The Best One Yet - “Work-leisurewear, by Lululemon” — Smile Direct Club’s cavity. Sleeper’s fantasy sports fix. Lululemon’s nirvana COVID moment

Episode Date: May 15, 2020

Data from Lululemon shows it’s uniquely found balance in the coronaconomy for extremely specific reasons. Smile Direct Club should be the Peloton of oral care, but it simply hasn’t been. And Sleeper is the “not-quite-Unicorn of the Day” after raising $20M from Andreessen Horowitz to finally fix fantasy sports.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 end of the week, it is Friday, May 15th. Snackers, raise your hand if you really need a haircut right now. Can't fit a hat on my head anymore. I'm using a pillowcase, Jack. It's a really big thing you got up there, Nick.

Perfect timing because this is T-B-O-Y, the best one yet. Our first story, step, jump, or float to the top of the map because we got data on Lulu Lemon sales during COVID-19. Snackers, it's thriving right now for more reasons than you even realize. Just ask your chakra. Lul-Lummon's unique. style of ath leisure wear that's nice enough for work is winning right now. Get this. We're calling it work leisure wear. For our second story, at home, contactless, mail-in braces so you can straighten

your teeth. Jack, hold my molars. Where do I sign up? Sounds like the perfect time for Smile Direct Club. Except it's not. SDC stock fell 7% yesterday and has never been lower after its latest earnings report. Should be the peloton of oral care right now. Looks more like the flywheel. Yeah, you don't want to be the flywheel of that home cycle. Your soul cycle's like, what are you guys even talking about? For a third and final story, guess what percentage of fantasy sports players are dudes? Based on living with our former roommate Timmy Jack, I'm going to go with 143%. Our buddy Timmy's in like nine leagues because he thinks that's diversifying his investment.

He has an own league just for himself. 81% of fantasy football players are dudes, but sleeper thinks that's because the fantasy apps you're using stink. Cough, cough, cough, Yahoo! Yahoo! Sports, cough, cough. So it just got $20 million from top venture capitalists to beat ESPN, to beat Yahoo, and to beat CBS fantasy. Will Bond, we know you're a snacker. We know you're listening. You know what we're talking about. Best team name, Teenage Mutant Ninja Bortles. Now, Snackers, before we jump into all that, we know there was some not good news yesterday. Three million people signed up for unemployment last week, bringing the eight-week total of people

who've been laid off to 36 million. Now, that's nationwide, but Jack and I have noticed that in the Bay Area, Silicon Valley hasn't been immune to job hits either. Uber recently laid off 3,500, Lyft laid off 1,000, Lyme has 13% of its workforce cut. Then Airbnb laid off one quarter of its workforce, but made the most impressive move we have seen in the Corona economy. It's called the Talent Directory at Airbnb. They got to come up with a better name, because this thing is way more powerful. It's magical. It's a public-facing website for the 1900-X-Airbnbers who just got laid off to find a new job as quickly as possible. But incredibly cleverly over at Airbnb, they frame this more like an alumni network,

not a layoff list. You should check this out. It's Airbnb.com slash talent, and it's 1,900 people who have, like, great, fantastic resumes. It's a lot like LinkedIn, except it's actually easy to use. It feels like you're scrolling, looking for a three-bedroom Lake Tahoe home.

Instead, it's a bunch of really skilled people who, like, used to be working at Airbnb. Jack and I are super impressed. We're going to tweet it out from at T-Boy Jack and at Nick of New York. Classy move by Airbnb. But wait, there's more. Yeah, get this Snackers.

Because the new better version of LinkedIn wasn't enough, they're thrown in like this extra layoff etiquette. Everybody who got laid off gets to keep their work Apple MacBook. It's like a reverse Oprah. You get a MacBook and you get a MacBook and you keep your MacBook. Everyone keeps the MacBooks. We hope this becomes new layoff etiquette. Let them keep their MacBook.

Let's hit our three stories. You're tuned in this next daily. We spoke to the lawyers and we got to get it. For some legal out the way. The 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. Right. Snacks is digestible. Business news for you. Robohood Financial, LLC, member FINRA slash SIPC. For our first story.

I think I know what you're trying to do. there, Nick. I'm doing the Ojai breath, Jack. I'm doing the Ojaiy breath. For our first start, we got Lulu Lemon, which just found Nirvana in the work from home era. And we have to announce the rise of work leisure wear. Snackers, we're not going to announce this without a big send-off party. So to give you some context, we're sprinkling a little stock info on you. Jack, Under Armour's stock since the start of this year. It's down 65%. Jack, Adidas is stock since the start of Dacia. This German company has Alfaceca planted 35% since the peak. And Jack, Nike stock performance so far this year. Slipped and fell by 16%. Down 16%. And Jack, how is Lulu Lemon stock? It's flat, which is actually

really good compared to its competitors. It's not about being first snackers. It's about being ahead of everyone else you're running against. Wild story at Lulu Lemon we picked up this week. April sales online for Lululemon.com surged by over 50% from what was selling in January. That's according to one company. Over at the New York Times, they're reporting sales have tripled online for Lulu Lemon as we enter May. Sales are jumping higher and higher for Lulu Lemon. But think about like high-end fashion companies trying to sell online. Thinking about it right now, Jack. They're kind of in a recession during COVID-19 because people don't care what they're wearing as much because they're not going outside. Snaggers, you know how many times we get on the podcast and I got to tell Jack, dude, put the Prada back in the closet. I'm not dropping $300 for pants. Nobody can see.

see except my wife and puppy. It's a podcast. We don't have to see the Gucci Bell. So nobody's buying Gucci Bell during COVID-19, but everyone realized in March after being home for two weeks, they needed more leggings, more sweatpants, and a comfy sweatshirt that's sharp enough for Zoom. So here's what fascinated us, Snackers. There are other very specific elements of Lulu Lemon's fundamental business model that fit like a glove with the corona economy. Okay, first of all, it has 400 physical stores, most of which are closed. That's bad. But they're using those stores. for distribution and shipping for online sales. And get this, 33% of Llemon sales were already being done online before COVID-19 was even a thing.

So it knows what it's doing when it comes to e-commerce. It's been honing this practice, practice for years. Breathe in for 10 seconds. Hold for 10 seconds. Breathe out for 10 seconds. Finally, if you've ever been in a Lulu Lemon, you know that its inventory isn't seasonal. No, it's not. The spring high-rise 23-inch crop leggings.

know them well. They're the same as the winter high-rise 23-inch crop. Yeah, six months from now, you're going to see the same crop, the same 23 inches, and the same high-rise on the waist. So the clothing that Lulu Lemon isn't selling in stores right now, it's fine. They can sell it later, unlike the spring line at the gap, which is pretty much spoiling because spring is pretty much over. It's like the 12 pounds of raggoose sauce he got stuck up in your pantry right now.

So, Jack, what's the takeaway for our buddies over at Lulu? Lulu made a bold bet. The aatleisure wear would become the new work. and it was right. Snackers, Adidas bet on style, Nike bed on performance, and Under Armour bed on bulging performance. I will protect his house. Jack, is there someone at your door over there? I will take them down. Protect your house. Protect your house. Lula Lemon took a risk. They turned their brand into a hybrid of athletics, leisure, nice. And professional. Just go on their website right now, Snackers. Look at the men's section. You're

going to see corporate ready butt and downs. I own like four corporate ready buddy downs at Lou Lemon. They're stretchy. They're sharp. Meanwhile, guess what's getting designated like a must-have in sage color? Tell me. Tell me more. We're talking about the wanderer pant, which is basically like glorified pajamas, according to the editors over at like Lifestyle Yahoo Canada. Its practice is strong. Fashion East is north of the border.

Investors think you want work, leisure clothing right now when you're working at home from your couch and in the future when you're working at work again. But one big concern for Lulu Lemon, we're kind of entering an unprecedented recession. $128 men's pants? Not exactly a recession. Special. Snackers, we've heard some complaints that are halfway turnaround time for the Snacks challenge is a little late. We rounded up to two-thirds. So we're almost halfway through. You should turn around in about a minute. For our second story, Smile Direct Club should be like

the Peloton of oral hygiene right now. But shares are actually down 62% from the IPO for Smile Direct Club in September. Yeah, they fell 7% yesterday, which is why we jumped in snack style, noticed page three of their earnings report is amazing. If you think your teeth could be better, your goal should be to get in the earnings report for Smile Direct Club, a whole bunch of before and after photos. Third page is just a before and after like Da Vinci Code. It's the Da Vinci Code. Snacker, Smile Direct Club's teledentistry business should be basically living its best life right now.

Isn't it kind of a telebraces business? It's more like telefaces. I mean, think about replacing physical experiences with at-home digital solutions is kind of like the stock winners of COVID-19. It's so cool everyone's doing it. No joke, your mom is actually trying things she never would have done before. Zoom is your new conference room. Yeah, work from home pretty much depends on it. Netflix is your new concert and movie theater. A.K.A. it's your new best friend. Nothing wrong with that, no judgments. Peloton is your new gym. Pro tip snackers, add a bunch of votives around the bike. You get a whole different mood ride. Nick, you're still

trying to make votives work, huh? Not going to apologize for feelings, Jack. Smile to Rock Club is hard to say, so I'm just going to call SDC. SDC. SDC, MECC, tells you of clear braces so that you can straighten your teeth at home in as little as six months. Sounds perfect for the corona economy. Jack, where do I sign up? You can't schlep to the orthodontics right now and you don't want an orthodontics hands in your face. Oh, how are you about what's going on? How's everything been lately?

You're also not seeing people. So this is the perfect time to stay home and get your teeth straight. Yeah, everyone knows that person who leaves the kind of disgusting looking mucus aligners just around the house. You can do that. You could just leave it on the bedside table. Don't worry about those. No one's paying attention. Finally, handshakes could become extinct if we continue to be germaphobe. True.

So your smile is never a more important first impression than ever. It's also the only billboard for you right now on those Zoom calls, by the way. But then Smile Direct Club CEO took the mic after his earnings report and said that the last quarter was very challenging. Quote, unquote, challenging. It shouldn't have been challenging. Get this. Sales growth plummeted from 50% growth last quarter. to just 11% growth this quarter. Yeah, Jack and I aren't historians.

We're pretty sure that's got to be the worst ever growth rate for Smile Direct Club. Sorry, SDC. It's a young company. SDC should be growing much faster than 11% year over year. And Snackers, we know they've got SDC like physical locations. They call them smile shops and almost every single one of them, except for the ones in Hong Kong are closed. And that's tough.

But we actually identified a bigger, more specific, more existential problem for SDC. Jack, sounds like a nice transition to what is the takeaway for our buddies over? at Smile Direct Club. SDC, ironically, has a word of mouth problem. Snackers, this isn't a club. It's a group of isolated individuals. And Jack and I noticed a secret lying in Smile Direct Club's marketing numbers. Let's call it Smile Direct Group of Individuals, actually.

Peloton is cutting back on advertising right now because it has so many orders, it can't fulfill them. Meanwhile, SDC slashed its marketing by 90%. And with that cut in advertising by Smile Direct Club, sales have plummeted by 40%. So Pelotan stopped advertising, sales are going up. Smile Direct Club cut advertising, sales are going down. Clearly, Peltonistas are bragging to their friends about the 14-mile butt-kicker ride that they just pulled off. But Smile Direct Club users aren't telling their friends.

They're not telling anybody. Basically, Smile Direct Club's perfecting your smile, then you're not telling anyone. Basically, people aren't posting their before and after picks on Instagram. They're just doing the after-picks. It's way too dependent on marketing. For our third and final story, even though Fantasy Sports are basically on iTunes, right now. One company is trying to disrupt the industry. Name is Sleeper. Interesting timing. Nick, sleeper is a fantasy football app. I jumped in snack style to the annals of Jack Kramer's fantasy football history.

Yes. My best sleeper picks, Devante Freeman and Tyreek Hill. We're talking 2015 and 2018. By the way, best punishment if you lose fantasy football, you have to take the SATs again. That would be so devastating if I had to sit down for four hours with those proctor stalking me. Is it out of like 3,400 these days? Now, 19% of Americans over the age of 18 play fantasy sports. That's about 50 million people. That's a nice size population. That's a good country. Basically, that's a country right there.

It's like California. And 90% of those fantasy football players are completely obsessed with fantasy football. Pro tip snackers, never accept a trade with a buddy who doesn't like their job. Yeah, because they're probably spending like five hours a day at work researching a trade that is, you're not going to get the better end of that trade. Marshaun Freeman's left toe was kind of injured the other day. We're going to have to pay attention to the blister situation. He's all over this thing.

We're looking at you, Deloche. We're looking at you. By the way, 81% of fantasy football players are male, and the average player spends seven hours a week at work working on their fantasy football roster. Their side hustle and their day job, meanwhile, they're on like the dark web getting statistics for the rest of their fantasy life.

These numbers are crazy. 50 million Americans are playing fantasy sports, and they're spending at least seven hours a week doing fantasy sports. You don't have to do all the matches. to add that up and know there is money to be made off of these people. That's why Andresen Horowitz just led an investment round of $20 million so Sleeper can keep disrupting fantasy sports. Oh, and by the way, power forward venture capitalist Kevin Durant also invested in the app. NBA champion, MVP, not too shabby. What they're focused on is Sleeper's goal,

which is make it easy for casual fans to actually know what they're doing and enjoy and play fantasy sports. So a fantasy sports app should provide everything you need to play fantasy Sports in that one app, right? It's like a toolkit. There's going to be a lot of functional parts here, but you'll want it all nicely organized in one place. For instance, drafting, picking your rosters every week, and checking scores. We're talking core functions of the fantasy sports app. You need that as the basis of the fantasy sports app.

You also want to be able to chat, trash talk, brag, and support your buddy who really needed that win because they were 0 and 9 looking at you, Steve. And then you got to have the news and the powerless. Because you need to make sure you beat Steve the week after congratulating him for finally getting away in. The problem with fantasy today, though, is no single app is doing all three of those things in one toolkit. We've all played fantasy sports.

Your choices are Yahoo! Fantasy Sports, ESPN, or CBS Fantasy Sports. We're talking incumbents as old as the World Wide Web. You get Yahoo! CBS and ESPN JEC! Everybody deletes these apps right when the season's over, because they're not good apps. Your iPhone's like, are you sure

you want to delete this app? And you're like, yeah, it's not me. It's them. We're doing this. The status quo is you need those fantasy apps. who's CBS or your SPSPN, but you also need your group text chain because the chat feature stinks and 11 tabs on some browser so you can do research on the side. So sleepers focused its entire value proposition on making all that we just described in one app to a quality level that you don't leave the app. Former NBA star Baron Davis is also an investor in Sleeper, and he said that he got his like 70-year-old mom playing and like she gets it. It's that easy. Mrs. Davis, we know you're

listening and we love that you're beating Baron. So Jack, what's the takeaway for our buddies over at Sleeper. Great name. Sports can be its own social media app. Snackers, one flaw here we notice. Key issue with the business model? Not clear what it actually is yet. Sleeper is pre-revenue. They have never made a dollar. We rip on Uber for being like pre-adjusted profit. These guys don't even have money coming in the door. Sleeper is basically the public library. It offers a great product, asks for nothing in return. You just stay there and have fun. So Sleeper just got 20 million. You're asking yourself how, if you're a it's pre-revenue, we think it's because

its focus is on social. Sleeper thinks people want to share about their fandom and the games they watch all in one place in the app, again, it all comes down to staying in the app. And by making fantasy less exhausting to play by putting it all in one app, they already have a million users, and 30%

of them are women a lot more than the rest of the industry. Jack, can you put down the Armani microphone and whip up the takeaways for us before the weekend? Lulu Lemon made at Leisureware work appropriate, and it's paying off. The stock is close to a record high, despite its 400 stores basically being closed. When Smile Direct Club stops advertising, people stop buying, and that's a big problem.

When Peloton stops advertising, your buddies brag about their Peloton to you instead. For our third and final story, Sleeper just raised $20 million to disrupt Yahoo! Fantasy and to disrupt ESPN fantasy. Casual fans can watch sports. They should be able to play fantasy sports, too. Now, time for our snack fact of the day. This one sent in from Stephen, who's located. near Danny's Pizza in Queens. Q Gardens, baby. The sauce is the boss. Now, you can improve your memory, aka strengthen your hippocampus.

Yeah, one way is by basically kicking your brain out of autopilot, apparently, according to Stephen. When you take the same route to work and the same route home every day, your brain is basically an autopilot. So this is wild. Get this. At one time in his life, Bill Gates started taking alternate routes home every day to improve his memory.

The takeaway for this snack fact from Stephen, Getting lost every day will strengthen your brain. I'm sorry I was five minutes late. I was growing my hippocampus. I'll see how my wife likes that excuse. Snackers, happy 27th birthday to KJ from his girlfriend, Sarah Biel. He got his whole family snacking hard over in Seattle. Oh, and what up to Morristown, New Jersey?

James, happy 24th birthday. This snacks daily is for you. Full disclosure, the pee-wee hockey teams in Morristown, very tough to beat. We loved snacking with you. Please share with your buddy your favorite part of today's snacks and ask them, H-Y-H-Y-Y-S-D. You're going to be social distancing. Six feet away from someone this weekend, yell to them. H-Y-H-Y-Y-S-D.

We will be back Monday. Have a great weekend. If you know, you know. By the way, this is Nick, and both Jack and I own shares a Lulu Lemon, and Jack is probably wearing something Lulu right now. And we probably mentioned Amazon. I own stock of Amazon. The Robin Hood Snacks podcast you just heard reflects the opinions of only the host.

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.