The Best One Yet - 👑 “Queen of the Rental Romper” — Urban Outfitters’ rental win. Apple’s movie theater. Ford’s dating profile.

Episode Date: March 27, 2023

Urban Outfitters is one of the few fashion stocks actually up right now and it’s thanks to one thing: Rental Rompers. Apple’s next big thing? Spending $1B every year on blockbuster movies for movie theaters. And Ford just updated its dating profile: It’s got an electric surprise.$URBN $AAPL $FFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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. Welcome back. It is Monday, March 27th. And today's pod is the best one yet. It's Teaboard. Nick, how is Aspen? Did you get your tongue stuck on a chairlift like dumb and dumber?

The altitude of getting to me, Jack. You've been wearing an extra pair of gloves this whole time. Well, the altitude's so bad I've got an IV of coconut water right now, Jack. In the meantime, Jack, what's our first story for today's pod? The biggest player in clothing rental. is not rent the runway. Get this, Yeti's Urban Outfitters is the new queen of rental.

For our second story, Apple is spending $1 billion a year to produce movies specifically for movie theaters. Because a movie theater screen happens to be the same size as a billboard. And our third and final story is Ford. Ford just revealed two secrets

about their electric cars. Ford just updated its dating profile. But Yeties, before we hit that fan fantastic mix. I just love this mix. This is a great mix, Jack. Horters Almanac Week 158. Things are running out of in the economy. Jack and I have been keeping track for you. This week we are running out of cookies. Specifically, Girl Scout cookies. That's right, Yeties. It is that time of the year when your boss is going to stroll by your desk and ask you to buy some cookies for their little girl. You want a bonus, so you're going to buy some

cookies from your boss directly. Girl Scout cookies. It's an industry that's a profit puppy. This, the Girl Scouts are bringing in a whopping $800 million in revenues a year. Hey, Mark Benioff, that's a sales force. That is three all birds worth a revenue, Jack. But the newest Girl Scout cookie concoction is MIA. We're talking about Raspberry Rally. Picture a thin mint infused with Raspberry Ganesh. Raspberry Rally is the latest Girl Scout cookie.

It's a freaking new flavor that is nowhere to be found. I mean, Jack, Raspberry Raleigh, it's the new Samoa. It's delicious. America has such a craving for this new cookie, we now have a nationwide shortage. We are running out a raspberry rallies, man. Gahooke, Christmas! But in every cookie, there's some potential coin to be made. Besties, get this.

People are buying this Girl Scout cookie for five bucks and then reselling it on eBay for $100. We're not talking ticket scalping. We're talking cookie crusting. What Jack and I are saying here is that if you got a closet full of these Girl Scout cookies, then you are the next Warren Buffett. Now, Yetis, Girl Scout teaches girls about friendship, learning, and adventure. But apparently, Jack, they're also teaching about speculative investing, secondary markets, and day trading. And cornering the market.

Who took the cookie from the cookie jar? Not me? Tiffany, when did you get that, Lexus? Uh, it's my mom's. Jack, let's in our three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea that caused a cultural T-percent. 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. For our first story, Urban Outfitters, most exciting business isn't what it sells, it's what it rents. Urban's clothing rental business, newly, is beating rent the runway. All right, well, Jack, you know, we just finished Paris Fashion Week, but I don't see you or me in Paris right now, and I'm kind of confused.

Who are going to blame? The U.S. Postal Service or Anna Wintour? Hey, Anna, our invite got lost in the mail. again, next time just DM us. But Yeties, the biggest news in fashion isn't Pierre Caddo. It's Urban Outfitters. Get this, Yeties. Urban Outfitters was one of the only fashion stocks that was actually up in the last year.

Urban Outfitters beat American Eagle, Abercrombie and Fitch. It even beat the gap. And Jack, what was the key reason why Urban Outfitters is power in high as a stock these days? The star of this Philadelphia-based fashion company is its clothing rental business, newly. Newly. For 88 bucks a month, you get like six items shipped to you in a box. It's actually shipped you in a dulfabag. I should know because I return my wife's every month. Or maybe you're returning your own, Jack. You can admit that as well on the pod. I'm actually waiting for a men's line to come out, which hasn't happened yet.

So Jack or Jack's wife wears the clothes all month and then sends back what they don't want, keeps what they do want. It's a monthly clothing rental business with the option to buy. And then urban outfitters acts like a giant laundromat and rinses and repeats the whole thing to other people. According to Urban's management, this division is outperforming all expectations. Okay, 150,000 subscribers. Revenues nearly tripled in the last year to $130 million. Now, this division is not profitable yet, and it only represents 5% of Urban's clothing sales. But it is also the fastest growing part of the entire Urban Outfitters company. Which leads to an existential question. Cannibalization.

Cannibalization. Like, can Urban Outfitter sell something? to you, but also rent to you at the same time. In other words, if I rent six cute tops from urban outfitters every month, no judgment. Then I don't ever have to buy clothing because I get a fresh wardrobe every month. That is the cannibalization problem, but we just got fresh data from Bloomberg that gives us the answer. The rental business newly is not cannibalizing urban store sales. In fact, get this, the majority of newly customers are actually new to urban outfitters.

So when I rent a romper on Newly, I'm not stealing sales from Urban Outfitters. It would be a romp him, but instead, Jack just got introduced to Urban for the very first time. So renting out rompers isn't eating slices of Urban's existing business. No, it's not. It's growing the urban pie, which is a good thing. So Jack, what's the takeaway for our buddies over at Urban Outfitters? A second shaker can beat a first mover. Yeties, let's go back to 2009.

That's when Rent the Runway pioneered the closed. clothing rental business. They created an entirely new disruptive concept. Thanks to rent the runway, you could rent an unaffordable Chanel dress for a big wedding you were going to and then return it when you got home. Or buy it if you loved it. It's an innovative concept. They're still innovative today. But the wildest stat about this story is that Neely was founded 10 years after Rent the Runway was. But now Neely has more users than Rent the Runway. Rent the runway was first. Newly was second. Yet newly, Urban Outfitter's side hustle is now bigger than Rent the Runway's main hustle. The insight here, first movers lead the market, potentially becoming synonymous with the category.

But second shakers see what is and what isn't working and they can launch more strategically. That's the second shaker advantage that explains newly's success. For our second story, Apple is going to spend, get this, a billion dollars every single year to make movie theater. movies. Apple is trying to produce what we're calling the first ever money making commercial. Okay, but Jack, before we jump into all that, can we say that Apple controls the smallest screen in your life? Your Apple Watch? Okay, yeah. But they also kind of control the medium-sized screen in your life. Your iPhone? Your iPad. Well, get this. Apple is now coming for the biggest screen in the world. Your iPad Pro? Are we talking to movie theaters? Yeti's Bloomberg. Just found out that Apple is

going to spend $1 billion a year to produce movies for movie theater debuts. The way Tim Cook sees it, cinemas are the iPad Pro Plus Max. Now, we're not talking indie films here, are we, Jack? Like, we're not going to see subtitles. This isn't coming out in like a Williamsburg theater, right? No, Apple is bringing out the big guns of Hollywood. Okay, Apple, get this. They are doing a Martin Scorsese movie in theaters starring Leonardo DiCaprio.

The last time Scorsese and DiCaprio partnered up was the DePaddy. Okay, is this like The Part of Two? Do we know what's happening here? I'm not sure what's happening. I don't think it's departed too. Okay, hit us up at Teaboy Pod if you've got a leak. In the meantime, they're also doing a Ridley Scott movie. And Jack, he was the director of Gladiator. What's he going to do for Apple? And this movie is based on Napoleon, which I'm excited to learn about through a movie.

Big question, who's going to play Napoleon? That's a little awkward. My votes for John Franco. There's got to be at least one actor out there with a literal Napoleon complex, Jack. That's good. That's good. Now, ladies, we're not talking to MGM. We're not talking universal.

Studios. We are not talking Paramount and we are not talking about Warner Brothers here. We're talking about Apple becoming a major player in Hollywood big picture blockbuster movies. Apple has got enough Oscar winners involved in this initiative to make Sally Field cry again. But yet he's the plot thickens because Apple is not the only tech character in this story that's going full Hollywood. Adam, can we do like a dun-dum? Amazon acquired MGM studios, remember? Yeah, Amazon Jack. They've got the Los Angeles itch. right now. And Amazon, according to Bloomberg, is planning 12 to 15 of their own theatrical releases

next year. So like, it's not just Apple. Alexa wants an Oscar two right now. But Nick and I were thinking to ourselves, this doesn't really make sense. I mean, Jack, what's going on here, right? Like, theaters are one of the only industries that hasn't recovered from the pandemic. You might have seen Top Gun 2 in theaters, but the box office is still 40% below the pre-pandemic normal levels. Okay, but then Jack and I kept talking about it over the weekend. We're like, and tech companies want to go direct to your living room. They don't want a movie theater middleman. So why are two of the biggest tech companies that are obsessed with growth and scaling,

doubling down on a dying business with a middleman? Jack, any instinct on what it could be? Maybe it's the popcorn. It's a junior mint. So Jack, what's the takeaway for our buddies over in the concession stand? Apple is creating the first ever money-making commercial. Honestly, Yeties, we were thinking. about this all weekend. Why is big tech jumping into a slowing, physical, brick and mortar,

century old industry that asks you if you want butter on your popcorn when it's not actually butter that they're putting on your popcorn? We know what you're off to, Regal Cinemas. Now, the answer, it's partly because Hollywood has an ego. Scorsese won't do an Apple movie unless it's on the big screen. But the other reason we think is because the big screen is really a giant billboard for Apple TV plus, their streamer. That's right. If you think about it, the theatrical release is one giant commercial for Apple's streaming service. Here's how Jack and I see it. A movie theater goer is going to be reminded of the great movies on Apple TV Plus, and Apple's going to bring in box office revenue from that movie.

Apple's going to make money on movie ticket sales while advertising their streamer. That is why Big Tech is buying into a dying industry, movie theaters. Apple is creating a 90-minute long money-making commercial. And now a word from our sponsor, Robin Hood. In the future, you may wear pants on your head and shirts on your feet. We don't know what future you will dress like. But we do know that future you will be happier if present you prepared for retirement. Future you would be really happy to wake up 40 years from now with a loaded IRA.

Although no one knows how investments will perform, an IRA offered by Robin Hood is like giving Future You a gift from yourself. Because Robin Hood matches 1% of every eligible dollar you. contribute to future you. It's the only IRA that does that every year. Limitations apply. To get started, go to robinood.com slash t-boy and get your first stock for free. Conditions apply. That's robin hood.com slash tvoy. All investments involve risk. Contributions to and withdrawals from IRAs may entail tax consequences. Robin Hood does not provide tax advice. Robin Hood Financial LLC, member SIPC. For our third and final story, before we, before we hit this story, Jack, I think me and all the yeties want to know. If you did

pursue that romper. What color are you thinking for this thing, by the way? Flannel. That's right. Flannel. You're going to show Urban Outfitters who's boss. For our third final stories, Yiddies, we got Ford Motor Company. Ford just showed its ugly electric car losses for the very first time. Investors are keeping the faith, though, because of the light at the end of the tunnel. Now, Ford, it's Nick and Jack here. We know what you've been up to. You should come clean for it. Ford just updated its dating app. profile picks. It's dating at profile picks. Look, Yeties, each quarter publicly traded companies have to

show us an earnings report. They have to show us how much money they made and how much money they still have. But that's not it. What else do they have to do in each of those earnings reports, Jeff? Every company announces how much each segment of their business made individually. And the way Jack and I see it, that segment breakdown in every earnings report, it's really a company's dating profile. Specifically, it's the five picks that you get to put in your dating app profile. But for investor Tinder. Jack, what was our buddy Dan's rule for like the three pictures you have to have in every dating profile? Do you remember what it was?

Well, this is a little dated, but every guy needed a picture with their mom, a picture in their athletic uniform, and a picture with their dog. Or I think for men and women, it was like the three peas. You needed a picture with a puppy, a picture of a place, and a picture with people. I guess so. That sounds right. Either way, you can strategize love. Well, Ford always showed investors a picture of its North America business, its European business, and it's Asia business.

But now Ford has decided to mix it off. It's doing something a little bit different, right, Jeff? New me, new Ford, new Ford, new Ford just made over its dating app with a new segment look. Ford is shown off. Instead of travel pictures, Ford is now going to show investors pictures of its three different types of cars. That's right, yet he's Ford's three new segments, are electric. cars, gas powered cars, and commercial fleets. But funny thing, Jack, and I noticed about these new Ford segments. And what is that, Jack? The new Ford picture looks pretty bad. One of them in particular. Yeah, specifically, the electric cars from Ford. This is the first time investors have seen a picture of Ford's electric car division. And what do we see, Jack? A $2 billion loss last year. Wow, that is not

an attractive look for a dating profile. Ford sells the second most electric cars in the United States behind Tesla. And yet, while Tesla's electric vehicles made $12 billion in profits last year, Jack, what did Ford's do? Ford's lost $2 billion. Like we said, not a good look. But Jack, what's the takeaway for our buddies over at Ford? The light at the end of the tunnel is twice as bright. Okay, here's the shocking thing, Yetis. How did investors react to Ford revealing its ugly electric vehicle picture? Surprisingly well. Really well. Like Ford stock actually rose last week, despite everything we just said. Despite the big losses in the segment that Ford is betting their future on, their electric car segment. And here's why.

Investors know that there is a light at the end of the tunnel, and that light is more profitable. Long term, electric cars are simply more profitable than gas guzzlers because electric cars are simpler to make. Despite your in-law's skepticism, for example, Tesla's profit margin, 16%. That is double Ford's General Motors and Toyota's profit margins. That's why investors are okay with Ford's huge electric car. losses today. Because they know there is a light at the end of the tunnel and that light is twice as bright. Jack, can you whip up the takeaways for us to kick off the week? Newly, the clothing rental business is Urban Outfitters as shining star. Because a second shaker

can beat a first mover. For our second story, Apple has won a best picture already for an indie film, but now they're getting into blockbusters. Think of them as like 90 minute money making commercials for Apple TV Plus. And our third and final story, is Ford. They just showed us a picture of their EV profitability. It's ugly. But there's a light at the end of the tunnel for electric cars, and that light is more profitable. Now, time for the best fact yet. This one sent in by Chris Harpy from lovely Asheville, North Carolina. The largest bill ever printed by the U.S. Treasury, like the largest, you know, U.S. dollar. Talk to me, Jack. It's not the $100 Benjamin, Ben Franklin, $100. Okay, we know what you're thinking. All right.

biggest U.S. bill. It must be the $1,000 bill, right? I've never seen a $1,000 bill. I don't know. It's like Narnia. You've got to believe in it for it to exist, Jack. It's actually a $100,000 bill. Not $1,000, not $10,000. The United States once printed a few $100,000

bills. But only a handful of those $100,000 notes were ever printed. So the few that are left are probably worth more than $100,000. Yeah, it's the only bill that's dishonest about its value. In a lot of ways, that bill is like a Girl Scout cookie.

How? Because they're getting sold on eBay. They're getting sold on eBay. Yeah, that's right. That's right. We said all takeaway on this, man. Yeah, the price tag is dishonest. It's actually way more.

Yetis, you look fantastic today. And if you haven't yet, remember to drop down and give us a five-star rating and review. We have a few more than 9,000 ratings on Apple. We'd love to hit that $10,000 note. Why round up when we can hit 10K? Nick and I, we'll see you tomorrow.

I can't wait. And before we go. a shout out to legendary Yeti, Alice in California, who has her third round of chemo this week to beat cancer. And mazeltoff to Sidney Lewis and Jacob Cohen, who just got engaged in Chicago. And Bear Broussor is going to his first concert ever at four years old, and it's a K-pop concert.

Alex Chang has two things to celebrate, a master's degree and a new job down in FLA. And Daniel A just got a new job as a data scientist over at The Gap. Congratulations to Hannah Kansas for getting a new, job in San Diego. And Eliana and Jeremy Greenberg just got married in lovely Memphis, Tennessee. And the Good Guy of the Week Award goes to Sterling Salzberg, who just helped move his entire family from Maine all the way to San Francisco. And a happy birthday to Virginia Allen, who's celebrating that birthday with her sister in Atlanta right now.

And happy 22nd birthday to Carolina Goldman in New York City. And bon anniversary to Matthew Rahman in lovely Paris, France. Happy birthday to Jessica Yang, a legendary Yeti down in Austin, Texas. And Manisha Bajaragi Kaliankar is celebrating that birthday on a beach in Cancun, Mexico. And happy birthday to Jane Sio, who is celebrating down on the one happy island of Aruba. And Andrew Bolton, enjoy that birthday over in New York City. And happy birthday to Josh Manus, on his way to work in Reno, Nevada. This is Jack. I own stock of Ford and Amazon, and Nick and I both own stock of Apple and Robin Hood.

And now a word from our sponsor, Robin Hood. Is there anything more stressful than a buffet? You got the chicken or the fish, the salad, or the salsa? You're paralyzed over potatoes versus pork. Well, when you're saving for retirement, you may feel that decision fatigue, too. Which stocks or ETFs do you invest in for your IRA? Well, with Robin Hood, you can get a personalized recommended portfolio. You can pick your own stocks or ETFs, or you can do a bit of both.

You can do their recommended burrito bowl or pick a little bit of everything. And customizing your retirement portfolio, is commission free. Other fees may apply. To get started, go to robin hood.com slash T-boy and get your first stock free. Conditions apply and recommended portfolios are not available to residents of Massachusetts. That's robinood.com slash TBOI. All investments involve risk, contributions to and withdrawals from IRAs may entail tax consequences. Robinhood does not provide tax advice. Robin Hood Financial LLC, member SIPC. I'm just kidding. I rolled with it. I mean, dude, I was reading about this. The first rule of stand-up is you never say no.

That's why I was asking so much, actually, about your line before that you wanted me to say is there's no no in stand-up. There's only yes. It was a Tina-Fa-Fa-thing. Tina-Fa-said stand-up dies when you say no to someone's idea. That was great. But then you said no to your own idea.