🎥 Zoom intensifies (but its stock doesn't)
Hey Snackers,
The mysterious metal monolith that was found in a Utah desert... is mysteriously gone. Officials say it was removed by "an unknown party." The alien plot thickens.
The S&P 500 and Nasdaq indexes hit fresh records yesterday. Investors were upbeat about stimulus talks restarting, after centrists in Congress unveiled a $908B aid proposal.
Zoom's sales more than quadrupled last quarter — but the stock still fell
OK, Zoomer... Zoom is like that manatee squishing into aquarium glass to the tune of "I Can't Stop" (never gets old). It just dropped another insane quarter of expectation-beating growth, bringing in $777B in sales. That's because social distancing — like the manatee — didn't stop, either.
- +367%: How much Zoom's sales soared last quarter, nearly quintupling from the same quarter last year.
- +355%: How much Zoom's sales grew in the previous quarter. And they jumped 169% in the quarter before that. AKA: growth accelerated for three straight quarters.
- +555%: How much Zoom stock has soared since it went public in April 2019 with a market value of $15.9B. Today it's worth ~$115B.
Tough crowd... Zoom stock dropped 15% after the earnings announcement. Investors were disappointed because: Zoom expects 329% sales growth for this quarter (laaaame), which would be a slight slowdown from last. Also: Zoom's profit margin shrank from the previous quarter because it spent more.
You're only as valuable as your most valuable customers... All the free users (think: students, teachers) that Zoom gained last quarter aren't free: Zoom has to spend big $$$ to cover cloud costs so that Geometry class can happen — but it doesn't get paid. Still, Zoom still saw insane growth because "customers with more than 10 employees" grew 485% from last year. And more than 400K+ of them are paying.
Sephora moves into Kohl's with "Inception Retail" (it's really about anchoring)
Spraying on $20 worth of Caudalie toner... while "browsing" Sephora. You'll be able to do that at Kohl's soon, too: Sephora will open mini-shops in 850 Kohl’s stores by 2023. Sephora has stores in (now bankrupt) JCPenney — now it's winding those down to move in with Kohl's for 10 years. Sephora's luxurious parent LVMH approved the serious relationship.
- For Sephora: “This is about reach.” Kohl’s 1K+ stores have little overlap with Sephora's standalone locations, which tend to be in big cities.
- For Kohl's: It’s about attracting younger shoppers. Kohl’s hopes Sephora will help triple its beauty sales. Skincare has done well in the pandemic.
- For shoppers: More Sephora locations + less parking hassle. And: you can still earn Sephora loyalty points at Kohl's (free mini mascaras FTW).
Hands off the Fenty bronzer... Sephora's arch-rival Ulta Beauty recently announced it's moving into Target with the same "Inception Retail" model (store-within-a-store). Here's how Sephora's Kohl's relationship is different:
- PDA: "We're going to be very loud" — Kohl's CEO says shoppers will clearly see Sephora's mini-storefronts from outside Kohl's (equivalent of a couples pic on Insta).
- Exclusivity: Sephora's brands will become Kohl’s only beauty offerings in those stores and online, replacing the current ones (#NewBae).
Beauty is an anchor product... and Kohl's desperately needed a good one. Anchor products are things you go through fast and buy routinely. For CVS, that's prescription meds. For Chewy, that's dog food. For Kohl's, that's foundation. Now that malls and department stores are struggling, compelling anchor products are more important than ever. Kohl's is betting that Sephora's moisturizers will be just that.
What else we’re Snackin’
- Pinged: Salesforce is officially buying Slack for nearly $28B (its biggest purchase ever, by far).
- Trolled: Reddit revealed its daily active users for the first time (52M), which were up 44% from last year — now it wants more advertisers.
- Noted: Samsung may reportedly discontinue its high-end Galaxy Note phones due to the drop in premium smartphone demand.
- Blimey: Facebook will pay mainstream UK news outlets millions a year to license their articles for a dedicated news section.
- Whoa: Alphabet-owned DeepMind solves a 50-year-old "grand challenge" by predicting protein folding with its AI software.
- List: Nasdaq asks the SEC for permission to institute a diversity requirement for directors of companies listed on its exchange.
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Wednesday
- Earnings expected from Snowflake
Disclosure: Authors of this Snacks own shares of Alphabet and Amazon
ID: 1432899