Daniel McCarthy

@d_mccar

Marketing Prof , Stats PhD , founder of (acquired by ), founder of . Empirical to a fault.

Atlanta, GA
Vrijeme pridruživanja: siječanj 2009.

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  1. prije 5 sati

    Again, large losses + not great unit economics + slow growth + low entry barriers + traditional one-sided business model make for tough headwinds. As mentioned earlier though, at least now some of these factors are being priced into Casper's IPO price.

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  2. prije 5 sati

    Further context: it worries me that even though had 60 retail locations as of Q3 2019, most of which were opened in 2019, DTC growth rate was just 13%. What would that growth had been without those new store openings? w/ comments from yours truly...

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  3. proslijedio/la je Tweet
    prije 12 sati

    Accounting is INFORMATION. Voluntary disclosure is always the results of a cost and benefit analysis

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  4. prije 14 sati

    To the defense of those earlier private investors: the category as a whole was growing much more quickly in early 2019. It was really only over the past 12 months that we've seen a fairly dramatic slowdown in growth (at company and category). Low CLV + low growth = 🤷‍♂️

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  5. prije 14 sati

    [2/2] Also, their monthly churn rate is not skyrocketing, but rather is steadily marching towards what we would expect from a company whose baseline E(lifetime) is probably closer to 5-7 years (i.e., no retention "smoking gun"):

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  6. prije 14 sati

    [1/2]“History would suggest that this sort of snafu will be short-lived... If people forget about the ad . . . but remember , it might end up being more beneficial than it seems.” () Sounds about right.

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  7. prije 21 sat

    Unit economics matter (), and in this case we're not even getting much of a growth story at the company or category level (). But at least now, some of these factors are being priced into 's IPO price.

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  8. 5. velj

    Those who know me know this is something I could really get behind.

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  9. 3. velj

    [5/5] Fact pattern suggests category remains unhealthy, except for a margin bump. isn't immune, but capitalized temporarily on the fact that its biggest competitor, who had 50% MS, is bleeding out, keeping 's CAC down. What happens when bleeding stops? Multiple?

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  10. 3. velj

    [4/5] 6/ and have both seen good variable margin improvement, but the absolute level remains low (remember, they prepare and ship food in boxes at mid-level prices). 7/ 2 major buyers of meal kit companies shut down US subscription ops to focus on in-store.

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  11. 3. velj

    [3/5] 3/US subscription-only meal kit category is growing far slower than earlier estimates. 4/HLFFF retention & CAC are flat, while 's has gotten worse, falling to HLFFF levels. 5/$APRN, main competitor, continues to sink to new lows every day on shrinking revenues.

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  12. 3. velj

    [2/5]The fact pattern, as I can see it: 1/ HLFFF's retention is provably very low in the US: (independently confirmed by ). 2/ HLFFF says overseas retention is comparable to US, implying ROW retention must be very low as well.

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  13. 3. velj

    [1/5]Interesting thoughts, as always, in 's post. Always delicate writing about multiples given the ease w/ which they can be misused, but Alex stresses that throughout. Not to beat a dead horse, but an interesting company mentioned is .

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  14. proslijedio/la je Tweet
    30. sij
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  15. proslijedio/la je Tweet
    30. sij

    Professor McCarthy has been spot on with every one of his IPO analyses in the DTC space since I started following him. If he says tread carefully with the IPO, look out. You’d be wise to listen.

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  16. 30. sij

    Unit economics not good now, slowing growth, category not growing, execution and retail partner competition risk high => hard to see how CBCV drivers get better. Seems risky to pay ~2x revenues for this...

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  17. 30. sij

    6/ Wholesale accounts for ~50% of their growth. But many of their retail partners -- , , , -- are making their own mattresses now. Frenemies. 7/ mostly outsources. They don't make their own mattresses. Risk: manufacturers partner with WMT/etc directly.

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  18. 30. sij

    4/ Second Measure data implies DTC bed-in-a-box is slowing (see chart). The category is not growing much (or at all?). 5/ sales growth is slower than you think. Topline sales growth is 20%, but DTC sales (84% of total) only grew 13%. 13% -- almost single digits!

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  19. 30. sij

    2/ If their repeat business per acquired customer were to double, their marketing ROI would still be less than 60%. This is still low. 3/ Accessories are their big repeat business driver, but does selling good beds mean people will love their pillows.

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  20. 30. sij

    's IPO is looking to price at a ~$700-800M implied valuation. From a CBCV perspective, I'd watch out. A few thoughts: 1/ Simple calculations show their CLV is currently middling at best (). Real Q is where the CBCV drivers go from here...

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