The Best One Yet - Victoria’s Secret needs a new CEO, Chobani launches Oat (milk), and TJ Maxx vs. Urban Outfitters

Episode Date: November 21, 2019

Victoria’s Secret still has its 83 year old CEO despite (another) rough quarter — So we whipped up a gameplan for them to get less out of touch with millennials. Greek yogurt legend Chobani just introduced its first non-dairy option: Oat milk. We’re wondering if plant-based milk is a trend or a fad. And TJ Maxx and Urban Outfitters both reported earnings, but discount prices is helping one and hurting the other.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. It is Thursday, November 21st. What a life we live in. You're driving to work. You can listen to Snacks On Demand. It happens to be the best snacks daily we've ever done.

This really is, folks. Perfect mix today. Jack, first story, what do we got? J. Max versus Urban Outfitters. Great matchup. Both are in retail. Both are in fashion. Both are doing discounts.

Only one is winning. We're going to break down Y and Who. Second story, Chobani is launching its first non-dairy product. The name, wait for it. Simply, oat. It's actually an oat milk. Yeah. They dropped the milk.

Spoiler alert on that one. Big question, though. Trends versus fads. Where is this going to fall? How do you determine it? Is oat milk a trend or a fad? I don't know. I'm wearing it right now.

You can bait in this stuff these days. Third and final story. Victoria's Secret. I'm telling you, millennials are like Arias Stark. We keep lists. Everywhere. And lists of companies are little concerned about it. Victoria's Secret is on our list.

We're breaking down its parent company. L Brands had a terrible earnings. And we're recommending shareholders oust the leader. Snackers, this week for hashtag T-boy Tuesday. We recalled the 99 pack of PAPS PBR, which is being sold. Asked you guys to share with us the biggest, craziest, most insane corporate giveaways you would like to see and that you had ever heard of. Snackers send in three actual giant deals. Can we talk about the 3,240 can pack of Budweiser, please?

A 3240 pack. This thing sold for $4,699 and $0.95. At Costco in Canada. Here's the thing. That's more than a dollar for a can of Bud. I'm pretty sure you can get a 30 pack for less than 30. It actually makes no sense. Jesse Bilo, thank you for sending this away.

Second one, this one is an infamous deal. The classic American Airlines Lifetime Pass in 1981. As many flights as you want for the rest of your life for $250,000. They only sold 66 these things, but they regretted all 66 miles. Yeah, that was a bad deal for American Airlines, and they're just waiting for those 66 people to die. Kyle Montaibio and Matt Kippel, they found that one, shared it with this great find. This third one makes no sense, but Goodyear, the Ohio-based tire company, sold the things. called Good Year. Good Year, Good Year. A 98 pack of tires during a successful year.

We couldn't fact check this. This sounds like an incredible liability. But 98 tires is a completely useless proposition. I have to build a second garage just to store those tires. Totally fine with just four tires right now. Anyway, Commander Sprite. We appreciate it. Now, Snackers, those were all the ones you discovered, but we got to say there were like 10 people who tweeted us one consistent request. Gwok for life. Free from Japan. Chipotle. Can you please make this happen? A lifetime guacamole. We're tired of hearing it's $2.00 extra.

You could call it. Holy guacamole. Boom, sold. Let's make it happen. Let's hit 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. It's snacks about the hearing food.

It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. 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, Victoria's Secret desperately needs a new face of the company. It really does. It needs, I know what you're thinking. Some investor activism. Good old-fashioned investor activism. The stock was down Wednesday on third quarter earnings.

Victoria's Secret sales down 8%. Its parent company also owns Bath and Body Works, who sells rose by 11%. Can you say that five times fast? No, I can't. I keep on thinking it's bedbath and beyond. So the overall loss for this company, L. Brands, the parent company of all these other ones we just mentioned, it grew by six times bigger than it was. The stock is down 85% in four years.

It's an angel that fell from heaven and has a serious injury right now. This stock fell from heaven into hell. Jazele heard all this, by the way, and she's pissed. Tom has got a lot on his plate right now. Now, there's one man inextricably linked to success. I can barely say that three times fast. Les H. Wexner. This guy sounds like a Spider-Man character.

Les H. Wexner is the son of Russian immigrants. He's kind of the American dream. He's living it. He's an entrepreneur. He's fascinating. He founded L Brands in 1963 in Columbus, Ohio. But he is also an 83-year-old man who is running a sexy panties company that has a core product that is pink in all capital letters. Yeah.

He is the CEO who's deciding what push-up bra comes next, and he's 83-year-old man. He's also on his LinkedIn got chairman up on his title, which means he's leading the president. the hiring and firing of himself. Yeah, he's the CEO and he's his own boss as chairman of the board. It almost would make sense because Victoria's Secret right now is a company that has a history of objectifying women and isn't really living in the moment. It does. You can't sex something up more than Victoria's Secret brand. They're push and push up bras in an era where the brawlit is king or queen, I guess. This is the era of, let's be honest, me too, and female empowerment, and Victoria's Secret has totally fallen out of fashion and the stock shows.

The most innovative thing they've done in the last like five years was stop doing its big fashion show. But that's not enough as evidenced by the $250 million loss last quarter. So, Jack, what's the takeaway for our buddies over at Lbrands? We've got a takeaway for Elbran's shareholders. Yeah, you're overdue for a change at the top of the company. And guess what shareholders of Lbrands? We've seen this happen before. When you change the face of the company, you can change the company.

Exhibit A, Papa Johns. Yes. The face of the company was also the CEO and founder of the company and the name of the company. Did he call by Papa John's? He called himself that. Papa John Schnatter. Maybe just John. He got ousted for making a racial slur.

Eventually, he's been replaced by Shaquille O'Neal as the face of the company, and things are doing better. Exhibit B, Weight Watchers, didn't really have a face of a company, was kind of struggling. They brought in Oprah. Boom, turnaround. Oprah, it's been an epic turnaround, and the stock has been way up. Nick, Elbrin's face is Les Wexner. Can you say that five times fast? No one can say any of these names.

No, but Les Wexner. Wait for it. Jack, you're struggling with that name. Was an extremely close friend to Jeffrey Epstein, aka the notorious sex offender. Yeah. So, like, as if things weren't bad enough, he's also tight with Jeffrey Epstein. So shareholders, they get to do what's best for the company by voting, and they could potentially vote less out. And replace him with a fresh personality who represents the values that millennials care about.

For our second story, Jack, could you put down the floral print crop top over there? We're talking T.J. Max and Urban Outfitters, they're both using the same strategy. As a proud Maxinista, former Maxinista, recovering Maxinista, I can say that that same strategy is discounting. That strategy is discounting, and it's causing the brands to go in two different directions. The first company is actually called T.J. X. It sounds extreme. It almost sounds like a skateboard. Sounds like a new workout. It's actually the company that owns T.J. Max, Home goods, and Marshalls, and it's based Framingham, Massachusetts.

This is the pride of Framingham. Except for one other company. Well, it's Dunkin' Donuts country for sure. That is absolutely. You got Duncan spilled all over this thing. So if anyone's like me, you've bought a Ralph Lauren polo at T.J. Max for like $12. Instead of going to Ralph Lauren where this thing's like $90, $80 of which goes to like stitching that polo horse that's six inches tall. That's because T.J. Max specializes in off-price retail. Here's what it does.

T.J. Max buys brand name items at big discounts from other suppliers who are stuck with like way too much merchandise, a car truckloads of polo shirts. And then it sells it for a low price, which is awesome for customers. It's also ironic because great use of irony here. As stores are going out of business, which is happening a lot right now. It's a sad thing. The irony isn't, though. T.J. is going into more business because it scoops up that apparel for cheap and fills up their stores.

Snackers, we know what you're thinking here. What is the result for T.J. Max? It's been good. They've had 21 straight quarters of increased foot traffic at their store. Jack, they have had 4% more sales growth from last year. And they just boosted their forecast for holidays. Okay. Things are good at TJX. That's what's going on at TJX. Now, let's count priced clothes.

Premium price style. Let's pop over to the Skullkill River and talk about Philadelphia-based urban outfitters. Home of Ben Frank. Beautiful thing, Gino's Sandwiches. Right. Right. It owns Anthropos.

It owns Anthropology. And it owns free people. I can say from personal experience that Anthro has the best home goods for boho-sheek post-preprep millennials like myself. If they don't have wood and they don't have metal on this cupboard, I'm not buying this thing. Dude, the amount of like indoor plants at this place, like, you feel like we're in a jungle. The succulents. have their own succulent. I'm expecting Robin Williams from Jumonti to jump out of the plant.

Attacked by a fig tree over there. All right. So Urban Outfitters last quarter had to do a lot of discounting because it has too much inventory. It's got too many clothes on its hands. Yeah, it had so many clothes filling its shelves like in the back. You know, they're like, do you have this in medium? Oh, let me check in the back. They have everything in the back. Extra medium. So they had to offer a lot of like 40% off discounts just to get the stuff off the shelves. Now, a lot of people were shopping there, so Urban Outfitters had record sales, but profits fell. So to summarize, Both T.J. Max and Urban Outfitters offered big discounts in the last quarter, but T.J. Stock only dipped a tad by 2%. Urban's got crushed. It fell 15% yesterday.

So, Jack, what's the takeaway for our buddies over Urban and T.J. Max? One is discounting voluntarily. The other is forced to discount. Snackers, we're in a strange paradox right now with the economy. We've got a strong economy. Record low unemployment. But consumers are expecting deals wherever they go. Get this survey. average spending by consumers over the holidays is expected to be higher than last year, but a greater percentage of consumers

are expecting that to be sales that they're getting these prices on. I'll tell you, we're kind of spoiled. Like, we expect 50% off, buy one, get one free, deal or no deal. Is it too hard to pay a pull price these days? So, T.J. Max business model is built to thrive on discounted clothes.

But Urban's more expensive clothes depend on a higher price. And they can't sell stuff for higher price right now. For our third and final story, This is a wild one. Chobani just launched its first non-dairy product. Oat Milk. Yeah, this story has a lot of emotions for me.

Jack grew up in a state with a lot of cows. It was actually hard to discuss this story with them. I'm just an overall oat milk skeptic. I don't get why we need oat milk. Almond milk was fine. I know. You can milk anything these days. That's what we're learning.

That's kind of the early takeaway here. I've got alt milk. Greg, can you milk me? Chobani has been the emperor of Yogurtland over the last decade. For 14 years under a wonderful honor. entrepreneur named Hamdi from Turkey, fascinating guy. He's gone from like sleeping on the factory Florida, basically being a billionaire. And Chobani, you'd probably recognize the branding. It's at like Trader Joe's. It's all over the place. Now, if you're wondering how Chobani's doing when you like

stare at those Trader Joe's, here's how it's doing. Joe Bonny owns 19% of yogurt sales in America. And when it comes to Greek yogurt, that's its specialty. Forty-three percent of all Greek yogurt sales are Chabani yogurt. It is the biggest player in yogurt. Now, when it's come to innovation, the The company's like really kind of almost been like that guy at lunch who's like only doing yogurt. It's kind of like a little too much yogurt. It's experimenting in the dining hall. It added some crunchy mixers like granola.

To yogurt. It's added less sugar, which apparently was adding sugar in the first place, which is annoying. To yogurt. It's made a kid's version of yogurt. And a drinkable version of yogurt. Which is also known as milk. They're really into yogurt. Now, there was a bold move that the company just made.

This is actually big. It launched a whole line of new products. It's doing oat milk. oat yogurt and a Greek yogurt with oatmeal. And like maple syrup. That sounds like a great snack pack for the morning go. But here's what Jack and I found to be the even bolder move by Chabani. It cut the names milk and yogurt from the product.

So when it comes to launching these products, Chibani just unveiled oat. It's just called oat. It's like Cher going by share, but having not produced any music, it's like she showed up at 15 and said, hey, I'm Share. Deal with it. Snackers, this is bizarre. You open up a product which is called Chobani Oat. you're expecting there to be a bunch of oats in there and then you spill oat milk all over yourself.

It's a horrible but fascinating situation. It's a liquid product. If you're wondering what this looks like, it's very consistent branding. It's like they brought back Dr. Seuss and he redesigned the whole thing. Yeah, and the oat yogurt product, it looks like a little yogurt container,

but again, the word yogurt is nowhere to be seen. It's adorable, though. We kind of want to be friends with it. We kind of think, though, that they're preempting farmers from suing them because there's a lot of lawsuits claiming, like, what is milk, what is not milk? What can you call milk?

The case with Chibonnie. So here's the problem that Chabani's facing. Its sales are actually growing. They were up 8% last year. But yogurt sales are slowing overall, and Chobani's sales growth has been slow. And Snackers, you know, Jack and I told you last week, Dean Foods, like the biggest milk producer in the country, just filed for bankruptcy. Yeah, because dairy sales are falling and plant-based milks are replacing it.

They are not only having a moment, fascinating thing here. They're having a moment with multiple generations. Baby boomers are actually trying out plant-based milk alternatives because of lactose intolerance and just when lactose makes your belly feel bad. My mom is basically like living in oat milk. She puts it on her face, I think, to start every day. Something like that. I'm not entirely sure, but she loves the stuff.

And then millennials, of course, are loving plant-based milk because we like trying things different and doing things different than our parents. Yeah, because that just sounds cool. So soy milk was the original alternative milk, but that slowed because people wanted something more trendy. No longer new anymore. Almond milk has lost love because almonds are total H-2-O hogs.

They require eight times as much water to grow as oats do. Kinoa milk has lost some, like, early appeal because it's just kind of intimidated. And then we have flax milk and hemp milk. When is this going to end? I have no idea. We couldn't tell if those were real or fake. Either way, they're kind of wild. Jack, what's the takeaway for our buddies over Chabani?

How do you know when something is a trend or when it's a fad? Oat milk sales are up a whopping 600% in the last year? That's insane. But the question is, is that a sustainable trend, or is that a flask? fashion-the-pan fad. Now, two industries, Jack and I have noticed, this tends to happen most often when it comes to fads. Fashion and food.

Yes, look at fashion. Ath leisure, Nick and I would argue, is a trend. But fast fashion, which started in like 2011, yeah, is over. Those companies are going bankrupt. Meanwhile, in food, non-processed food is a trend. We're seeing it more and more. You see it at restaurants, fast, casual, you name it. But juice cleanses, those were kind of a fad.

Total fad. So Chobani must be looking at this plant-based situation. and wondering, is this a sustainable trend that we should invest in, or is it a fad that is not worth our time? Now, Snackers, Jack and I can't give you the answer on this, but what we can give you is the framework. If you're thinking about making an investment, think to yourself, is this new thing a trend that I should get involved with, or is it a fad that I should avoid?

Now, Chibani is a private company, so you can't invest in it, but you can apply this framework to public companies. Jack, can you whip up the takeaways for us? Victoria's Secret desperately needs change after another loss-making quarter. And the change has to happen at the top. Let Les retire. He's 83. T.J. Max is winning and Urban is losing because of discounted clothes.

And I'm a discounting boy in a discounting world. It's a discounting thing. They should do a discounting song for all these companies. Shobani is getting on the plant-based milk and yogurt train with adorably branded new products. The only risk here, plant-based is a fad, just like choose cleanses. No one's doing those with our office anymore. They actually were kind of disgusting. That's the risk.

They kind of freaked us out. Snackers, time for our snack fact of the day. This one comes from a longtime snacker, a legend in the DC area, Mr. John Deary. J.D., who is a huge supporter of entrepreneurship in general. Now, he's pointed out something that you may have noticed last week. The Dow Jones Industrial Average ended on one day at the same point it ended the previous day. 27,691.485, seven more decimals. Points.

That was where the Dow ended and ended two days in a row. This same Dow within 10 decimal points. This means that the Dow in a single day of trading was completely unchanged. Pretty wild. I feel like the chances of that happening is like one in a billion. They're not only that small, but over the last 123 years in which the Dow has been stock trading, which is like over 33,000 trading days, this unchanged has only happened 167 times. Now, the unchanged is when just zero points move, not to 10 decimals.

The 10 decimals thing was just insane wild and kind of made it. Sit down and go. Wow. It gives us a break, though, because we put the Dow at the top of our Snacks Daily newsletter. It's exhausting. And we don't have to write anything. John, thanks for sending it in. Snackers.

Love to have you with us today. How about we do this tomorrow, Jack? See you that. Same sweater. 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.