The Best One Yet - “The Godzilla of $$$” — La-Z-Boy’s upholstery. The RealReal’s surprise. Why tech stocks dropped.

Episode Date: February 24, 2021

We noticed 2 numbers in La-Z-Boy’s earnings that may signal the end of House Hype. The RealReal’s online fancy consignment may actually prefer selling clothes offline. And both our stock portfolios dropped, so we’re breaking down “The Big Shift” that caused it.$LZB $REAL $HDGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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 Wednesday, February 24th. It is go time, T-B-O-Y time. Jack, I got to ask you one question before we start. Is it harder to put together a bassinet or to spell bassinet? Nick, we are one month in.

Last night, I was ordering up on Amazon electric candles for the birthing room. Come on! It's a trick question. It's equally as hard to spell and to build. Jack, first story, what are we got? Lazy Boy is the best name and furniture since 1927. It stocks doubled since March, but it could be the end of house hype. For our second story, luxury secondhand, not an oxymoron, thanks to the real real.

The stock dropped 13% yesterday, despite some gorgeous showrooms. We've got more on that. Our third and final story hits close to home. Nix and my stock portfolio has fallen in the past week. Maybe your stocks have fallen to. Full disclosure. We're looking at the three reasons why NASDAX tech stocks are down almost 5%. in just over a week. But Snackers, it's COVID. The pandemic's still happening. You may have nothing going

up. Yeah, before we hit those three stories, socially, you're doing nothing. You may have watched a show about nothing. I'm watching Lost. Yeah, which is about something. It's something, but it's nothing. Well, Jack and I, we notice something, and that something is nothing incorporated. That's right. A startup has launched that is called Nothing. Yeah, nothing. Nothing the startup. Nothing the startup is based in London. It's raised $15 million. And Google, actually, Jack, Google is an investor in these guys. Impressive, but nothing is making an interesting move. Yeah, Jack and I noticed that nothing is letting future customers invest in their current fundraising round.

Invest to get a piece of nothing. Jack, how do you kill that, which has no life? Now, the product at Nothing, Co, we want to reinvent technology from scratch. That's pretty much all they've said. Ifso facto, there is no thing at nothing. But early leaks from some bloggers say they may be working on earpods. So if nothing is working on earpods, then that nothing is actually something. Technically nothing could become anything.

And eventually nothing could become everything. But without a thing right now, it's just nothing. The only company you literally can't tell to do less jacks. Let's in 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 raw. The robberhood family. It's all informational just so. You know, we're not recommending any securities. Nope. 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 FINRA slash SIPC. For our first story, Lazy Boy, just shared two numbers that highlight kind of a problem right now. Snackers, could house hype be over already? Jack, lazy boy. The pride of Southeast Michigan, baby. I spent four semesters in Southeast Michigan, so I'm an extra bit here.

Yeah, he does. Launched in 1927, Lazy Boy by two cousins, the first recliner was made of wood. Oh, that, I feel like that doesn't work. I'm not sure if that works. It reclines, and it splinters. Lazy boy, though. It is a classic, go deep on one thing and then expand to a whole bunch of other things company. That's right.

They pioneered the upholstered recliner that it's known for. Very nice. But they've also expanded to upholster the entire. hire house. And just last week, Lazy Boy announced earnings. Jack and I jumped in snack style. They also just announced a new CEO. Two numbers explain the whole story and possibly the house hype. Two critical numbers we found. First, in the quarter that just ended in January, sales rose 6%. That's the number. That's good. But the previous quarter, the one that ended in October, Lazy Boy enjoyed 34% sales growth. So they went from 34% growth to 6% growth. Jack, sit down,

stand up and sit back down in that lazy boy recliner man. That's not good. It's deceleration. And it makes us ask the question, are furniture sales in this country slowing down? Yeah, are they? Could the house hype trend of 2020 that we saw? Could it be ending? Reminders, house hype. As people were spending twice as much time at home in the pandemic, they were spending twice as much money making that home nice. All right. So this lazy boy earnings brought up the interesting question. But funnily enough, we also got Home Depot's earnings just yesterday. Sales surged 25. percent in the holiday quarter, which is incredible for a company of Home Depot's size. And Jack, the stock ended up dropping 4% for Home Depot after that absurdly good earnings. The reason,

Home Depot refused to provide a sales forecast for 2021. Not a good sign. So let's break this down. Home Depot had a record quarter because your mom bought a new deck, a new grill, and a new fire put all at once in 2020. But neither lazy boy nor Home Depot seem as confident about 2021 as they were in No, no, they don't. So, Jack, what's the takeaway for our buddies over at Lazy Boy? As house hype slows, are we about to see a corporate treat yourself moment? Snackers, funny thing about companies that thrived in the corona economy. They have a bunch of cash they're not doing much with. Yeah, Lazy Boy stock. It's only up like 25% in the last year, not that much. But its cash hoard has doubled to $393 million selling all that furniture during the house hype craze. First of all, Jack,

I'm not an accountant, but I like that you use the word hoard that could be an accounting term. If it's over a hundred million cash, it's a hoard. Someone take a no to that. Now, if the house hype trend does slow down is like vaccines end up getting vaccinated, maybe Lazy Boy will finally start spending some of that cash. Lazy Boy could acquire a direct-to-consumer millennial furniture brand like Burrow. You've probably got an Instagram ad for. That would compliment Joy Bird its very own millennial cash brand. Or Lazyboy could invest long-term in recliners for cars. Why not? When your Robocard drives itself, you may as well get comfortable. Either way, we're expecting a bunch of the Corona economy winners to find a way to spend that cash. Corporate treat yourself. For our second story,

the Real Real Stock just dropped 13% yesterday. The online consignment store is going offline. Interesting. And it kind of makes perfect sense. Okay. Secondhand. Hand me down marketplace. All the names you could describe the Real Real Real is a luxury version of those things online. All right, Snackers, here's how this breakdown. You maybe know Poshmark. We covered Poshmark before. On Poshmark, you can buy a secondhand American Eagle T-shirt. On the Real Real, it's a little different. You're going to buy a second-hand silk leather jacket with rare bald eagle feathers as the lining. It's a different Eagle situation over at the Real Real Real. Now, the Real Real, by the way, it's a second-hand retailer, but you're not going to get like a yellow armpit situation in the

garment that you buy. No, you're not. You're going to see their clothes online where you can buy them, and they authenticate what's legit. So you know it's secondhand Gucci, not secondhand Fucci. And you know it doesn't have yellow armpits. No, it doesn't. But the stock for the Real Real, it has doubled in the past year to an all-time high. But it fell yesterday by 13% after the company announced that in the fourth quarter, sales fell by 10% and they had another quarterly loss.

Jack and I dove into the earnings, but there was one slide and one bullet point that stood out. Slide four, bullet three tells the whole shocking story. The Real Real is launching 10 innovative store concepts over the next three months. Okay, Jack and I were shocked when we saw this. We're in the middle of a pandemic, a retail apocalypse, and yet a digital brand, the Real Wheel, is going physical. This is your classic Retail's Not Dead, bad retail's dead situation, though, Nick. Great call, Jack.

Because the Real Real Real's new stores look real, real nice. Oh, yeah, they do. The new Real Real Store's, they look like a lounge whose wedding was profiled in Vogue. No, no, what that means, but you could definitely fill pictures. pictures of this place and a coffee table. There are a lot of coffee table books in these stores. There's some strategy, though, here Snackers, because the Real Real Real is buying the dip of high-end real estate. It is because rents right now, they are low on Madison Avenue and they are looking for tenants. The Real Real Real is jumping in. And according to the Real Real, it takes

just $250,000 to set up one of these Real stores. That's it. It becomes operational in just six weeks. That's it. And becomes profitable in a year, give or take. That's it. That's absurdly quick, Jack. It's like a Casper blow-up mattress quick. Yeah, it is. Mattress, mattress, mattress. So Jack, what's the takeaway for our buddies over at the Real Real? Wear the trend. Don't let the trend wear you. Snackers, number one theme of this pandemic. It's been e-commerce, everything, and it is easy to get ensconced in that e-commerce trend. From Amazon to Zillow, digital is hot, physical is not. But the Real Real No. its customers and 100% e-commerce apparently isn't the answer for them. In fact, the Real Real's new

physical stores that could be integral to its business. Get this wild number at the Real Real, a third of its new consigners who are like selling the clothes, they came through its physical retail stores. And the people buying the clothes in store end up spending three times as much as the ones buying online only. The Real Real started 100% online, but its best customers aren't. wear the trend. Don't let the trend wear you. For our third and final story, stocks almost declined for a sixth straight day on Tuesday. It's driven by tech stocks. It's caused by inflation concerns and no single stock could hide from it. Okay, Snacker, circle your calendars for this. Friday or Saturday, the House of Representatives plans to finally vote on Biden's $1.9 trillion economic pick me up.

Now, you'd think that's really good news for the stock market. What did you think? More cash, people's pockets, more people spending that cash, that cash becomes profits. It's a nice ipso facto. But Snackers, something else is happening as well. Yeah. Fears that inflation is coming. In the past year, Congress and the Fed have added trillions of literal dollar bills to the U.S. economy to try to help us out from the pandemic. So here's the growing concern.

All that fresh cash could dilute the value of all the existing U.S. dollar bills that we already have. Like pouring water or melting ice in an Arnold Palmer. You just don't do that. But this connects to the reason why stocks are down in the last few days, something that we call the big shift. We're about to whip up a sequence of financial forces that leads to a bunch of stocks falling, including our own in the past few days. Yeah, very much including our own.

If the value of cash is diluted, then so is the value of bond interest payments. Basically, the IOU payments that accompany or company, government makes for borrowing cash is becoming worth less in the case of inflation. So investors are looking at the situation and they're going to start demanding higher interest payments to compensate for all that inflation happening. And higher interest rates on bonds could steal away some of the attention that investors have on the stock market. Yeah, investors, stop looking at stocks, start looking at bonds and that is exactly what we're seeing play out in the last few days. First, the interest rate on U.S. government 10-year bonds has risen from zero.

0.7% in October to 1.4% now. So some investors are tempted to sell their stocks in order to buy bonds that now pay twice as much higher interest as they did before. Because of the big shift, we've seen Zoom stock fall 13%. We've seen Tesla drop 10%, Jack. And we've seen Moderna fall 14%. The stocks that we've seen gain the most in the last year, they fell the most in the last week. So Jack, what's the takeaway for our buddies over in the U.S. economy? Some risks, no, single stock can hide from. In the past week, it hasn't matter. Nearly all tech stocks, they've been losers. We've seen it happen. And most, save for more physical stocks, have been relative winners in the past week. But technically, they're down too because pretty much everything has been down.

It's because of huge events like the big shift we're just talking about. It causes all stocks to be treated pretty much the same. And by the way, inflation itself, it isn't really an issue yet. Investors just think it might become a new issue if we get more stimulus. But investors could be wrong. We actually haven't seen real inflation in this country for decades since Nick and I started covering the news. Inflation is the Godzilla of finance. We haven't seen it in a while, but everyone's still kind of scared of it. But if inflation does wreak havoc on us, all stocks would be treated pretty much the same. Jack, can you whip up the bassinets? I'm sorry, the takeaways for us over there. Lazy boy has upholstered a whole bunch of homes since house hype started.

After this pandemic, we may be seeing a lot of corporate treat yourself. The real one. we all started an online-owning company, but it's getting physical. It's wearing the trend, not the other way around. If inflation happens, interest rates could rise, and that wouldn't be good for stocks. And if that does happen, no single stock could hide from it. Now, time for our snack fact of the day. This one sent in by Jamie Lynn in lovely Fremont, California. Hi, Nick and Jack. Did you know the first home security system was invented by a black woman? In 1966, Marie Van Britten Brown was a nurse in Jamaica, Queens. Since she and her husband both worked out she wanted to feel safer at home.

She concepted and designed a closed circuit system with video monitoring, a two-way microphone, and a panic button. Her husband and electrician helped make her ideas reality, and in 1969, their patent was approved. Now these features seem common, but Brown was the first. The Brown's patent is still being referenced by other inventors today, as recently as 2013.

Thanks, and happy Black History Month. Always appreciate a couple of co-founders. Couples that invent together, stay together. Beautifully put. Snackers, if your friends are having trouble getting through halfway through the week, just ask them, H-Y-H-Y-Y-S-D. Have you had your snacks daily? Nick and I would love it, and we'll see you tomorrow.

Can't wait. If you know, you know. And before we go, shout out to Tim Whitney, a snacker from New York City who just returned from deployment. And double shout out for Emily McCarthy from Farmington, Michigan, who just missed Tim as she gets deployed. Jack, was that classified? Can we say all that?

We don't know. Mack and Jordan, congrats on the engagement down in Amory, Wisconsin. Congrats to James for moving into a new pad in San Francisco. James, I'll see at Project Juice. Tunday, congrats on getting the NBA at UChicago Booth. Jimmy Puppado just became a CPA in Cleveland, the Paris on the Lake. Nova Lowe, happy birthday in Las Vegas, Nevada. And Eric Jones in Samonak, Illinois, and Sophie Yasway in Mannheim, Pennsylvania.

And James Buford in West Orange, New Jersey. And Ross Harding in Omaha, Nebraska. And Arunima in Kerry, North Carolina. And happy birthday to Inho Lee from Queens. And to anybody else celebrating anything today, make it a T-boy. Make it a T-boy. Celebrate the wins. And if you want a shout-out, there is a form at the top of this pod in the episode description.

This is Jack. I own stock of Amazon. Nick on stock of Zillow. 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 in 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.