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Hey Snackers,
19 years ago today, 2,977 people lost their lives in the September 11th attacks on New York, DC, and in Pennsylvania. It's a day that changed the world forever. It's also a day of Service and Remembrance, when Americans are called on to volunteer, help each other out, and we find strength in unity.
The market dipped yesterday as Big Tech stocks fell. The constant mention of "Big Tech" as a market mover is just another reminder that Apple, Amazon, Alphabet, Microsoft and Facebook make up over 20% of the stock market's total value.
Kickoff
Postmates becomes the official on-demand delivery partner of the NFL
Clear eyes, full hearts... can’t lose when you’re the official anything of the National Football League. ICYMI: last night, the NFL brought back football (the least socially distant of all sports). ICYM the score: Postmates won the marketing game.
- Postmates is now the 1st official on-demand delivery partner of the NFL. Great title to stick on the fridge for its parent Uber, which announced it's snatching up Postmates for $2.6B in July.
- The multiyear partnership also makes Postmates a Super Bowl sponsor. Just wait for the Chipotle Super Brown Rice Bowl and Tuna Poke Super Bowl commercials to roll in.
"Postmated" is basically LA slang... So far, Postmates has been the smallest fish in the Delivery Wars pond. Before it got acquired by Uber, it had just 8% of the US market share for delivery (mostly in LA). Don DoorDash dominates the mafia-style food delivery wars with a 40%+ share, followed by Uber and Grubhub. But Uber/Postmates has a winning marketing strategy:
- Play #1: People will mostly be staying home to watch games — no sweaty crowded bars and beer-drenched tables. Perfect time for a food delivery partnership with the NFL.
- Play #2: America is united in its love of football (at least there's one thing). This NFL sponsorship could be the perfect way for CA-based Postmates to win nation-wide love.
The NFL powers an entire economic ecosystem... Postmates is the official delivery partner of the NFL, but the NFL is the unofficial cash cow of American marketing. That's because 43 of the top 50 most-watched TV broadcasts last year were football games. The NFL is the blue whale that the whole ecosystem feeds off of. In turn, the fishes feed the NFL with big cash money for extra high-exposure partnerships and $12M commercials.
Furnish
Restoration Hardware is the comfiest member of corona-conomy's Fancy Flyers
Hit 'em with the cloud couch... Restoration Hardware is the upscale home-furnishing company whose stores look like WeWork and the Palace of Versailles had a baby (on steroids). RH prefaced its earnings with an inspiring quote from Emerson. We're certain that the Transcendental, nature-adoring poet would love to see his words on the financial report of a company that sells $5K couches.
- RH sales just barely grew compared to the same quarter last year, buuut...
- Profit jumped over 50%. RH got to keep more $$$ from each $10K table it sold by raising prices. It expects to have an even higher profit margin next quarter.
Luxury still pays off... RH stock jumped 20% on the strong report coupled with an analyst upgrade. Home Depot had its best quarter in 20 years thanks to the pandemic "House Hype." But non-affordable brands are thriving, too:
- Despite having sky-high prices during a time of economic turmoil, RH is still winning. Wealthy consumers are splurging to give their homes a (pricey) pandemic upgrade.
- Well said:“The high-income consumer is healthy and is investing in their homes” — Cristina Fernández, the analyst who upgraded RH stock.
The corona-conomy has Fancy Flyers... There's a class of expensive/luxury brands like RH that is thriving during the pandemic. These companies are seeing increased demand from wealthier consumers looking to adapt to the stay-at-home life.
What else we’re Snackin’
- LOL: LVMH does a 180, and is now citing Tiffany's "mismanagement” and “very disappointing” financials as the reason it's ditching the $16B merger.
- Pong: Facebook returns to its college roots, launching a network called Campus that's specifically for college students.
- Bagged: Simon Property Group, America's largest mall owner, teams up with Brookfield to buy JCPenney out of bankruptcy (price tag: $1.75B).
- Harmony: Chinese tech giant Huawei will launch smartphones next year that use its own operating system ("Harmony OS") instead of Google's Android.
- Mushu: China bans media coverage of Disney's "Mulan" in response to backlash — part of it was filmed in Xinjiang, where China has clamped down on ethnic minorities.
- Cloudy: Oracle returns to sales growth and posts strong earnings on increased WFH cloud demand.
Friday
- Earnings expected from Kroger
Disclosure: Authors of this Snacks own shares of Uber, Apple, Amazon, and Spotify
ID: 1328653
