The Best One Yet - “No more McLasagna” — McDonald’s menu reduction. Spotify’s latest acquisitions. Carnival’s 1 lifesaver.

Episode Date: June 19, 2020

Spotify shares surged over 10% on word they signed Kim Kardashian and Batman to exclusive podcasts. McDonald’s slimmed 100 items off its menu, and it’s loving how the slimmer menu strategy feels. And Carnival’s earnings reveal how it’s surviving in a corona-conomy “pause” for the cruise industry.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 Friday, June 19. What a great podcast we got for you today. So much better than what we did yesterday for you guys. First story of this tea boy is McDonald's, which is canceling all its salads. Sounds like a fake headline.

We're looking at the slim-fit new menu strategy that McDonald's is loving it. For our second story, Spotify just tagged an exclusive podcast deal with Kim Kardashian and with Batman. Impressive, the Gated Garden of Spotify is adding enough VIPs to put the stock at a record high. For our third and final story, we got a Debbie Downer. Yeah. Carnival Cruises loses a billion dollars a month right now. With a B. But its earnings report reveals how it could be the go-to travel option mid-coronavirus. Mid-coronavirus? Real thing. Now, before we jump into all that good stuff, Snackers, we want to wish you a happy June 10th. June 19th, aka June 10th, we're talking about June 19th, 1865. The last American slaves were in Galvest.

in Texas and they were finally told at that point they were actually free. Galvis in Texas is so far away that it took months after the Civil War ended before Word got there that all the slaves were freed in America. Long pony ride. Now, this has been an unofficial holiday in the United States for like 155 years. It's also referred to as Juneteenth Independence Day, Freedom Day, or Emancipation Day. Which also has a nice ring to it. Now, sometimes it's celebrated with actual pilgrimages all the way down to lovely Galveston, Texas. Other times, if you can't get to Galveston, you just barbecue, which we're huge fans of. Nothing Jack and I like more than a vinegory sauce right out of North Carolina. But we want to talk about what's happened since June 19, 1865.

For a hundred years, black Americans still faced huge barriers to voting. In 1921, Black Wall Street, a great black city, was destroyed by a white mob in Oklahoma. During the Great Depression, minimum wage laws were created, but they excluded most of the jobs black Americans actually worked. After World War II, blacks were excluded from the American dream of homeownership due to redlining by mortgage providers. Yeah, add all that up. And by 2016, black families had one-tenth the wealth on average than white families did, aka a 1,000% difference. We're celebrating the end of slavery today with Juneteenth, but the impact of slavery is still very much here today. The thing that gets Jack

and I excited are these small steps of progress that are already recognizing all this. People are having uncomfortable conversations about race, and that is a very good and incorrigible thing. Very good thing. You got Twitter and Square making Juneteenth actual corporate holidays. Pretty sure Nike, Spotify, and a few others are also doing the same thing. Not a bad call. And then Google slipped into your Google calendar, made Juneteenth the official holiday on your Google calendar, basically a real thing. Google, finally a reminder I appreciate getting from you. Texas made Juneteenth a holiday back in 1980, and then New Hampshire did this randomly last year. Live free or die. Finally living up to that motto, New Hampshire. And then, of course, you got to have

Ben and Jerry's creating an ice cream. flavor that literally blast white supremacy. Today is a tea boy of Juneteenth's happy Juneteenth, everybody. Let's hit our 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 about the hair ain't food. It's air candy.

They don't reflect the views of the robberhood 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. Right. Snacks is digestible. Business news for you.

Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, McDonald's is kicking sounds and bagels off the menu. Permanently, because this is the perfect moment for experimenting. Snackers, you got the dollar menu, you got the breakfast menu, you got the late-night menu, you got the menu menu menu. McDonald's is like a Greek diner in Astoria Queen's. It's 46-page anthology from paella to tacos to lasagna. Which Savlocki did you want?

There's 36 options. So McDonald's has decided, and they announced yesterday, they're slimming down their menu long-term post-COVID-19. Finally, a company that's willing to do less. Recently, McDonald's cut 100 items from their menus, including salads, bagels, and yogurt parfaits. Sad to see it go that yogurt parfait was like two stirs away from just being ice cream. They did it because of supply chain worries it faced during the coronavirus shutdown. Right, and then, you know, Mickey D's also wanted to make it a little bit easier for workers who had to mask up and make McNuggets while you could indulge in them.

Trust me, that yogurt parfait, it required a lot of, like, butt-to-butt scooting by workers in that McDonald's kitchen. A lot harder pulling that off than anything Michel and Chef you've been seeing lately. The result, with 100 fewer items on the menu, Mickey Dease has never felt more fabulous. Never felt more fabulous. Looking good, feeling good. Jack, can you talk to us about what's going on with the speed over at Mickey Deas? The average time spent by consumers at drive-thru is down by 25 seconds.

That's 25 seconds, less crying by your kids in the back. seat, well, they got to have that happy meal. And whatever you ordered for that kid, chances are it was a more accurately delivered order. Oh, sir, was that the bacon ranch crispy buttermilk chicken salad salad or southwest buttermilk crispy chicken salad salad? I said junior bacon cheat, junior. So was it the chicken salad or the southwest salad? So fewer options on the menu means fewer potentials for F-ups. That's right. So you got speed. You got accuracy improving. Jack, how about just overall happiness? The chief marketing officer of McDonald's. said that we've been hearing overwhelmingly for the need to simplify our menu, and now I guess they

finally did it. Snackers, we're going to pull a footnote out there. That is a direct quote because customers, they've been wanting McDonald's to do less for years. The menu feels like a Dickens novel at McDonald's, and guess what? The customers don't want to read. You're reading about all the burger options, you're like going through a plot that's thickening. So McDonald's has decided that lots of menu items, even post-corone economy, will never come back to the menu. So Jack, what's the takeaway for our buddies over at McDonald's. The Corona economy has been one giant business experiment. Snackers, your company probably was curious about work from home and how it would affect productivity.

And guess what? COVID-19 forced them to snag a Zoom account and experiment would work from home. Well, McDonald's was curious whether its menu had grown way too big. They were going to review the menu strategically in 2023, but now they're doing it because of COVID-19. Boom, this became an ideal opportunity to experiment with a new slim-fit menu. Some companies just adapt to change and then revert back to their old ways when it's over. But other companies, Jack and I have noticed, recognize the value of a natural experiment and they learn vital insights. Even if that means no more Mick Lazzania.

For our second story, Carnival Cruises just announced, you know, a casual $4.4 billion loss. But get this, people are still booking cruises for next year. You got mic drop, beat drop, drop and threes, all good things. But the anchor has dropped at Carnival pretty much permanently. It's a straight-up no-sale order taking place right now. Carnival's all over that thing. Now, we've been calling this whole COVID-19 situation the coronavirus. Yeah, Jack and I are actually pretty proud of it.

But Carnival calls this The Great Pause. Sounds like it's something out of a Lord of the Rings novel. The word pause was mentioned 14 times in Carnival's earnings reports to refer to the state of affairs where cruises aren't happening. Once he mentions something more than 10 times, you have to start calling it the Great Blank. Now, let's compare this previous question. quarter to last year. Last year, Carnival made $430 million of profits from the quarter of March, April, and May. But this year, you got to multiply that by 10 and then add a negative symbol.

A $4.4 billion loss in three months. Three months, Snackers, that is 28% of the company's entire value, and it's half a lift. And get this, it won't get better. Carnival expects to lose $630 million every month for the rest of the year. And it can't pass. Maintaining ships. Corporate payroll. Enormous interest payments to ship loans. You got all that to pay for too. And guess what's going to pay for all those costs? Nothing.

There's no revenue coming in during this pause. As we mentioned, the great pause. Oh, and by the way, they've got a big human rights issue going on board right now. When COVID went down, they had ships scattered about the entire world. So they've got crews, they've got to take care for who are like fighting over whether or not they can get balcony access because they're stuck on ships. And you know carnival's based in Panama so that they don't need to treat. their employees well because it's a terrible company. Awkward situation. But here's what fascinated Jack and I. The stock barely fell the other day because of one lifesaver. The five greatest words a Carnival CEO has

ever heard in his life. People are still booking cruises. Human beings are still booking vacations that are cruises for next year. In 2021, cruise bookings are down less than 10%. So Jack, what's the takeaway for our buddies having kind of fun over a carnival. Cruises are a cure for decision anxiety. Snackers, your wardrobe is too many likings. You've got too many video streamers. Then once you turn on the streamer while you're in those likings, you got too many shows and movies to choose from.

In this world of unlimited choice, cruises are one travel decision that plans your entire vacation. You board the ship, you play the game, you stop at some islands, and then there's breakfast lunch slash dinner decided for you. Everything has been decided. You just got to do it. Over the next year, your vacation planning is going to be Harvard. because of COVID. Who's going to decide whether jet skiing is kosher with a mask or without a mask?

Good news, Carnival Cruises will tell you. Carnival is winning vacationers because they'll decide everything for you. For our third story, Snackers, if you're listening on Spotify, this one's meta. Spotify stock searched 13% yesterday to an all-time high. Dial up Andy Cohen because they just snagged Kim Kardashian and Batman to exclusive deals. Snackers, they say there are one million different podcasts out there. that 1 million and 2. Kim Kardashian and DC Comics are both launching podcasts exclusively with Spotify. But this isn't just, you know, hanging out with the Kardashians on E. Think less Bravo, more Law & Order SVU. While you are perfecting your quarantine, Kish, Kim's been getting a law

degree. True story. Apparently in California, you don't need to go to law school. You can just be a quote unquote apprentice and then pass the bar. You got a pulse, you literate, boom, let's get you on the court stand. Who's this, Frank William Abbott now? Jack, you can't handle the truth. Like, you're mixing up law movies there, but I respect it. It's all the same movie, basically. Now, this new podcast that she's whipping out is going to be based on Ms. Kardashian's work on the Innocence Project

about wrongly convicted people. She's bringing attention to people wrongfully in jail and spending big chunks of their lives in jail. And the series is going to begin with, like, a set of 1994 murders, which, spoiler alert, probably jailed the wrong people. Spotify also announced just a few hours later an exclusive podcast deal with DC Comics and Warner Brothers. Not too shabby, picture Batman kicking off his own podcast with the breakdown of what's going on at Arkham down in Gotham.

Now, we think we know why Spotify is interested in this deal. Kim Kardashian has 175 million followers on Instagram. Compare that to Spotify's 286 million global users. Kind of feels like Kim Kardashian should be trading on the stock market instead. You basically got Spotify here, Kim Kardashian here, pretty much. the same. But then you've got Batman, Superman, Wonder Woman, and the rest of the DC crime fighting game, who also bring a few million more followers to this equation. Probably hundreds of millions. And now Spotify has their exclusive podcasts. And it's hoping to draw fans to set up their own

Spotify account. So Jack, what's the takeaway for our buddies who are probably listening to this right now at Spotify? Is this podcast splurge worth it? Yes. We can literally see the return on Spotify's investment. The Snackers, in the last one and a half years, Spotify has splurged almost a unibularly. Unicorn's worth of money specifically on podcasting. Joe Rogan, Boom. The ringer. Gimlet, anchor, parkast. Add all that up to a little bit of rounding.

You're pretty close to a billion dollars right there. All of those podcast companies had existing podcasts with existing audiences that are now migrating over to Spotify. But these latest licensing deals we've noticed are all about growth, not engagement. They're a brand new podcast to try to get non-podcasting people to podcast first with Spotify. Podcast, podcast, podcast, podcast. Now, since the first podcast acquisition by Spotify back in February 2019, the company's value has grown by $25 billion. So Spotify spent $1 billion on podcasts and has grown by $25 billion in value.

Carry the one, add the nine. That's a pretty good return. You spend $1,000 remodeling your kitchen. Now your house is worth $25,000 more. Jack, and you'll whip up the takeaways for us before the weekend. McDonald's tried out a slimmer menu during COVID and decided to, Keep it forever. COVID has created a natural experiment in your life. So what have you learned? What have you learned? Learn that I only need to shampoo my hair once a week. Once a month. Second story, Carnival Cruises isn't cruising, but it is maintaining ships, paying workers, and paying interest on its loans. It's one lifesaver. People still want to cruise.

Third and final story, Spotify has spent about a billion dollars on a collection of about 100 podcasts. Meanwhile, its companies gained $25 billion in value. Now, time for our time. are snack fact today. This one tweeted in by Chrissy Whitty in lovely Dobbs Ferry, New York. You share half of your jeans with your mom and half of your jeans with your dad. Makes sense. What's shocking, though, is that 50% of your genes are identical with a banana. 61% of your genes are identical with fruit flies. And 85% are the same as a mouses. You don't need to phone Bill Nye, the science guy, to know that we're pretty much mostly the same. You're pretty much a banana mouse is what we're trying to say. And we want to give a quick shout out to

Edwina and James who have been snacking together for months. Yeah, COVID resulted in this couple getting separated across the Atlantic. He's in the UK figuring out his visa situation. She's in the United States. Love knows no podcast boundaries. Edwina and James, happy 10th anniversary from snacks. And by the way, Snackers, you heard that bark halfway through the pod today? That is the time to turn around if you're listening to Snacks on a run. It's also the prophet puppy Eloise. whose owner is a snacker. Laura Gilman, your fur baby Eloise, has a great bark. Shih Tzu straight out in New York City.

Last thing before we go, happy Father's Day on Sunday to all those fathers out there. Have a fantastic one. You may as well ask your dad, H, Y, Y, Y, Y, SD. Have you had your snacks day? He's going to be like what? And you're going to be like, you know, if you know. Happy June 10th.

We'll see you Monday. This is Jack. I own stock of Spotify. Nick own stock of Square. And I don't own stock of Carnival anymore. 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.