one word in the English language that has three consecutive double letters is bookkeeper. Bookkeeper. Bookkeeper. B-O-O-O-K-K-E-E. Two-Ks, two-Eys.

Hooked on phonics, baby. There we go, Jack. Bookkeeper, that's perfect. It's so Dickensian. Not Clafutti. It's not Clafutis. Yeties, you looked fantastic for the four-day week. Jack, it's not just the real front.

It is Quiz Friday, isn't it? Go to go. Toaddeboypod.com to take this week's pop biz, pop quiz. And yet, he's, after you do that, there is one thing you gotta do this weekend. Celebrate the wins. Nick and I, we'll see you Monday. If you know, you know. And before we go, in a first for this podcast, Yosef, over in Tracy, California,

we have a special announcement from a special someone in your life. This is wild. Yosef, we have a message from your wife. You are going to be the best. Dad yet. Congratulations, Yosef. You guys are having a baby. Not too shabby.

It's going to be a T-Boy. This is the third annual IBO. You're going to want a daduation party. Congratulations to you both. And a huge good luck to Rachel Hauer, who's running a marathon in San Diego this weekend, maybe while listening to this podcast. Rachel of T-Boy Pod fame, because she is our magnificent new social media manager. And she's doing fantastic.

Congratulations. to Nicole Ziegler and a Johnny Santos, a couple of native New Yorkers getting married at Brooklyn City Hall. Congratulations to Stacy and Alex. They're eloping and then headed off to Honolulu Hawaii. Yeah.

Okay. That's pretty cool. I don't know much to say, that's cool. And I lost my place. And David, keep all this in there. And Davis, Stovey, good luck on the dental exam. You're going to crush this thing.

You got this. And congratulations to Patricia Bonagiro, graduating from the Chicago Booth School of Business. And a happy birthday to little Michaela Maloney, a giant rangers fan who's turning one in Mill Valley, Madison Square Garden. Giant spiritually, but not yet physically a giant. And Lexi Savad, happy birthday down the street in San Francisco. Happy 30th birthday to Todd Kovin Suarez in Chicago. And Eric Sue is celebrating that birthday with his corgi over in Boston. Just that's out of all.

And Devin DeLab is flipping shrimp at his Habachi birthday party down in Texas. Happy 62nd birthday to Steve Brockman in Moreno Valley, California. And Ariel is turning 21 over in Franklin, Michigan. Happy birthday Ariel. Happy birthday to Colleen Grundell in New York City. And Chuck Grathel, happy birthday, man, all the way over in Portland, Oregon. Happy birthday to Aryan Amir in Chesterbrook, PA. And a happy birthday to mayor turning 35 in Westfield, Indiana.

Happy birthday to Axith Vasant, and his wife celebrating the birthday on the same day. This is Jack, Nick and I both own stock of Lulu Lemon.