The Best One Yet - 🏃“Outdoor Voices vs. Lululemon” — OV’s CEO steps down. TJ Maxx beats Retail-pocalypse. Pony.ai hits $3B.

Episode Date: February 27, 2020

TJ Maxx shares popped 7% because its “affordable splurge” strategy is working. Pony.ai is China’s self-driving car startup that just hit a $3B valuation thanks to a big investment from Toyota. And Outdoor Voices’ iconic CEO was forced to step down, so we’re looking at why the cloud-soft anti-Nike couldn’t beat Lululemon.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 Jen. This is Snacks Daily. It is Thursday, February 27th. Will Coleman, Bien Benitos. Welcome to Snacks Daily. This is the best one yet, everybody. Way better than the Snacks Daily we did yesterday.

We got three terrific stories. Jack, first story, what do we got? I'm going to kick this off with a shockingly ironic trivia question. You ready, Nick? Yes, hit me. Who is Richard? T.J. Max, the discount retailer. Or Goldman Sachs, the investment?

Trick question. Actually, not a trick question. Answer is T.J. T.J. Mac stock jumped 7% yesterday on earnings that were just door buster sales. Jack, can you point me to the aisle where I can find the retail apocalypse? Sorry, we're all out at T.J. Mac. Second story, Jack. Outdoor voices changed the game and athleisure.

Made you want to go to work in your leggings, am I right? This stuff is softer than cashmere, but now it's iconic CEO stepping down. She's doing things, if you know, you know. Third and final story is our unicorn of the day. It's called Pony. Great name. This is China's self-driving startup that just hit a $3 billion dollar valuation. on a new investment from Toyota.

I think we need to reemphasize this. Great name. Now, before we talk to all that wonderful stuff, we got to talk about an epic issue that's going to divide a lot of snackers. Polarizing debate, GIF or GIF? Or is it GIF or GIF? This is the most polarizing thing

of the late 20 teams. Now, we're talking about like the GIFs or is it GIFs. There's like little images that are kind of like mini movies. It's not a PNG. It's not a JPEG. No one knows of that. It's dot GIF.

And it's not like, a recent thing. It turns out this technology has been around since 19, like since the 80s. It actually goes back to like the 1880s because remember those little flip books? It's a book full. Yeah, exactly. It's like 40 pages of the cartoon. If you flip them fast enough, it looks like a video. It would kind of be the thing that was in your stocking if like Santa wasn't that creative. That is a gift. But this week, Jiff the peanut butter company has entered the conversation. They are whipping up two versions of Jif peanut butter. Version one, Jack. First is Jiff with the J. Yes. Second is Jif with the Jee. Now here's the thing.

I think jiff is soft, like jiff, so like a soft G. And that's the creamy peanut butter. Because creamy peanut butter is softer than the alternative. Which it is, takes us to our next point. The alternative is GIF. This is a second type of peanut butter. Gift is hard like a hard G. Now, full disclosure here.

4 p.m. every day I'm whipping out some Skippy's peanut butter and putting out a banana, but I may have to change that routine. Are you going Jiff, the soft peanut butter? Or are you going GIF the hard, crunchy peanut butter? We're so impressed with the creativity out of Jif. We may whip up our peanut butter routine. I may move over to Jiff. You don't get a buzzy viral peanut butter moment as the marketing team at Jif every, you know,

once in a while. They have not had a viral marketing moment in ever. Finally, Jif, Giff, it all makes sense. Soft, creamy, hard, crunchy. Peanut butter, incredible. Let's at 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 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. 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 FINRA slash SIPC. For our first story, Jack, how do I look in this tunic and be honest with me here? Not a keeper. It's a tunic top. We're talking about TJX company's brutal name, but you know all the brands. The company continues to thrive in its era of the affordable splurge. Talking about a chain that is the pride of Framingham, Massachusetts.

It's called TJX companies, but you know it better as T.J. Max. Yes. Marshals, home goods, and a couple other retail chains. And don't get them confused with, like, Weston, Waltham, Wellesley, any of those other Boston suburbs. No, no, no, no, no. It's going to anger a lot of Bostonians. Tjc announced its quarterly earnings yesterday. Same store sales growth, which is the growth of sales and stores that are open for over a year.

I'm following you. They rose by 6%. And we know what you're thinking. All the retail and malls out there are shutting. and down, how did that do with, uh, compared to the forecast? Well, they forecasted two to three percent and more than doubled that expectation. Snackers, the stock ended up jumping seven percent and get this. The stock of TJX companies has risen 10 times in the last 10 years. And so you know what you're thinking? Like how big is this, how big really is this company? Discount chain

super premium stock. It's market cap, its value in the market is 77 billion dollars with Right. If you take every single TJX share, put it in a basket, that basket is worth $77 billion. Yeah. So how does that stack up? I don't know. More than Goldman Sachs. More than Caterpillar. More than General Motors and Ford combined. Take lift, multiply it by six. That's right. TJX is worth six lifts. Now, Jack and I were looking into this company further, jumped and snacked out. We were pretty impressed with the equity situation there. 66% of people in managerial positions at TJX are women. That is a high percentage. I think everyone who works there is called a Maxinista. No, everyone who shops that.

Ah, okay, got to catch. Second, sustainability, they have prevented 253,000 tons of unsold stuff from going into a landfell. How big? That's like the size of the planet Neptune or something. They didn't attach a time frame to that 2503,000 tons. Jack and I were highly skeptical. So we assume they're referring to since forever. Yeah, Snackers.

If you don't hear a time frame included, just imagine it's forever. Now, in an age of economic inequality that we have in the United States. Right now. We've talked about dollar stores, which are. are crushing it in this economy. We're talking dollar general, dollar treat. Their stocks are living their best lives. Now, T.J. Max, though, is crushing it as well because they offer low and middle-income Americans

the opportunity to treat yourself without going broke. Right. And they're not positioned necessarily as a discounter. We're calling it affordable splurgeon. A couple other retailers that are struggling immensely are like Macy's and J.C. Penny. They would never want to be known as a discount chain. But T.J. Max is kind of like fine with it. They're borderline bragging about their discount situation.

They're like two hugs away from embracing this thing. They buy discounted things from other companies and then sell them in their stores for a much lower price. The Ralph Lauren polo size medium with a little bit of the line on the top. A little bit of a fray. A little bit of a fray. I'm telling you, I got at least 10 polo shirts from T.J. Max for a fraction of Ralph Lauren. $15 there. It's like $75 on Ralph Lauren and you got to give them your firstborn child. So, Jack, what's the takeaway for our buddies over T.J. Max? What can we learn about TJX that's applicable to other companies?

Snackers, you might be thinking, wow, this company sounds amazing and I want to buy the stock. It's so big. Here's the thing, though. We just mentioned the stock is 10 times higher than 10 years ago. It's really high, and there's no guarantee the stock will go higher. It could actually even go lower. But the lesson for T.J. Max's recipe for success is the affordable splurge. And the question for us is, who else offers treats that won't break the bank,

a.k.a. other affordable splurges in other industries. Where else can an average American get an affordable splurge? Boom, we're thinking the Olive Garden, you get your chicken Fiorentina right there, and it's not that expensive. Treat the family to a tour of Italy. It's going to cost like 100 bucks, but that's not going to break the bank. Old Navy, another retailer doing this with clothing that feels pretty good. A pair of jeans isn't going to break the bag. I think they pay you to get the jeans.

Movie theater. That bucket of popcorn costs $17, but you can treat the whole family and not break the bank. Disney World, once a year, affordable splurge. This story is not just about. T.J. Mac. Think about the other companies and other industries employing the same strategy. The affordable splurge. For our second story, Outdoor Voices just lost

its CEO. And the CEO was the face of the company and an amazing entrepreneur. Full disclosure here, Jack and I are probably wearing Outdoor Voices every weekend. Outdoor Voices is the softest, most comfortable, most stylish applaisure brand I've ever worn. It's like you're in spin class, but you're sleeping in a cloud. It's got that signature gray. It's a combination of white.

gray and black like a Vincent Van Gogh. Kind of messes, like an MC Hesher thing. You know, it's messing with your eyes. Nick has an issue with the sizes. I just want to point this out. Their mediums are too big. I don't think I'm a small. In college, I used to brag that I was a large.

We're now pretty much an extra small outdoor voices. Pretty much we need a Smedium size. We need that to happen ASAP outdoor voices. X medium. Now, the company we're talking about has jumped on the athleisure trend, which is not that new, but it existed before outdoor voices. Nike was doing it. Lulu Lemon was doing it.

even Under Armour is doing it. Right, and now when it comes to athletic gear, Under Armour is focused on the performance stuff. The We Must Protect This House, Jocks. We're talking you've got to pop a blood vessel when you're wearing Under Armour because you're getting your third to last rep in. Outdoor Voices is the opposite of it.

Right. You're thinking like the, you're doing a hike through Half Moon Bay with your significant honor. You got brunch afterwards, you want to look good. If you don't have a dog with you when you're wearing outdoor voices, are you really wearing outdoor voices? You want to wear out of leisure that no one else will be wearing the same stuff.

Now, there are no longer. for their iconic style, which is made up of like geometric and earthy pastels. It's like overlapping colors on top of each other. It's kind of like an avocado toast from like a breakfast in Williamsburg, Brooklyn, exploded on your pants. You described that perfectly, and that's why we're calling it the anti-joc. Right. They even say on their website, humans, not super-humans.

They want to serve humans, not the superhuman jocks from under them. Jack, I walked into an outdoor voice story the other day. They measured my bicep to make sure it wasn't too big to wear their stuff. Now, investors in Outdoor Voices include typical venture capitalists like Google's VCRM and General Catalyst, which is like one of the big ones. Which wouldn't typically invest in a company like this, but then you've also got brands that have invested in them like Warby Parker and Jessica Alba's honest company. And then you got a strategic investor who's just like got experience in this field, Mickey Drexler, who I founded J.Crew? Led's J. Led J.Crew. Had a big role there.

Now, the biggest innovation of Outdoor Voices besides the amazing clothing we just described, the tote bags. Oh my God. The tote bags, they didn't think this would be a success. It is a strategic success. If you just walk in and ask for a receipt or something. They'll make you walk out with a tote bag. They stick that thing on you. Now, these things are nice. They're canvas. They say outdoor voices in blue. Full disclosure, I bring one every weekend trip and it's my man back. Also, if you're on a bachelor or bachelor party right now, Snackers, we guarantee someone in your crew is using an outdoor voices toot bag. All right. So the story sounds very good so far.

Right. But then over the weekend, things got really bad. When the board, asked founder Ty Haney to step down. Ty Haney was the face of the company, went to Parson School of Design? Design all about design, all of them design. Is that part of NYU? It's kind of just nearby. So the board asked Ty Haney to trade in her CEO title and just go with founder instead. She's awkward because she already kind of had that title.

She already was the title. So that didn't work out. So yesterday at 9.14 a.m., Ty slacked the whole company and said, quote, With heartbreak, I've tendered my resignation. Now, Jack and I jumped in and looked at this further when we heard that, and we found that there have been some pretty interestingly bad financial situations going on Outdoor Voices. It's sad that Ty has to let go of her baby, but the company only generated 40 million in sales

last year and was losing $2 million per month. Right. Then they had to close their New York City office, and then they were having trouble fundraising to get more money to continue on. Now, our diagnosis here is that Outdoor Voices took a little too long to go mainstream. Right. They've developed a cult following that loves that trademark pastel athleisure style. Nick and I are a member of that cult.

But to become a mainstream success, you have to appeal a little bit more to the masses. They grew beyond the start of phase into a scale-up phase, but they made some mistakes along the way that didn't adapt to mainstream appeal. On outdoor voices, you could not find those basic black leggings. Right. That Lulu Lemon made famous. Yeah, black leggings are like the Tomogachi of our generation. And they just finally came to Outdoor Voices. last year, which was a little too little,

a little too late. So Jack, what's the takeaway for our buddies who are doing things over at Outdoor Voices? We've got to ask, why is Lulu Lemon succeeding and why is Outdoor Voices struggling? Snackers, both these companies are innovative brands in Athesia. But one of those companies Lulu Lemon created a new product,

the other one only created a new style. Lulu Lemon created the entirely new thing, yoga pants. Outdoor Voices took an existing product, yoga pants, and added a new style. Yeah, like fashionable yoga pants you want to be graved in. what Outdoor Voices had, like as a differentiator, that is harder to defend. But a new product category, that created entirely new value.

So Lulu Lemon has managed to take yoga pants and turn it into a $31 billion company. But Outdoor Voices style was copied by Nike, Athleta, and anyone else who could bring it mainstream. You see a whole bunch of Outdoor Voices style knockoffs these days that's not good for outdoor voices. For our third and final story, Jacqueline, I wanted to say this for a long time. Jump on the pony, baby. You're a pony. It's officially the self-driving car company of China. We're talking about pony.

That was a Richard Simmons comment, by the way. You remember the fitness instructor with the big offer? He's a big snacker. He loves this pot. He used to motivate people with, you're a pony. He still does. Now, pony.a.i, it may not matter that it's the self-driving car company of China to its American competition. And by the way, Snackers, we're not here to lecture you on like the five levels of self-driving.

We've done that before. We're not going to do it again. Full disclosure, by the way, it is our dream to have a self-driving podcast studio in a car someday. When there's a foot of snow dumping in the mountains, we're going to do our pod on the way to the mountain. This is Nick. I'm on I-95 right now. Now, we've talked a lot on this podcast about the leaders of self-driving car technology. Right, you got Waymo, which is Google's self-driving car company. You got Tesla.

You got Uber. And you got Cruise, which is owned by General Motors, SoftBank and Honda. And when you're eyeing these guys up Snackers, Waymo is the one you should know is the one that's leading. They have like a hundred million miles of self-driving testing that's like on the odometer. They've got 1,500 employees, which is like a small Nescac college. Yes, it is. Now, here's the thing. They still don't have a real product you can use outside of Scottsdale, Arizona.

Scottsdale, Arizona, which, by the way, like the capital of innovation in the United States, as our legendary snacker, Scott likes to remind us. Scott from Scottsdale. Right. He's a great guy, and it's a great place. Now, there's one more company we need to talk about after yesterday's news, pony.a. Oh, best practice here, entrepreneurs out there. Drop a dot AI at the end of your startup name, and boom, that's like an excellent.

extra $50 million in venture fundraising. I'm launching a company. It's called taco truck. .AI. Everyone rejecting your pitch deck, drop an AI at the back of your name. pony. .AI is China's leading self-driving car tech company. Now, here's the news from yesterday.

Toyota, the world's most profitable and largest car company. By far, by the way. Just invested $400 million, huge sum of money, in pony.com. And now pony. comi.com is worth $3 billion, according to that math, the $400 billion investment. Again, this is a big deal because Toyota's so profitable, it is very careful with its money. It's quite an endorsement. Yes.

It'd be like if Richard Simmons endorsed Peloton as a fitness thing. Which would be awesome for Peloton, even though Peloton execs probably don't want that to happen right now. So, Jack, what is the takeaway for our buddies over at Pony? Pony could get blacklisted in America, just like Huawei has. Snackers, Pony is actually testing in Silicon Valley right now where a majority of the self-driving research and development is going down. Full disclosure. I went to University of Michigan for grad school, and Detroit has a lot of self-driving tech as well. But even though it's doing that research in the U.S., Pony could still get banned in the United States someday.

Think about it, Snackers. America and China are having a tech-cold war right now. American regulators aren't trusting Chinese tech. Chinese government, not trusting American tech. Exhibit A, Google and Facebook are both banned in China. Exhibit A small-lowercase I won. Huawei's banned in the United States. So if you're a U.S.-based self-driving tech company like Waymo or like Cruz or like Cruz or like Tesla, you might be nervous about this big investment in Pony AI. You'd be nervous that Toyota is putting its self-driving eggs all in a Chinese basket.

But competition from Pony may not matter at all. And that's because if more Chinese tech gets banned in the U.S., Pony might be banned in the U.S. And then it doesn't matter. And you don't have to worry about Pony. Jack, can you put down the camomile and whib up the takeaways for us over that? DJX companies has mastered the affordable splurge. They're embracing their discount status, unlike Macy's and JCPenney, both struggling. Our second story, Outdoor Voices, which is still a private company.

Good point. No publicly traded stock. Just had its CEO step down. It had momentum with its new style, but it's slowing because it's struggle to go mainstream. Our third and final story, pony. I love that. Is the leading self-driving tech company in China. That may not matter to U.S. companies because Pony could get banned someday in the USA.

Now, Snackers, time for our snack fact of the day. This one sent in from Alexis in Atlanta, Georgia. Now, this one is kind of a correction. True. But Alexis is in Delta country, so we were, like, waiting for an Atlantean to, like, reach out to us on this. We were, Georgia Peach. Now, we mentioned a couple weeks ago that Ed Bastion, the CEO of Delta, he commented that people have the right to recline, but should politely let the person behind know that they're about to recline. Jack and I were like, yeah, must be nice to say that all the way from first class.

Well, he himself said he doesn't recline. Right. And we're like, that's because you're on a king-sized bed in first class. Turns out six foot like 14, Ed Bask. flies mostly coach on domestic flights. In fact, Delta has a company policy that executives need to fly coach on all flights under three hours

so that they can get the typical customer experience. Wonderful to hear that. We're a little wondering about what's going on with the international flights. They were silent on their policy on international flights, so we think that king size bed thing applies. Right, they're probably getting two king's beds

and bringing like six service animals for each of them. Snackers loved having you with us today. Jack, I loved your sweater. It looks great. Samin colored. Thank you. Thank you. I like your Oxford.

Remember Snackers. H-Y-Y-S-D. Have you had your snacks daily? Ask your friends. If you have, post it. We want more people snacking. By the way, this is Nick and both Jack and I both own shares of Lou Lemon, and we do wear outdoor voices. Emphasis on the both.

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.