Wednesday Jun.16, 2021

🌮 The Yelp economy

_More daily views than daily new Shein items [Nick David/Stone via GettyImages]_

Hey Snackers,

You've heard of "revenge spending." New thing: revenge luxury spending. Lamborghini is almost sold out for the year, and Chanel's sales grew by double digits last quarter.

Stocks dipped yesterday on slowing retail sales. Speaking of...

Dine

Yelp's new data tells us about the reopening — but it’s really a window into the digital economy

Fewer scented candles... more candlelit dinners. Retail sales fell 1.3% last month, but it's not a bad sign for recovery. Spending is shifting from physical goods to "revenge experiences," as Americans swap TV menus for cocktail menus:

Down: Spending on furniture, electronics, and appliances fell — because we've already spent enough on our biodomes.
Up: Restaurant spending jumped 1.8%, and clothing sales jumped 3% (for all those date night fits). But restaurants are still struggling to fill job openings (#LaborShortage).

Hold my beer garden... Yelp's latest data blows those retail numbers out of the iced tap water. Last month, Yelp seated a record 3.7M diners in the US — up 48% from May 2019. Yelp bookings surged past pre-pandemic levels in almost every US state, minus NY.

In Texas and Florida, where Covid restrictions have been lifted longer, Yelp diners more than doubled last month compared to two years earlier.
In California, which lifted its mask mandate and restrictions yesterday, diners were already back to pre-Covid levels in May.
It could be that restaurants added more pandemic seating areas (hence: extra booking space). But we think something else is going on...

Yelp’s data confirms the digital transformation... The 2019 numbers and the 2021 numbers are apples and digital oranges. What these comparisons really reflect: the number of restaurants and diners that moved online. During the pandemic, restaurant owners flocked to tech platforms to secure takeout orders, set up digital menus, and add contactless payments. And it appears they're staying digital. This shift bodes well for restaurant tech providers like Yelp, OpenTable, Toast, Square, and Resy.

Fit

Chinese shopping app Shein overtakes Amazon by going ultra-fast fashion

50 new fits... for 50 new TikTok vids. Amazon's feeling more like MySpace right now. After 152 days as the #1 ecomm app in the US, the 'Zon has lost the top spot to Shein. The Chinese online apparel retailer is a Gen Z favorite, thanks to low prices and a massive offering of on-trend clothing. Shein adopted the fast-fashion model pioneered by Forever 21, H&M, and Zara — then turbocharged it:

Quick fits: Shein spots a halter top that's trending on social. Two weeks later, it’s on Shein's virtual shelves for $10 less than the original. Shein added 5.2K new items yesterday alone.
Quick hits: TikTok and Insta influencers are key to its marketing, along with virtual concerts from celebs like Katy Perry and Lil Nas X.
Tight lips: Shein is still super secretive about its business, suppliers, factory conditions, and management.

We do know one thing... Shein is raking in the big bucks. Sales reportedly more than tripled to $10B last year — well above Zara's online sales. Shein's US success is partly thanks to a loophole: Trump's 2018 China tariffs only applied to packages over $800 (very rare for a Shein order). Then China effectively waived export taxes for D2C companies, adding more fuel to Shein's US growth.

Welcome to "real-time fashion"... In the TikTok era, trends change so fast it's hard to keep up. Fast fashion retailers are struggling as Zillenials opt for second-hand Levi's over H&M florals. By sharing app search data with suppliers, Shein can react to new trends almost instantly. If peacock patterns are trending on Monday, Shein can tell Chinese factories to have peacock crops/shorts/earrings ready for shipping by next Wednesday — much faster than even fast fashion. One big downside: real-time fashion could result in even more waste and enviro-harm.

What else we’re Snackin’

Friends: The US and the EU have agreed to suspend their epic trade dispute over government subsidies to plane-makers Boeing and Airbus.
Fail: AstraZeneca's antibody cocktail was only 33% effective at preventing symptomatic Covid-19 in a large-scale trial.
Foul: DraftKings shares tumbled after short seller Hindenburg Research alleged that the sports betting app has some shady gaming links.
Poddy: Spotify sealed an exclusive deal — reportedly worth $60M — to bring top podcast "Call Her Daddy" into its Gated Garden.
OK: Jack in the Box is partnering with Uber Eats and Jason Derulo on a virtual restaurant called "One in a Milli." So modern.

Wednesday

Earnings expected from Honest Co and Lennar Corp

ID: 1687630

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Pop Quiz!

Sales of what are up 136% since 2019?

Don't be a sucka

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

What’s up doc?

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HOP TO IT

Joshua Topolsky

We get results!

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Balancing Act

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Acrobatic Accounting

So, you want to join the circus?

Megan DeMatteo

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

Apple reportedly cuts Vision Pro production due to low demand

Seriously, relax

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Economy keeps on humming along

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

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Black’s Gold

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Here’s how.

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Chipotle continues to go on a tear, hitting a sales record

Hey it might not be the kind of AI stock investors are all hot and bothered over, but don’t sleep on the burrito business.

Chipotle posted much better-than-expected results on Wednesday, with sales rising 14% to a record $2.70B in the first quarter, which is like a billion additions of guac.

Profits jumped 23% to $359M.

Chipotle has quietly cruised higher over the last year. It’s up 63%, compared to the 24.5% gain for the S&P 500 over the 12 months through Wednesday’s close. Not bad for a rice-and-beans based business model.

Rani Molla

4/24/24

Facebook had great earnings, the market hates it

Facebook reported impressive earnings. Record first-quarter revenue thanks to AI! Profit up 117% compared to a year earlier! But at the same time, its capital expenditures are going up and it’s expecting second quarter revenue potentially lower than analyst estimates. So in other words, the future doesn’t look as bright as the present.

All in all the stock is down more than 10%. (Basically the opposite of what happened with Tesla yesterday).

Net net

4/24/24

Earnings can’t stop, won’t stop

Rani Molla

4/24/24

Why Tesla investors are holding on to hope for a cheap car

Despite terrible earnings numbers last night — declining vehicle sales, disappointing revenue and profit, enormous spending — Tesla stock is up more than 10% as of midday. That’s a welcome move for the car company, that’s been among the worst performers this year in the S&P 500.

Why the about face?

While Reuters reported earlier this month that Tesla is no longer making its long-awaited $25,000 mass-market car — news sent the stock, already suffering from headwinds across the EV industry, down even further— Tesla reported during its earnings that it’s going to make cheaper cars than it currently has.

Before the second half of next year, Tesla said it will release “more affordable models” that “will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

So rather than release the $25,000 Model 2, Tesla is incorporating some of that technology into its existing models. UBS called it the Franken-3Y2.