The Best One Yet - “WOOF or MEOW?” — Petco’s IPO. Nestle’s 2050 food fantasy. November’s Jobs Report.

Episode Date: December 7, 2020

Hey Chewy, turns out Petco is going public and it’s got its own profit puppy. Nestle just whipped up a 2050 plan to make zero greenhouse emissions… without affecting a drop of their earnings. And the November Jobs Report reveals how moms are hurt the most.$WOOF $NSRGY $CHWYGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @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. Welcome back. It is Monday, December 7th. Let's get right into it. Please, Jack. By the way, this is a lot better than Friday's pie. This is the best one yet?

This is the T-boy. For our first story, a new pet company is entering the publicly traded dog litter. Jack, Petco's going public with its very own adorable profit puppy. For our second story, Nestle, is sick of its Kit Kat candy, spewing out greenhouse gases. So Jack and I checked out, they unwrapped an unprecedented plant to make its food carbon zero. Nothing. For our third and final story, November's Jobs Report for the United States. Jack, two early sneak peeks to the takeaways here? What do we got?

The economy needs help. Yep. And moms need help too right now. Moms need help. They're the best. Now, before we jump into that wonderful mix of stories this Monday morning, it is Monday, so you're probably on your way to a meeting right now. And since we all kind of hate meetings, we whipped up some math. You can mention to possibly end those meetings that you hate something. much. Nothing intimidates people like mass. So think about it this way, Snackers. Every meeting costs something, even if you got yourself a free Zoom account. And what it costs is your time and the time of all of your coworkers and colleagues who are in the meeting with you. Yeah, so whip out like a blackboard and go full on Russell Crow in. What am I thinking, Jack? Beautiful mind. Beautiful mind on this thing.

If you add up the salary of everyone on your Zoom meeting, multiply that by the one hour you were zooming, divide it by eight hours a day, divided by 200 work days per year. Yet that is how you get the dollar. cost of the meeting that you just finished or are about to enter. That's how much the meeting cost. Jack, can we put this into practice with some realistic numbers on our side? Sure can. We whipped up a little example here. Let's say you're in a Zoom meeting with like 20 people. Let's say it's the weekly sales meeting. It's Cammy's birthday. Someone brought cupcakes. Everybody in the conference room in five minutes. And let's say all 20 of those coworkers, they make about 75th hour year. Now we know you wish this was a half hour meeting, but because Cammy set up the meeting, it's an hour long meeting. So we crunched the numbers

using our little formula, that meeting was a $937 meeting. Darlene didn't even bring the good coffee this time. Darlene, was that meeting worth $1,000 to the company? Cammy, if that meeting is weekly, is a weekly meeting worth $52,000 a year? Think about it, Snackers. And maybe ask your manager if that meeting is worth $52,000 a year. Jack, I think we just got a whole bunch of snackers out of ever having another weekly meeting. You're welcome. Let's hit our three stories.

You're tuned in the snacks daily. We spoke to the lawyers and we got to get something. illegal out the way. Snacks about the hair ain't 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. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Petco just filed to IPO. They are seizing the office. opportunity of this dog-doption moment. Oh my God, they totally are. By the way, Snackers, before we talk about this, there is an awkward situation going on over at Petco because their logo

has a dog and a cat, like very awkwardly close to each other. Yeah, and Petco just decided what their stock ticker symbol was going to be. They went with Woof. Yeah. Great ticker symbol. I love the spirit of it. But what about the cats and what about Meow, which is sitting there available as a ticker symbol? We got a favorite child situation here, probably dog people apparently over at Petco. You can actually prove it. We command. F'd this S1 document, and we found cat was mentioned nine times. And dog was mentioned 14 times. And lizard was mentioned zero times. You got a lizard snackers. His name was scaggly waggling. It was scaly-whaley, but we can talk about that.

Later, Jack. So Jack and I spent the weekend jumping in snacks out to their IPO paperwork. The IPO paperwork of PECO, it tells all. Every company that wants to IPO has to put out an S-1 document. This is the real thing on this thing. And it turns out sales, we Pekko jumped 10% over the last year, pretty solid. It's not profitable, though. We should let you know that. That's still an improvement, though, because sales were falling in 2016, 17, and 18. And then in 2020, what happened?

Well, Adopt-a-Paloosa happened, and everyone's pets getting at that. Definitely a solution situation. Also, Petco sounded kind of cocky in this S-1. They did get this on, like, the first page. Jack and I noticed Petco described itself as the only complete health and wellness company for pets. Well, there's no emphasis in NICs only there because they bolded it and underlined the word only. Also, it was all caps. Sounds kind of insecure.

Yeah, it does. It does kind of sound insecure. Act like you've been there. But here's what Jack and I found fascinating about Petco's IPO. There was one really revealing detail. They mentioned the word e-commerce 79 times, but they mentioned store 115 times. That's right. And you can't talk about Petco without talking about our buddies over at Chewy.

Chewy is online only. it's the e-commerce, it's the Amazon for pet supplies. And Chewy stock has doubled over the last year because online pet care sales are searching for all these new parents out there. Now at Chewy.com, anchors customers with like monthly orders of dog food, but then you end up throwing a bunch of other things in the shopping cart. You got to feed the pooch every month, so you end up doing their subscription program. They're anchoring you with dog food.

Petco has a different strategy. They anchor customers with critical services to experience with your pet. Yeah, that's right. Not products to order for your pet. So Petco is. is embracing the exact opposite of Chewy. It's leveraging its strategic physical network instead of just doing online stuff.

It's like a luxury resort for parents and their puppies. There's a spa club at Petco for grooming pets and they've groomed 2 million pets across 1,400 Petco locations. Oh, Jack, it doesn't stop there. They also, right next to the spa clubs, have Petco training. They have taught 200,000 puppies to sit, stay, sit, okay, still stay.

That fourth part's the key. But then they don't want to stop there. They also have the spa club, the Petco training, and Vetco, because he got to play off the Petco name. They've bolted on 900 veterinary clinics into their stores, and they're opening up 70 new ones per year. They actually, like, canceled whatever was in aisle 6, put in a veterinary clinic,

and actually increased sales at each of those stores. One stop shopping for everything pets in person. In person with man's best friend. So, Jack, what's the takeaway for our buddies over at Petco? Retail's not dead. Bad retail is dead. Jack, we said it before. Can you say it again? Retail's not dead. Bad retail is dead. Yeah, e-commerce gets all the attention snackers, but sometimes you need to just physically go there in person. You can't get your Jeep in oil change from a Chrome browser or an iPad.

Yeah, Jack, I don't care how many product managers they throw at this thing over in Cooper Tena. Get these numbers, Snackers. If you did spa club over at Petco, you spent twice as much at Petco as the average customer. If you did Petco training for your new puppy, you spent three times as much as the average Petco customer. And if you also did a vet visit at Petco, you spent a whopping six times as much at Petco. Services at Petco's physical stores didn't just retain customers. No, no, no, no, no, no. They actually boosted the value of every single customer. Who's a good boy?

For our second story, Nestle wants to go carbon zero. A big deal because Nestle is food. They're actually the biggest food company in the world. And food is carbon. And carbon is food. So Snaggers, we know what you're thinking here. You may be like, all right, okay, okay. I've heard this story before.

Microsoft, it's already carbon neutral. I mean, like, no big deal. They're actually trying to go carbon negative. They're basically showing off and embarrassing all the other companies. It's pretty impressive. But here's the thing. It's all about the industry you're in

because Microsoft, it's a digital company. Tap and touch screens doesn't create much CO2. No, it doesn't. But the food industry, is the opposite of the software industry. You got to clear out of forest to make a field. You got to plant that field with seeds. You got to water the seeds.

So they grow. You got to harvest the corn. You got to fertilize it. You got to rear cattle make. Oh my God. Then you got to feed the cattle that corn so the cattle can keep on getting reared. And then you've got to get two Kit Katz

and attach to the sides of the Kit Katz to make one bar. Every time I say Kit Kat, I almost say TikTok. I know. I always says the same thing to me. Ticktack, tick tock. Snackers, this is all very carbon-intensive stuff. It's sending a lot of greenhouse gases up into the sky. So basically, Nestle is literally in the business

and moving carbon to other carbon, which emits an insane amount of carbon. And again, Nestle is the biggest food producer in the world. It's not just Nestle's like chocolate. There's a whole bunch of brands under that company. And get this, Nestle, the company, is responsible for double the greenhouse gases as its home country of Switzerland.

That's why we are so shocked by Nestle's 27-page plan to get carbon neutral by 2050. Because Nestle's not just like, you know, telling corporate HQ to bring your own mugs to work so they can eliminate paper products. My favorite is they're telling people to bring in sweaters. They can keep the heat down to save energy, you know. But they're also not doing like some 100% renewable energy thing where like they stick turbines in every single parking space. They are doing all of those things, but they're also going directly to the land where the food is grown. That's the key here. They're chatting with 500,000 farmers that produce all of their food.

These farmers that produce the crops, that are the ingredients for your Kit Kat, they're going to be taught and incentivized how to do regenerative agricultural practices by Nestle. Case example here, we've got improving manure management, critical thing to do. They're also going to feed animals different food so they produce less methane. Less stinky alternatives here. They're going to add plants and organic fertilizer to the soil that the cattle actually graze in so they would naturally capture and store the carbon better. Very agrarian stuff with 500,000 farmers that Nestle has to chat. All right. So the first thing Jack and I thought of when we heard about this was how a whole bunch of business school professors got paid a whole bunch of money to come up with smart sayings that they probably used at Nestle. One of our favorites is what gets measured gets managed. Yep. And if it doesn't have alliteration, then it's not a great business school saying. And this one that Jack mentioned, what gets measured, gets managed. That is key for Nestle.

That's why Nestle decided to also peg the compensation that executives, to achieving these environmental goals. Yeah, Mrs. Thompson, your sales goal is $20 million, but your tree goal is 20 million trees. As in our goal was to plant 20 million trees this year, Thompson. How did we do there? Your bonus depends on it. So, Jack, what's the takeaway for our buddies over at Nestle? Nestle is saying environment to everybody, but to Wall Street, it's saying profits.

Snaggers, here's the kicker. A CEO's pay is still determined by how high the stock price is. That's simple. That's why the CEO was quick to point out, this initiative, is earnings neutral. Yeah, so like that $3.6 billion in cost they're going to feel from it, that's going to be offset by higher prices on the Nestle stuff you buy. Nestle believes that a reputation for taking care of the planet, fighting climate change, it's going to resonate with customers. Yeah, Nestle's picturing you're an aisle 6. You're going to see some Oreos made by their rival

Mondalas and then be like, oh, wait a second, Mondalas doesn't invest in carbon neutral stuff as Nestle does. You put the Oreos back. You grab Nestle's hot pockets instead because, sure, it's going to destroy your body, but no need to destroy the Earth, too. Snackers and toll laws change or we like tax and find companies for polluting. CEOs are going to have to strike this like kumbaya balance situation. You can only be pro-environment if it doesn't hurt profits. So Jack and I applaud Nestle for finding a way to save the planet and keep shareholders happy a kumbaya situation. For our third and final story, it was just the first Friday of the month, which means one thing and one thing only. Jobs Report Friday. We learned that phase one of the jobs recovery,

is over. Yep, but phase two is slow, painful, and could take four years. Now, Snackers, when you heard people talking about this recent jobs report, the monthly jobs report, the main number you heard was that 245,000 new jobs were just added to the economy, which sounds like a really big number. The other big number you're going to hear is 6.7%. That is the new unemployment rate that we have in this country. That's slightly improved from the month before. But here's the thing. Jack and I jumped in Snack style, and that number is pretty deceptive. In fact, Jack and I think you got to rename the November jobs report, the Lean on Mom report. The big reason the unemployment rate has improved so much is because one and a half million

people have dropped out of the workforce in the last two months. Let's let that settle on. One and a half million people just disappeared from the workforce. They're not working anymore and they're also not looking for work. So technically they're not unemployed, but they don't have jobs either. And here's the key. Most of the people who just left the workforce, they were women probably stuck staying at home to take after kids who are zooming into class while they're also doing child care.

Most were women. Moms are being hit hardest by this jobs report and this stage in the economic recovery. All right, so that's what just happened in November. But we got to kind of sprinkle some context on this thing and look at all the jobs that were just lost in the last year. We lost 22 million jobs in March and April when shelter in place was ordered by so many states. And so far, we've recovered half of those 22 million jobs.

We've got like 11 million of those jobs back. We got the first half of the job. back basically in May and June, and those were the easy ones. Yeah, they were the ones like the temporary furloughs, the dentist office, the department stores, people who were put on pause and then brought back into the workforce. When shelter employees ended, they got rehired. It actually wasn't too painful at all. All right, so that's the 11 million who got rehired, but then we've got 11 million people who are still unemployed from March and April, and they've been permanently laid off. They used to work at companies like restaurants, bars, travel, or tourism, and those old employers,

they might be out of business now, which means all those people may need completely new jobs. So, Jack, what's the takeaway for our buddies over in the economy? This jobs report may be the straw that breaks Congress's back. Snackers, one of the key developments in 2020 was the CARES Act that hit in March. $3 trillion sprinkled across the economy to help us all survive COVID. Major financial support that made the summary like a little less bad for families that had just sadly lost their jobs. But that support ran out months ago, and the pandemic is worse than ever right now. Yeah, so Jack and I are looking at two key numbers here.

First, you got the human loss from the pandemic. On Wednesday, a terrifying 2,885 Americans died of COVID-19. And then, on top of that, you've got the economic loss. At the pace that we were gaining jobs in November, it'll be 2024 by the time we're back to pre-COVID full employment. So in order to move beyond that, there is a $908 billion compromise package. hoping to pass Congress before the Biden inauguration next month. It would help people, businesses, state, cities, hospitals, everyone would get a little bit of love to truly survive until the vaccine.

Jack, can you whip up the takeaways for us to start the week? Petco has filed to IPO, the physical version of Chewy.com. Petco's made its retail stores luxury resorts for the pa. Retail's not dead. Bad retail's dead. For a second story, Nestle's business is pretty inherently pretty carbon intensive. Yeah, because Nestle's saying an environment to everyone would profit. fits to shareholders. For our third and final story, the jobs report shows that 11 million people are

unemployed and another one and a half million don't have jobs but aren't looking either. But it could be the straw that finally breaks Congress is back. Now, time for a snack fact today. This one sent in by Jessica Lee from Charlotte, North Carolina, currently at Yale's business school. According to the book, The Nudge by Richard Toller, great book. Married couples who have lived together for 25 years, they begin to physically resemble each other. We repeat, you start looking like the person. you're dating or living where they're married to. And it's a result of prolonged cohabitation. Yeah, here's the funny detail.

You're going to start to pick up on this like around breakfast and stuff. Because you end up unconsciously imitating each other's expressions, you end up looking like the other person. Over time, it changes the appearance of your face. I'm thinking like a couple more seasons of snacks daily, I'm going to be like, this is Nick. Snackers, we can't wait to start the week with you. And right now, we're thinking about Pearl Harbor Remembrance Day.

December 7th, 1941, day that went down in infamy. And before we go, Snackers, big congrats to Ali Afsharka, a snacker who's leaving the Air Force for a new corporate job. Best of luck, Ali. And congrats to Today, Manukin, who just finished up AmeriCorps in Indiana. And Christina, she may have to disclose if she's a shareholder, adopted a new puppy over in Denver. Christina, are you part of the problem or part of the solution? Now, Roxanne and Juan Jose, congrats on the anniversary over in the Netherlands. Happy birthday to Phil Soe-Sway in Luxembourg.

And to Tony and Fade Phil Arkansas. and to Brandon Ortiz in Queens, New York, and to Nick Kumar in Westchester just a little further north, and to Mark Giovanna in Hillard, Ohio, and to David Kubius in Milwaukee, Wisconsin, and Toma Fisher in Summit, New Jersey, and Moe in D.C., and Camilla Rivera in Atlanta. And happy birthday, Kristen, down the street in San Francisco.

Congratulations to Brittany Topal Jones for graduating up in Wine Country, Healdsburg, California. Pop a peanut for us, Brittany. This is Nick, and I don't own shares of Chewy, and neither is Jack, my mom owns way too many shares of Chewy. 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 not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA SIPC.