The Best One Yet - 🏴‍☠️ “That’s huuuuge shrinkage” — Walmart’s $2.5B theft. Fanatics’ Yankees strategy. AutoZone’s grandma car.

Episode Date: December 8, 2022

We just calculated that Walmart lost $2.5B this year from shoplifting. The sports apparel brand Fanatics just hit a $31B valuation because it’s borrowing the business model of the New York Yankees. And AutoZone’s stock just hit an all-time high because America’s cars are acting like America’s grandmas.$AZO $WMTFollow 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. It's Thursday, the new Friday, December 8th, and today's pod is the best one yet. It's a T-boy. Yeah, it is. What happened to stocks yesterday? I don't know, what happened to Hot Pockets yesterday? I'm still feeling that burn, baby.

Never forget. Lego my Ago's. Jack, what's the first story for today's pot? Walmart just told us that the biggest threat to their business isn't a competitor. It's thieves. Shoplifting costs Walmart $2.5 billion. every year. For our second story, Fanatics. Fanatics just hit a $31 billion valuation, selling their sports jersey. And Jack and I think they're borrowing the business model of the New York Yankees.

And our third and final story, we're looking at AutoZone. The car parts and repair stock just hit an all-time high. Because America's cars look a lot like America's grandmas. Love you, Nana. She's the best. She is the best. Well, she did serve us the hot pocket, Jack. But yeties, before we hit that fantastic man. Wonderful mix, and by the way, stocks finished flat. Shakespeare once wrote, What's in a name? But did Shakespeare not also ask Jack, what's in a dog's name? Enter Rover.

The pet walking app just released their 10th annual dog name report. Okay, in their 10 years of track and pet names, one theme has interestingly stood out. It turns out we can predict your dog's name based on what you watch. Because it turns out your dog's name is probably correlated to your streaming. habits. That's right. According to Rover, one out of three puppies is named after a TV or movie character. Hey, Bob Eiger, the top 2022 dog names all followed big streaming deals. Stop drinking water from the toilet. This year, your great day and got named after a dragon. Thanks to House of Dragons, the name Targaryen is up 185%. If you got a Yorkie, you named it Yellowstone.

A number of pets named Teeter doubled from last year. The number of pets named Dudin, quadrupled from last year. And Nick, you know how Elvis got a biopic, biopic, whatever it's called? Oh, Jack, I know how Elvis got a biopic this year. Well, Elvis Pugsley was the standout name for Pugs. Oh, and one of the other top 25 dog names right now? What is it, Jack? Tom Cruise.

That's a really popular dog name right now. Thanks, Maverick. You got it, Goose. Which were also two of the talk dog names this year. But the number one name, like, overall for dogs in America this year? The number one name for dogs that doesn't happen to be. streaming right now. For boy dogs, it was Max. For good girls, it was

Luna. After those two, it was the entire cast of Stranger Things Season 4. Hell, Mike, Will, Hopper, Joyce, even Vecna, all of those streaming dogs names. So yeah, if you got a pet this year, we can guess its name. There's a one out of three chance. It's on Netflix right now. Just give us your username and password.

We'll tell you what your dog's name is. Best dog name? Password. That's our three stories. Blum. Two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. 50% 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. Start the show. For our first story, Walmart CEO just said that their most surprising new cost is theft. Or what our business school professors would say is that Walmart has huge shrinkage. Huge shrinkage. But Jack, the holiday season.

The holiday season is kicking off. And there's one thing I know you're throwing on the TV. How do you kick off the holidays? Home Alone. Home Alone. And remember that scene, Home Alone One, when McColley Colkin steals the toothbrush from the, like, little store in Chicago? Yeah, the woman behind the register says, Jimmy, shoplifter!

Jimmy, stop that boy! And then a strapping young man chases McCauley Calkin into the park. Well, Yeti's Walmart CEO just told CNVC that one of the biggest problems they're facing right now It isn't competition. It's theft. Walmart basically just told us they need that strapping young man from home home. Like Walmart's not so worried about Amazon. They're more worried about Allen stealing an Allen wrench.

Now, Walmart's CEO elaborated on this theft problem. And it's not like kids seeing if they can steal a pencil and get away with it. And it's not your uncle Leo forgetting he didn't pay for that coffee table book. I'm sorry. I'm confused. I'm confused. No, for Walmart, it is an organized ring of criminals. engaged in sophisticated thievery and then selling all the stolen goods on a black market.

They're taking those tube socks and they're ending up in the black markets of Brazil. The problem is so bad that Walmart says they may have to raise prices across the whole company to compensate for stolen goods. Which brings us to the fundamental issue here, the fundamental challenge of the entire retail industry, razors. Razers. And that challenge of razors is explained by razors. Raisers are explained by razors, which we'll explain in a second. And here we go, here we go. Retail stores, they operate on razor-thin margins, don't they, Jack?

Grocery is very competitive. You're competing against the grocery store down the block, so there's very little markup on every product in a grocery store. For example, what kind of profits is Walmart pulling in, Jack? Walmart only makes two cents of profit for each $1 of sales. That's it. On the other hand, what kind of profits is Apple bringing in, Jack? Walmart makes $2.2. Apple makes $0.25 of profit for each $1.00 of sales. Retail's got razor-thin profit margins. And that is why they lock up expensive items with a lock and key behind the counter.

We've all seen it at CVS, Walgreens, Walmart. If you want like mock three triple blade razors, you have to ask an employee for help. They're locked up. So what Jack and I are trying to say here is that the razors explain the razors. Razors explain razors. That's why Walmart CEO is warning about closing up stores, if necessary, in places where the crime is the highest. Because of criminal steel razors,

then there's no more razor-thin profit for Walmart to enjoy. If criminal steel razors, then it's just a loss. And then you've got to call Jimmy. So, Jack, what's the takeaway for our buddies over at Walmart? Shrinkage is growing.

Shrinkage is growing. Yet his finance has institutionalized the concept of theft. In fact, the official term that we learned for theft in business school was the word shrinkage. Shrinkage. is how companies account for workers or customers stealing their product.

Yeah, like Walmart, they didn't tell us exactly how big their shrinkage problem was, but Target just did. Target said that shrinkage also caused by organized crime at Target is up 50% from last year. Get this. Theft is going to cost Target $500 million in losses this year. And since Target is about one-fifth the size of Walmart in sales, we can assume that Walmart loses $2.5 billion dollars, this year due to thieves.

Stealing has gotten so big, it's officially a line item on financial statements now. It's called shrinkage, and that shrinkage is growing. A shrinkage is huge. I was in the pool. For our second story, Fanatics has cornered the market for pro sports jerseys, and they just hit a whopping $31 billion valuation. Looks like Fanatics is looking to sign another. other free agent. In fact, the Fanatics team kind of looks like the Yankees team. Minus the pinstrives.

Yetis, have you noticed that there are fewer champagne photos out there these days? There's less celebrating because venture capital funding has fallen by 50% this year compared to last. Yeah, especially for late stage, like larger startups, they've been hit the hardest by the drop in VC funding. But not Fanatics. They just pulled off a come from behind win, raising $750 million. and reaching a $31 billion valuation. And he can pass. Every other major startup in America is out with an injury, but Fanatics is cracking bats like the 98 Yankees.

Yeah, they are. And surprise, this $31 billion company, it's not like a fast-scaling tech software Web 3 company. This $31 billion company, the third largest startup in America, sells mesh jerseys. It's a traditional sports apparel business. They're selling like Jacksonville Jaguar jerseys, and that's driving seven billion of annual sales.

Jack, remember when we would like look in our buddy Timmy's closet and he had like a Dekembe Matumbo poster and like a worn out G-Men shirt? He has more New York Giants jerseys than I have T-shirts. Okay, his closet is Fanatics business. Everything in that closet was a revenue stream for Fanatics. Now, to give you context on the size of this company, it's worth $31 billion. That is less than Nike's market cap, but it's more than that. Adidas. To sprinkle on a little more context, this company Fanatics is worth 10 times more than Under Armour and they're doing $7 billion in annual sales. You know Nike, you know Adidas, you know

Under Armour, you should know Fanatics too. Now, here's what Jack and I found fascinating about this fundraise. Fanatics operates more like a sports team than it does business. Fanatics signs free agents. Like for example, just yesterday, the New York Yankees splurged to sign their big outfielder, Aaron judge. They better re-sign judge after he hits 62. Well, Jack and I are looking at the fanatics numbers, and Fanatics does the same thing. You remember Topps, the trading card company, like Mickey Mantle card, whatever? Topps, the trading card company was bought by Fanatics for $500 million. Let's turn over to Mitchell and Ness, that throwback, flat brim, snapback hat company. Well, Mitchell and Ness was acquired by Fanatics for $250 million. What about Steiner Sports? The company that

like snags and sells the actual football that like Tom Brady threw a touchdown pass. That memorabilia company was acquired by Fanatics for a whole lot of million dollars. Add that all up. And Nick and I are like, is this a company or a general manager? In fact, Jack, what was that funny thing you and I noticed in the Fanatics press release around the fundraise? The fundraise is for more mergers and acquisitions. The fundraise is to acquire more companies. All right, so Jack, let's just look at the playbook here. Fanatics, they identify holes in their corporate lineup, they scout out new talent, and then they buy rising stars? That is Yankees general manager, Brian Cashman. Yeah, in a company. So Jack, what's the takeaway

for our buddies over at Fanatics? Who should Fanatics buy now with all this fresh cash? Yeties, that's what we're wondering. It's a buyer's market out there for stocks and startups. Prices of companies, public and private. They are down. So what sports are? So what sports adjacent business should Fanatics acquire with the $750 million they just raised. They could acquire a sports streaming platform and get direct access to super fans when they're in the most attentive moment of the game. As you're watching the Cowboys, that's when you want to buy a Dak Prescott onesie. Or Fanatics could acquire a sports betting app and get immediate access to the gambling market.

You just won 50 bucks on a Seahawks game. Get a prompt to buy Seahawks underwear. Or Fanatics could buy a ticketing startup and finally. pose a challenge to the Ticketmaster monopoly. Some of the leading investors in Fanatics are the professional leagues, so they would love an alternative to Ticket Mask. Yetis, few startups operate like a sports team buying up talent, but this one does. Aaron Judge is off the market, but who should Fanatics buy next?

Now a word about our sponsor, Robin Hood. A lot of Yetis don't realize how much prep work goes into this pod. We spend hours every morning jumping in T-boy style to earnings reports, CEO. tweets, breaking news headlines. Yeah, Jack and I are toggling tabs like you toggled I-M Convo's in 2004. Having eight tabs open can be stressful. You don't need that, especially when invest. Robin Hood offers it all in one app.

Whether you want to trade options, ETFs, or stocks through Robin Hood Financial, or you want to buy some Bitcoin on Robin Hood Crypto. You can do it all on the Robin Hood app. If you're not investing in Robin Hood yet, to get started, go to robin hood.com slash T-Boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involved with us.

By the way, this podcast is not owned or part of Robin Hood. We are not employees of Robin Hood. For our third and final story, AutoZone stock just hit a record high because the life expectancy of your car is way up. Your grandma is still working? So is her station wagon. America. America is car country. Like Jack, if aliens came down to Earth and looked at us, they would think we worked for the car. Cars appear to run things in this country.

Yeah, they do. We work for the oil. You pay for the cars. There are 300 million registered cars on the road in the United States. That is over two cars per household in America. That's a lot of cars. We're talking about 300 million depreciating chassis. And for them, AutoZone is their self-care spot.

AutoZone $50 billion public company. It's 6,000 U.S. locations are the Sephora for your sob. And AutoZone just announced record three. third quarter revenues. Guess what? The stock just hit an all-time high too. We're talking about a $2,000 stock. Oh, and their revenue growth during the pandemic, it doubled and it just stayed up there.

One key reason AutoZone has already got in the zone. We were really curious. Like, why is AutoZone doing so well? Why is AutoZone beating the entire stock market right now? Well, we've seen life expectancy for Americans climb up and up. We have. It's the same thing with cars. 80 is the new 60, baby.

Retirement. Mitch retirement. Yeties, people are living and working longer, and so are their cars. Yeties, the average age of a car on the road right now is 13 years old. 13 years old for a car. That is 80 in car years. If you're driving down, I whatever. Wherever.

Point at a car right now, chances are it's a 2009 model. That's the average model of a car. Chances are that car is one of those crank windows you got to do with your hands. Now, 10 years ago, the average car was only 10 years. years old. Now it's 13 years old. So besties, your 80-year-old aunt needs a new hip and your 18-year-old Honda Accord is going to need a new spark plug over at AutoZone. Yeah, as things get older, they need maintenance. And that is good for AutoZone. But that's not the only driver for AutoZone's all-time high stock. You're going to tell us what it is, Nick? So Jack wants the takeaway for our

buddies over at AutoZone. To quote Crosby Stills and Nash, if you can't be with the one you love, honey, love the one you're with. We told you about that this week, Yetis, with the revenge renovation. We told you how the housing market is so bad, you're not buying a new home, you're renovating your existing home. It's the same thing with cars. The price of both new and used cars is really high right now. In fact, get this, the average price of a new car in America is up $10,000 in two years, according to Kelly Blue Book. That's a high price. So for many, many, many Americans, they can't get the car they want. It's too expensive.

They're stuck with the ride they already have. And that means giving the old car some TLC with a brand new spark plug on that chassis over at AutoZone. That's why, despite the market downturn, AutoZone stock is sitting up at a record high. Because if you can't be with the truck you love, honey, love the truck you're with. Love the truck you're with. Jack, can you whip up the takeaways for us for the new, Friday. Criminal stole an estimated $2.5 billion worth of goods

from Walmart this year. Walmart's got huge. Shrinkage. I was in the pool. For our second story, Fanatics valuation continues booming. It has $750 million in fresh funding. Fanatics is acted like the New York Yankees general manager.

Who should they buy next? I don't know. T-Boy Pod. We're curious. For our third and final story, AutoZone is shockingly living its best life right now. Because if you can't be with the truck you love, honey, love the truck you're with. Now time for the best fact yet. This one sent in by Andy Erda from Chicago doing logistics.

Push and black. Here we go. Hey, Nick and Jack and my fellow Yeties. This is Andy Erda out of Chicago. Yesterday I mentioned a slinky. Yes, it was an accidental discovery, which was patent in 1947 by Richard James. But the actual name of the slinky and much of the success is due to his wife, Betty. In 1960, Richard left the family in the business, leaving her to raise six kids alone in a struggling enterprise.

She mortgaged the house, went to New York City to a major trade show, and a slinky was a big hit and never looked back. She actually sold out in 2000 with a single stipulation that the factory remained in Hollinsdayburg, Pennsylvania. And I had the pleasure of meeting hers 30-some years ago at that factory. Have a great day. Wow. Jack, we got a good list of accidental inventions going on here. I think we should do a whole episode. Fire, Play-Doh, the Post-it note.

We got to add some more stuff to this. We got the slinky. You and I kind of invented, I feel like the takeaway, the slamming salmon sweater, the chassis, the double-digit latte. Either way, Betty James, great call on that slinky. Yeties, you look fantastic for the new Friday. And if you want to help grow the pod, there is one thing you can do when you see a buddy today. Ask them, H-Y-H-T-O-Y. Have you had the best one yet?

Nick and I, we'll see you tomorrow. Can't wait. If you know, you know. And before we go, congratulations to Yeti's Gary Adelkoff and Kathy Lee, who are celebrating their six-year anniversary after meeting on Bumble. Your move, Tinder. Your move. And Mark Cloutier just found a real tuna that wasn't a funa in aisle six of his grocery store. And congratulations to Sam Yosso, who made it to the 30 under 30 list for healthcare. Welcome to the list.

And Lev Adler, nine years old, is recovering. from Strep Throat today in New Jersey. You got this, Lev. You got this. And a happy 30th birthday to Emily Pizamenti over in Chicago doing pizza logistics. Happy 11th birthday to Tatum Conover in Livermore, California. And it's Stephanie Nico's birthday in this economy? And happy birthday to Matt Ponto, down in Tempe, Arizona.

And Zach Vitale, happy birthday in Ann Arbor, Michigan. And big congrats to Roman Maples, who listened to all 3,800. 77 minutes of T-boy this year. Happy eighth birthday, celebrating in Jacksonville, Florida. Roman, you'd a freaking man. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack.

I own stock of Amazon, Bumble, Disney, and Netflix, and Nick and I both own stock of Apple and Robin Hood. Now a word about our sponsor, Robin Hood. A lot of you listen to our show while you're driving. Two hands on the wheel. Keep it 10 and 2. You might be cruising. Chris, no rush, stay in the right lane.

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