The Best One Yet - Rename Black Friday — SoulCycle vs. Peloton — Dollar Tree’s 19% stock plummet

Episode Date: December 2, 2019

Black Friday in-store shopping actually fell from last year — but purchases made on smartphones and with in-store pickup dominated, so we’re renaming it: “Mobile Cyber Pickup Week.” SoulCycle just lost its CEO while Peloton stock had its best week ever, so we’re getting on both bikes. And Dollar Tree’s stock dropped 19% last week, so we’re looking at how tariffs are about to change everything.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. Welcome back. It is Monday, December 2nd. This is weird. Happy belated Thanksgiving, everybody. Now, despite all the odds, this is the best one yet.

It's the best one we've definitely ever done in December. Jack, can you hit us with the first story over here? All right, we're talking Black Friday. The number of shoppers hitting stores Friday to splurge and burn off all that turkey and stuffing calories actually dropped this year. But it still set records in a funny way. Jack and I got a new name for this thing. Black Friday's no. longer Black Friday. It's mobile cyber pickup week. We're working on that. It's a working title. Doesn't quite

have the same ring. My second story, SoulCycle just lost its CEO. Pelton stock, though, had its best stock week ever. Good for you, Peloton. We're tapping our butts back and we're going to compare the two spinning companies, perfect timing to do this. Third and final story. Third and final story, we are all pretending that the trade board isn't real. But starting December 15th, we're all going to feel it hard. And Dollar Tree stock. limited 20% last week because they're feeling it right now. Now Snackers, if you're anywhere that is involved with oxygen, air, or the sky, or nature, you may walk outside and experience winter storm Ezekiel crushing your bones and comfort. Yeah, the weather channel took it up a notch.

We're not just naming hurricanes. We're naming winter storms now, and we are mid-winterstorm Ezekiel. So we decided to kick off this December with a particular snacks daily where Jack and I are not in the same location, apparently. Snackers, here's the deal. I was in Vermont for Thanksgiving. I was planning to fly home to California on Sunday. Got stuck in Atlanta's airport for like 12 hours. So I'm doing the pod from the Delta Lounge in Atlanta's airport. Yeah, Jack's actually squeezed between like an anti-ans and a Dunkin' Donuts right now. Stuck between the fumes trying to record this pod.

So Nick has a home field advantage here. He's literally recording from his childhood bedroom in New York City. I'm in the Delta Lounge. I'm staring at a bunch of hot wheels right now. So I'm hoping that my fellow traveling companions excuse me for doing this a lot. POD and Snackers. Sorry for the poor audio quality. We'll be back normal tomorrow, but the show must go on.

Rain, sleet, shine, or airports, nothing will prevent us from delivering your snacks. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers. The snacks about to hear rain food is air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, we're not 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 Fenra slash SIPC. For our first story, Black Friday is dead. Long live mobile cyber pickup week. Mobile cyber pickup week. That's what we're calling.

We love it. Odds are you weren't trampled by your neighbor to get 70% off an instapot on Friday like you may have done in previous years. Meanwhile, Jack and I were busy looking at the numbers here. The Black Friday sales data is in, and the aggressive 24-hour brick-and-mortar splurging holiday that we know it is over. We got two data points here to back it up. Number one, sales at physical stores dropped by 6% compared to last year.

That's one of the first drops I've ever seen for Black Friday. Never even heard of a drop. Didn't know that kind of thing could happen on Black Friday. Data point number two, foot traffic. So the number of human beings going in to bump into their neighbors and elbow them out of the way, that dropped by 2% as well. Now, just as we're done Black Friday over here in the United States,

in Europe, it's like Black Friday's still going on. They're having fun with this thing. We imported it. Exported it. Thanksgiving is an American holiday. They do not celebrate this in Germany or France, but they do have Black Friday starting this year. France is calling it Black Friday, and Germany is just calling it Black Week.

So it's a seven-day long thing. Awkward name doesn't really make any sense. But instead of physical violence at Walmart, the thing we noticed this year, Walmart.com, is where all the sales are happening. E-commerce sales on Black Friday jumped by 20% from last year to hit a record $7.4 billion, but that's not even the surprising part.

No, that's not surprising. Your mom could have predicted that. My mom uses like an iPod as an iPhone from like six years ago, and she could have told you that I was going to happen. But the big surprise this year was the domination of smartphones and pickup orders. Of all the online shopping that had on Friday, 65% of it happened on mobile devices, happened on smartphones, and that's a 35% jump in mobile phone sales from last year. The biggest day ever in online shopping on phones was on Friday.

Now, let's say you're on your couch. You're a little too lazy to order on your phone, but you also don't want to pay that shipping fee. That's why you would do pickup. And turns out that the buy online pickup and store option jumped 43% from last year. So Friday was a huge shopping day. It just didn't happen physically in the stores. So, Jack, what's the takeaway for Black...

I'm sorry, mobile cyber pickup week for our buddies over in mobile cyber pickup week. Nick, the future is Omni Channel and Target and Walmart are leading the way. Now, Snackers, we know what you're thinking, Omni Channel. It's a brutally sounding name. It's actually a piece of jargon. Jack, can you give us the dictionary definition here of Omni Channel for retail? Actually, not the dictionary definition. We're going to break this down for you.

Omni Channel is making the physical online and everything in between shopping experience work together like synchronized elves like Buddy, the elf. So let's say you're in like a in the market for like some spanks. You just need a new pair of spanks. If you can seamlessly buy those spanks in store or online or ahead and then pick them up at the store, that means that spanks is offering you an omni-channel experience on all sales channels. It's like how do you want to order? How do you want to pick it up? You can get any of those three in online, in person, in store, whatever you want. Now big box veterans, we're talking like the targets and the Walmarts out there. They've invested in like all the software.

the logistics that make Omni Channel possible. And that's why they won Mobile Cyber Pickup Week for 2019. Nick, I know what you're thinking. What about Cyber Monday? That's today. Yes. Will Amazon continue dominance of Cyber Monday, like it as in previous years, or will Target and Walmart start to dent that growth?

Or will comparison shopping from your desk today, placing that order on a toilet or picking it up from Target or Walmart on your way home? Is that what's going to win? For our second story, wait a second. Jack is a flight to take. Tampa boarding next to you. SolCycle and Peloton are having very different cycling stories right now, and SoulCycle just lost at CEO.

By the way, I'm like Jerry from Queens, long-time listener, first-time caller into the pod, but I am calling into this podcast. Love it. What have you got for us, Jerry? What can you share with us? All right, so we're talking about SoulCycle and Peloton, Nick. SoulCycle is the spin studio with a cultish group of followings who are obsessed with Fiji walks.

Yes, very true. And Peloton sells spin bikes for home use to. a cultish group of followers who are also enjoying home enhanced Fiji water. I think SoulCycle and Peloton referred to their users as part of the tribe. Yeah, I would know. They're real serious. I like to hit bike number 36. That one has always got a good luck.

You can never see yourself someone's blocking in front. It's kind of annoying with the mirror. But we got two stories about these two companies going in two different directions. One's biking uphill. One's going downhill. SoulCycle is the original spin studio. By the way, 97% owned by Equinox Gims. No one really knows that.

So if you're just outing between a SoulCycle class and an Equinox spin class, it's pretty much potato, potatoes, bandex, bandax. Jack, you got a SoulCycle Snack Fack for us over there? They tried to do an IPO in 2015. I was excited about it. I was ready to cover it on what was then called Market Snacks. They issued the S-1, but then last year they finally killed their ambitions, didn't do the IPO, pulled the plug.

So we got a new sad snack fact for you. The CEO, she just announced that she's stepping down last week right around Thanksgiving 7. SoulCycles investors, Nick, seem like they want to install a new leader because they're kind of struggling. Meanwhile, SoulCycle's been trying these ridiculous things. They're trying a new thing called like SoulCycle Retreats, which is like a mini summer camp run by SoulCycle instructors who basically think they're the second coming of Deepak Chopra and Spandex. It's a wild new attempt. Nick, it sounds like you're on the SoulCycle email distribution list.

It's aggressive. They do it frequently. There's not much of you know that. All the changes, most of the struggles of SoulCycle, in our opinion, is because of Peloton, which is the tech-enabled company that sells $2,000 at-home spin bikes with a beautiful iPad so that you can basically do a SoulCycle class, but from the comfort of your own home, and you can sweat everywhere and nobody cares. Now, Snackers, as you know, Peloton went in a different direction.

It actually did its IPO this past September, and the stock has been crushed because we know what we worked at to IPOs. they basically made investors scared of IPO companies. Right. We Work was a profit losing, a loss-making tech company, and so was Peloton. And that guilt by association was very bad for Peloton stock. In the meantime, we're entering a very important time of the year, specifically for companies like Peloton. They're selling a health thing and a tech thing.

Think about it. If you're like me, you ate three pounds of turkey this weekend with three pounds of gravy and just as much stuffing. So you might feel guilty about it. out all that food you ate. Plus, you got the holidays coming. After that, we got New Year's resolution. This block of like three months that's starting right now is when Peloton sells most of their bikes. So this is crucial. Now, Snackers, the good news on Friday for Peloton was that Key Bank said that Black Friday sales numbers for the company look great because this could be on every tech list, every new parents list, every fitness nut list, probably Peloton, Peloton.

Yeah, Google Peloton, and you're going to find like it's at the top of one of those lists, Nick just mentioned for holiday sales. And that's why the stock is up 72% from its all-time low back in October, which is way above the IPO price. So, Jack, what is the takeaway for our buddies trying hard, burning calories over at Peloton and SoulSight? Here's our big question. Are gymnasiums? Are they more like blockbuster video or are they more like movie theaters?

Jack, I think the Duncan sense are getting to you because you just said gymnasiums over here. Now, the at-home fitness craze that like basically everyone's doing right now, Now, it's driven by tech, and tech is booming. You got a lot of examples out there. You got Peloton, Mirror, Tone it up, yoga with Adrian, glow. There are all these solutions that don't want you to use gyms. They want you to use their tech fitness products. Exactly.

You can access all those things Nick mentioned on your computer, on your mobile device, on your smart streaming TV. All of these companies are trying to get you to kill your gym membership and just work with them instead and pay like $10 a month through an app. Now here's a wild thing that Peloton said that Jack and I find fascinating. They want to do to gyms what PlayStation did to arcades. Exactly. Home video games made that arcade downtown. We stick all those quarters and you'd break a $5 into like 25 quarters. PlayStation made the arcade obsolete.

And that's what Peloton thinks it can do to gyms. Blockbuster got killed by Netflix streaming tech. Movie theaters, though, didn't. Right. So Peloton wants to end your gym membership. but SoulCycle wants to be your gym membership. Ride with us, or you're not one of us. This is Jack.

I own options of Peloton stock. For our third and final story, Dollar Trees' trade war issues right now are a preview for what we're going to see next month. Tariffs for everyone. Dollar Tree. Snackers, we've talked about Dollar Tree before. Oh, yeah. Very self-explanatory business model based on the company's name, Dollar Tree.

This company has 15,000 locations. We're talking more dollar trees out there. than there are McDonald's. They're like Dollar Forest. And its rival, which is called Dollar General and does basically the same exact thing as Dollar Tree, they also have 15,000 locations. There are 30,000 of these chain dollar stores in America. Jack and I'm just waiting until someone comes up with a chain called Dollar Dollar and like wallops both these guys. Now, Snackers, keep in mind here, U.S. businesses, they're paying for tariffs on Chinese goods. So like that 97 cent plush emoji-shaped pillow, they're paying a tariff because that's made in China.

China and sold in the U.S. So Dollar Tree announced last week that it has been hit hard by those dang tariffs, and the stock of Dollar Tree fell by 17% on the news. Now, let's take a look here. Actually, no, we're going to take an audio look. We're going to be talking through your ears on this one. We're going to walk through the income statement, which is like a window into a company's recent financial performance.

It's a beautiful thing. We are. And we're going to bring up some language you've probably heard in like common conversations, but they actually have an origin in the income statement. Things like bottom line and things like top line. We're going to talk about those right now. Can we go to the top here? Let's start with the top line.

Everyone's always talking top line, top line, top line. All right. Top line is literally the top line of the income statement. And it is where you list your revenues, basically what your sales were. How much money did you make selling whatever product it is? All right. Let's go south. What else we got in the middle?

In the middle, we got a whole bunch of costs. So at the top you got revenue, then a whole product. whole bunch of costs, and that gets us to the bottom line, which is the difference between the revenues and all the costs, aka the profit. That's the bottom line. Now, when we jump into the dollar forest and look through dollar trees income statement, what we find is that the top line growth, so like the revenues, grew 3.7% over the last quarter. And that's because incomes are high. Unemployment is at a record low in America, and low-income Americans are actually spending more than normal. But if we scroll our eyes down that income

statement to the middle where all the costs of the goods are, that's the key because the costs of goods sold by Dollar Tree rose 4.5% from last year. And that was driven by tariffs. Dollar stores are loaded with goods from China, like a six pack of duct take. That's coming from China, and now it has tariffs you have to pay too. So Snackers, the result, the bottom line, the bottom line of the bottom lines is that profits drop 10% to just $255 million for Dollar Tree. So we see that tariffs, which aren't that big a deal, they only grew costs by 4.5%. That can have a huge impact on profit because these companies work with very thin margins. Tiny tariffs, big impact. So Jack, what's the takeaway for our buddies over a dollar tree? This is actually an announcement for the

Snackers. This could be the last month ever that you don't notice the tariffs that are happening in this trade war. Today, tariffs are on about half of all the things we import from China. We're talking like steel, pumps, pipes, the kind of things that businesses use, but you don't experience day to day. Right. So far, nothing you'd ever put on your Christmas list would ever be something that's being tariffed. Right. There's like one company in Lull, Massachusetts, called like Stans, Pipes, Steel Pumps, and Pumps and Pipes that's like totally getting messed up about this. Yeah, because they might be buying their pumps and pipes from China. But the next round of tariffs, which is on the rest of the things that we import from China, they begin on December

15th, and all of those tariffs are going to hit consumer goods, like stuff you're putting at the top of your wish list. We're talking electronics like iPhone, shoes like Nike, like the low-cost plastic thing is you're probably giving to that secret Santa because you were forced into it in an office thing. So we've heard about a phase one trade deal with China. It was announced over a month ago by President Trump, but we haven't heard a single detail yet.

December 15th is T-Day, tariff day, and that's when we'll know. Jack, can you whip up the takeaways for us? But can you also take all fluids under six ounces, put them aside, take off your belt, your shoes, and all electronics. Nick, you're such a new, but it's 3.5 ounces, and I've checked my luggage, so I'm totally, like, on my own for these 12 hours in the airport. Just proceed, and don't ask any questions. Don't talk to anyone. What do we got yet? All right. Let's get to the takeaways. Black Friday experience a drop in in-store holiday shopping for the first time we can remember. Snackers, it's moved online. It's especially happening on smartphones. Omni channels a few days. and we got a new name for this thing.

All right. Second story, Pelton is trying to replace Spin Studios, borderline replace gyms, and SoulCycle is one of its targets. SoulCycle is getting a new CEO. They probably could just ask someone from one of their classes. That may be the best move for SoulCycle.

Third and final story, Dollar Tree Stock got hammered last week on news that tariffs are hurting its bottom line. Bottom line here, the bottom line is profits. And starting on December 15th, yours could be notably hurting when it comes to these tariffs.

Now, Snackers, Time for a snack back to the day. This one's submitted by us right now because we're in a situation with an airport. Yeah, it really is. This one is about the Hartsfield Jackson Airport, aka where Delta always makes you connect to get wherever you want to go. Can I just go directly? No, you've got to go through Atlanta on this thing.

Turns out 300,000 passengers a day fly through this airport. Jack is one of the lucky few right now. That makes this the busiest airport in the world. world. A hundred and seven million human beings pass through this airport for air travel every year. That's a lot of human beings. It's insane. Snackers, we loved being back to you. No joke. Jack and I chat it all the time of Thanksgiving. We could not wait to get back on this pod and hang out with you guys. Also, we saw a lot of you checked out our Robin Hood Snacks YouTube page. Thank you for that. Because if you want to see how we normally do pods, you can see it there, unlike today when

Nick's in his bedroom and I'm in the airport. Snackers, the trip to fan is gone. Jack and I are ready. We cannot wait to be back with you tomorrow. 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, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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, is not intended to serve as the basis of any investment decision.

Robin Hood Financial LLC, member FINRA, SIPC.