The Best One Yet - Lululemon’s 5-year plan surprise, Ford invests in the Tesla of pickup trucks, and Domino’s jumps 5% on a “delivery dilemma”

Episode Date: April 25, 2019

Ford needs help with electric cars (and help if its electric trucks fail), so it dropped a $500M investment in electric pickup startup Rivian. Domino’s sales slowed because of aggressive DoorDash/UberEats promo codes, but shares jumped 5% because the new CEO knows delivery is its DNA. And Lululemon revealed its 5-year plan, and it’s about much more than just yoga pants -- it’s a deodorant, shoes, and menswear lifestyle brand.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 25th. And Jack, what did you think of this? This is the best one yet. We got a T-boy. Markets are going insane.

This is nuts. There were so many earnings reports. I'm connected to like three IVs. We like, we got him here like, still catching our breath on this thing. We narrowed it down to three stories for you. Wonderful mix. Domino's pizza is the first.

Stock jumped 5% because it refuses to outsource its delivered. Delivery is the pizza and its pizza is the delivery. Yes, that is the case for Domino. Second, Ford Motor Company, it is investing in its own disruptor to make sure that it doesn't get disrupting. You have got to trust us on this. Go to this company's website and look at their skateboard. It's called Rivian, and it's a giant skateboard.

Third and final story, Lulu Lemon, I'm wearing their pants right now. Full disclosure. And it's wearing like this new transformation plan. It's going from yoga pants to everything. Men's wear, international, wellness, juice. It is like, it's almost too much. do less guys. Nick's intimidated by the little space, Lulu.

I'm impressed. A little space. Before we jump into that, we got to talk about the fact that the biggest movie ever has already opened in China and brought in a hundred million dollars in like a few hours. Avengers Endgame has hit the Chinese box office because, you know, they're like 12 hours ahead of us. They might as well. It's mass. 100 million dollars just on Wednesday or like maybe Thursday in China.

Now, it has already opened up on piracy networks. You can already watch the whole. film and just spoilt. True. This is like modern day bootlegging. But US movie theaters are like getting so nervous for the overload of crowds that they are doing 24-7 screenings every two hours. This is supposed to be the biggest deal in movies ever.

This is a quote from the Wall Street Journal. Theaters are ordering double the popcorn. Extra popcorn. Now, request, I'm not a big Avengers guy. I've lost track. More of a DC person. I just stop counting after eight. Can someone send us a guide on what Avengers movies you can watch without having

scene all other 23. Right. We're not trying to be spoiled here. We just want to know where to insert ourselves strategic. Hit us up at Robin Hood Snacks if you got it. Now listen to these keywords before we jump to our stories. You're tuned in the snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robin Hood family. It's all informational just so. You know, we're not recommending any securities. Nope. 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. For our first story, LULMINBOR, SIPC. For our first story, Lulu Lemon just revealed its five-year plan,

and it basically wants to be all up and all over your life. This company is just fully transparent. It's telling us exactly where it wants to see itself in five years. They're like the kid who just showed up to school for the first time, has no friends, but is really eager to have a play date with everyone. The five-year plan is about the power of three. We're just going to throw more odd numbers at you. This press release was actually packed with jargon.

There was a lot in there. We're trying to still decipher. But we actually need to translate it. Yeah. So the three three were product innovation, omni-guest experience, and market expansion. That one I kind of get. Corporate, like, fluency right there. Now, they started this press release with just an elegant humble brag.

They said, quote unquote, having already delivered on some of our 2020 goals. I'm not thrilled about this. I wish it'd be a little more humble, a little less brag. Act like you bend their Lulu Lemon. We get it. You're working ahead. Yeah. Okay.

So the first thing. is, you know, the product innovation. And for that, they said they want to double down on their men's business. Double the sales in men's business. They're actually going to raw their own sneakers this year for your feet, men and women. And continue to expand on the popular office, travel, and commute biz. Headset Nike. If they're going to give you a flexible work attire option, take advantage with Lulu. Then you have the market expansion, leg number two of the power of three. Quadruple international sales. No big deal. Just 4X them. Within five years. So the fact that Lou Lemon is in every street corner in New York City.

They want that on every street corner everywhere. They also want to double their online sales, which right now are about 26% of their business. Now, we want to focus on the weirdest of the power three. The third one. The Omni Guest Experience. What is that? We find it a little bizarre that they're calling their customers guests. Yeah.

But it tells you something about the strategy. It's pretty fascinating. They're treating them like hospitality. It's like you're in their home. So, Lulu Lemon, this is a quote. It wants to be an experiential brand for people. living the sweat life. Sweat life sounds concerning.

If you're living the sweat life, you may want to consult a doctor. The company said they believe their guests want flexibility and choice as they lead a healthy and mindful lifestyle. Now, get this. Lulu Lemon actually held and hosted 4,000 events last year, which is a huge number. That is a big number. And coming up, there's going to be a bigger one. More events in Chicago, especially...

Marker calendar. Where it's building a 25,000 square foot store in Lincoln Park, where there will be. A meditation space. Yoga studio. Like juice, bar, and wellness food. They're better damn well be one. You can get lost in this. This thing is going to be like the Hotel California of yoga places.

You will wander in with 25,000 square feet. You will never leave this thing. It is not just a store. They also have self-care product initiative with shampoo, deodorant, moisturizer. Lulu is going to be all up in everywhere. You're going to go to yoga class, but then when you get out, they're right there in your shower.

They are everywhere. So, Jack, what's the takeaway for our buddies over at Lulu? Lulu Lemon also owns its sales channels. Now, that sounds technical, but it's actually a very straightforward concept. It doesn't rely on any outside retailers. It doesn't put its stuff in Macy's or JCPenney. It controls its stores. It controls its websites, and it takes all the profit from both of those places.

Now, it does have some available on Amazon, but the bottom line is that it can get higher profits because it's on top of anywhere you're going to get your Lulu. Amazon's always the exception of the rule, but Lulu Lemon controls the experience. As always, when we own stocks about companies we cover, we tell you, I own Lulu Lemon stock. For our second story, Ford just dropped a cool half a billion dollars in Rivian, the electric pickup and like SUV company and I don't know, what else? Skateboard. I got a skateboard.

It has a giant skateboard. No big deal. Gen X loves this. An enormous four-wheeled power electric skateboard. It's really, it's really impressive because it's a skateboard. This is a cool company. I'm pumped. We get to tell you about it.

It has a valuation of, I don't know. We don't know. But we do know it has a lot of money. It's raised $1.2 billion in money from some serious investors. It takes a lot of money to start a car company. You got the factories. You got the people. Spare tires.

You got all those pamphlets you give out of the car shows that are really thick. Car fresheners. And then you got to do all those TV ads eventually. Riving has a lot of money now. It's trying to build a car company. It's electric cars only. And it has some elite backers. Small catch, though, they don't have a drivable car yet.

They don't. But this is a highly touted prospect. It's like LeBron when he was still in high school. Never played a game. Everyone's talking about it. But looks really good. Everyone thinks there's potential. Okay, Amazon in February, led a round of $700 million of investment in Rivian.

Now, Ford's just dropped another $500 million in that. Itself. That's $1.2 billion. It has 750 poise in Michigan, California, Illinois, England, everywhere. And it plans to roll out these new electric, like, huge cars, 400-mile range, crazy acceleration. Can we address the Tesla in the room? This sounds a lot like Tesla. It does.

This business plan sounds like Tesla 50 years. Not going to lie, it kind of looks like Tesla. But it's specializing in big, big cars, SUVs and pickup trucks. A key is that it's built a skateboard essentially, which is a flat base. It's got power, brakes, and like a battery. And this thing is going to be the base of the car. Yeah. It's like a regular skateboard was like one of those 136th replicas.

This thing's huge. Right. Except you could be cruising around on this thing in the suburbs and be the cool mom. Yeah. So, Jack, what's the takeaway for our buddies over at Ford? and Rivian. This play is part defense, part offense by Ford. So the offensive side is that Ford needs to grow its like electric vibes. And it has a strategic deal with Rivian to use that big skateboard. It's going to take Rivian's skateboards and build a car on top of it, leave like the complicated

power train stuff to Rivian. I like dying enough if the Rivian people refer them as skateboards as much as we do. Now, the defensive side on this is that Ford has to hedge itself in pickup trucks. Trucks are the only thing Ford still has right now. It's making all its profits. And it's trying to make an electric F-150, but if it doesn't work out, at least it owns Rivian now. Right. If the F-150 sells, Ford wins. If it doesn't, it's got Rivian and it's back pocket. For our third and final story, Domino Stock just jumped 5% because it is facing the delivery dilemma.

Yeah. We'll talk about pizza in a second, but first, let's talk about people. Yes. The new CEO, his name is Rich Allison. Great guy. He's taking over from a legend. Oh, this is a hard one. His name's Patrick Doyle, aka P. Diddy.

He's a University of Michigan grad. He actually does go by P. Diddy. And Domino's Pizza is headquartered in Ann Arbor, and he does go by Pete Ditty. And he, like, the stock went up like a thousand percent under Pete Ditty's reign. He stepped down last year, and now he got Rich. Now, Rich is inheriting a loyalty program of 20 million people who have the Domino's app and, like, love Domino's. But we learned yesterday that sales slowed a bit. They grew 4%, which is good for a food company.

Four percent from last year is solid growth. It's faster than the economy. It means pizza is taking out burgers or something else. People are carboleting. But analysts pointed out, part of the slowdown was caused by aggressive promotions from delivery apps. Right. You've had, you know, Postmates has blown up your phone because someone's offering a $3

cheese steak down the street. And so is DoorDash and so is Uber Eats. They're all doing it. And you cannot order Dominoes on any of those three apps. But that got us really interested because Jack and I were fascinated about these third-party deliveries and Mr. Rich Allison gave some really cool quotes on it. Yeah. You got a little bit of a peer pressure situation.

Great way to put it. Rich Allison is not caving into. I like where you went with that. McDonald's, Starbucks, Chipotle, KFC, they all use those third-party apps to handle the delivery. We're talking DoorDash, Uber Eats, and your postmates. And so analysts asked this new CEO, why don't you guys use them too? They're clearly eating into your sales. And he jumps back, quote unquote, why give up the data to a third party that would eventually use it against us?

He basically said, I don't trust these tech companies. It's like a Harry Potter quote. Someday they're going to take over the pizza industry. Now, here is the thing. when you start outsourcing your delivery as a food company to one of these Uber Eats out there, you immediately get like a jump in store sales right at your spot. Yeah, because those apps are pushing Chipotle. They're pushing McDonald's and they could be pushing Domino's too.

But as soon as Postmates starts doing your delivery, it takes 15 to 30% of it as a delivery fee and it keeps all the data without telling you that Johnny down the street loves Hawaiian pies on Saturday night. Yeah, Postmates is a lot like Uber-A-Lift. They keep 15 to 30% of the fare for themselves. Then he pointed out this other key point, which is just the quality consistency. Yeah. These gig economy workers who are working at DoorDash, they're trying to make a few bucks. He or she may not be as bought into the Domino's brand.

They're not Domino's guys. You know, Domino's guys wearing the tight, I don't know, polo shirts with the Red, white, and blue Domino's thing. Exactly. They might be just tossing pizzas to the front door like Frisbee's. The Domino's guys are treating it like it is a fragile Faberge egg situation. So Domino's value proposition. It's not the best pizza.

It's consistent and convenient delivery. So, Jack, what's the takeaway for our buddies over at Ann Arbor at Domino's? Domino's thinks like a tech company, and it always has. Yes, remember their first mobile app? They were like one of the early guys with that. Very early movers. Check out your buddy's phone. If there's the Domino's app on the first page, you want to stay friends with that guy.

That's a good person, he or she. And then you've got the drone delivery, PR like amazingness before Amazon ever tested. I don't know if drone deliveries actually happened, but I think self-driving car delivery like might have happened. They kind of throw out these cool ideas and then do one or two videos of them doing it once. They do. Now they're focused on keeping customer data that's happening through your delivery app. And they will lose that if they were using Postmates for delivery. Right.

And with the data that they have on customer orders, they'll figure out new ways to push new sales on you. When Jack's ordering his Saturday night, Domino's Hawaiian Pizza Pie, now Domino's, you know what? Maybe we'll send him a push notification for, I don't know, the cookie pie on Fridays. Oh, please don't, Domino's. Jack, can you whip up the takeaways for us? Lulu Lemon is on a Napoleon-like quest to dominate the world with stretchy pants and wellness stuff. I just want that Lulu deodorant. I'm going to put it all over my body. Ford Motor Company is investing in an e-pickup truck phenom. It's called Rivian, and it's an offensive and defensive move.

Awkward day for Tesla to have reported earnings. And then Domino's, it's not giving up pizza delivery because it's thinking like a tech company. It is the NASA of carbohydrates. Now, time for our snack fact of the day. This one, we got a ranking forever. This one's binge-worthy. Let's give the question and then we'll give a little time to... We got a list of the top streamed things on Netflix. Okay. And we have the top ten.

Now, we'll give you a hint. There are shows. They're not movies. All right, there we go. They're very bingeable shows. I already know the answer, but pretend like I don't here. I'll give you a hint. Dwight K. Shrewt.

Number one is the office. That's correct. Number two, friends. I don't understand how they afforded that apartment. Number, they couldn't afford the apartment. No way. Third is Grey's Anatomy. Now, the top Netflix original is Orange's,

the new black. Right. So eight out of the 10 are not Netflix shows. No. They're reruns. But you know what? Netflix? Keep pumping those billions into original content. Now, a couple other awesome stories we got on Snacks.robinhood.com in our newsletter. Well, yesterday was a corporate earnings bananza. It was insane. How many companies? We got at least three more in the newsletter. Facebook, Microsoft, Tesla. What a lineup. And then, that's all we're going to cover in that, too. Love to having everyone on the pod. If you like what you're listening to, drop us a five-star rating. right in that iTunes app. And we loved potting with you. We will be back tomorrow morning for

another Snacksdale. I 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 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.