These boots are made for somethin' |
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Spies are worried about AI, while also wanting it to do their work (they're just like us). Microsoft developed a genAI model for the US intelligence community that's separate from the internet. Doesn't mean the CIA won't have to deal with hallucinations. Stocks were mixed yesterday, with investors taking a step back after a four-day hot streak. Meantime, data showed that the rate at which consumers are falling into delinquency because of credit cards and auto loans is cooling. |
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Sport mode engaged… Crocs comfortably beat quarterly growth expectations this week, announcing it had sold 32M pairs of its holey kicks. The brand's having a banner year: Crocs' stock is up about 40%, and its recent Pringles collab sold out almost instantly. But something is cramping its style: Hey Dude, the lightweight slip-on loafer brand that Crocs bought for $2.5B in 2022, is underperforming. Hey Dude sales fell 17% last quarter, and Crocs slashed the brand's annual forecast, expecting revenue to decline up to 10%. |
- Hey Dude, don't make Crocs bad… Hey Dudes, lacking the irony capital of Crocs, have been called tissue boxes, too large, bread-loaf-like, and even "relationship-threatening." And they cost $40 to $75 a pair.
- Take a sad clog and make it better… Aware of its slip-on snafu, Crocs last month rehired former chief marketing officer Terence Reilly (who'd left to help turn Stanley cups into a wrestling-in-Target-worthy sensation) to lead Hey Dude.
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Camp style… Aside from Hey Dude, Crocs earnings reflected strong loyalty among the Jibbitz-lovin' public. Crocs-specific sales rose 15%, with international demand leading growth. Its success has spread across the industry as footwear companies capitalize on the ugly-fashion trend. Birkenstock's revenue jumped 22% in its holiday quarter on strong US demand. Mschf's $350 Big Red Boots sold out in seconds last year (and a Crocs collab version retailed for $450). And New Balance is releasing an already viral "snoafer" frankenshoe this summer. |
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"Functional footwear" walks a fine line… between appealingly "dad shoe" and unironically uncool. The pandemic trend of comfy-is-cool has persisted, but like Hey Dude, not all comfort-first shoes see success. Allbirds sales have sagged for several quarters and its market cap has plunged from $4B+ at its 2021 IPO to about $100M. |
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Good karma… Reddit shares jumped after the social co reported surging user #s and revenue, the first time Reddit's reported quarterly results since going public in March. Daily users grew 37% annually to a record 83M, as Redditors browsed pages like r/birdswitharms. In between yoked bird pics, users saw ads: revenue grew 48% to $243M, with ad $$ accounting for the bulk of it. |
- You r/unprofitable: Reddit's never turned a profit, and its quarterly loss widened to $575M from $61M last year (it cited IPO-related costs).
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High-intent users… Reddit's pitch deck to advertisers is a bit different than that of its social-media peers (BTW: Meta and Snap also enjoyed growing ad sales last quarter). Instead of chatting with friends and browsing selfies, Reddit users visit hyper-specific pages like r/Mattress — which could be an appealing ad buy for a home-goods store. Reddit visits are so intentional that it's become a quasi search platform as users add "Reddit" to the end of their Google queries (picture: "best mattress reddit," "weird bump on finger reddit"). Reddit doubled down on that symbiosis by cutting an AI-licensing deal with Google that could be worth $60M/year. |
- One downside: More than half of Reddit users aren't logged in (they're "lurkers"), meaning Reddit and its advertisers could lose out on some engagement and data.
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Success is contagious… There's a lot of pressure on little Snoo, Reddit's alien mascot. Reddit was the first social platform to IPO since Pinterest in 2019, and the 19-year-old company went public during a debut drought. Its share price has yet to dip below its $34 IPO price, and that success could inspire private companies on the bench to hit the public field. Dealmaking may already be picking up: 20 US companies went public in April, up from 12 in March. |
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It seems like the people in the jobs most threatened by generative AI are also the most likely to add AI to their résumés. In the past six months, non-technical professionals have boosted their use of AI-focused LinkedIn Learning courses by 160%, a Microsoft report said. Read more at Sherwood. |
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- Pancaked: Applebee's and IHOP parent Dine Brands said its profits petered out last quarter, with resto sales declining. The fast-casual slump isn't unique to Dine as people with lower incomes cut back.
- WTFTX: FTX said many customers will be fully reimbursed (thanks: recent market gains). The catch: they'll receive the dollar amount that their crypto was worth at the time of the bankruptcy. FYI: BTC has 3x'd since then.
- Surprise: Uber swung to a Q1 loss, despite growing ride and Eats demand (partly to blame: settlements and investments). Rival Lyft's bookings and riders accelerated, sending shares up nearly 5%.
- ElectAI: OpenAI joined a nonprofit setting standards for identifying digitally manipulated content like deepfakes. The issue could get thorny for genAI giants ahead of the US presidential election.
- Slipify: Shopify shares slid 19% — its worst one-day drop — after the ecomm colossus said it expects growth to cool as it competes with shopping stars Temu and Shein. Still, it had a strong Q1.
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- Unemployment data
- Peabody Awards winners announced
- Blues Music Awards
- Earnings expected from Warner Bros. Discovery, Six Flags, Warner Music Group, Dropbox, H&R Block, Roblox, US Foods, Hyatt, and Groupon
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Authors of this Snacks own bitcoin and shares of: Alphabet, Microsoft, Reddit, Shopify, Snap, and Uber |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more |
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