The Best One Yet
đ§ âUnicorn Pantsâ â Luluâs leggings turn 10. Chime is the McDâs of Money. Cavaâs hummus surge.
Mon, 19 May 2025
TBOY bi-annual survey: https://qualtricsxm88y5r986q.qualtrics.com/jfe/form/SV_3qlyZFxoJvFhFaeLululemonâs Align Leggings just turned 10 years old⌠And they actually invented athleisure.Chime, the online banking app, just filed to IPO⌠Because theyâre the McDonalds of money.Cava is beating Chipotle and Sweetgreen⌠Weâve got the apples-to-apples numbers to prove it.Plus, the most profitable graduation gift in history is⌠Dr. Seussâ âOh The Places Youâll GoâTBOY Live Chicago July 23rd, Tickets on sale NOW: https://www.axs.com/events/949346/the-best-one-yet-podcast-ticketsWant more business storytelling from us? Check out the latest episode of our new weekly deepdive show: The untold origin story of⌠Google Maps đ$LULU $CAVA $SG $MCDAbout Us: The daily pop-biz news show making todayâs top stories your business. Formerly known as Robinhood Snacks, TBOY Lite is hosted by Jack Crivici-Kramer & Nick Martell.GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts NEWSLETTER:https://tboypod.com/newsletter SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ Our 2nd show⌠The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Chapter 1: What are the top stories in today's business news?
This is Nick. This is Jack. Welcome back. It is Monday, May 19th, and today's pod, out of all the pods, is the best one yet. This is a T-Boy. The top three pop business news stories you need to know today. But first, a quick question. Besties, do you want a free Yeti cooler? All you got to do is take our semi-annual T-Boy survey.
We drop it only twice a year, and you might win that free Yeti cooler. That's right. We want to hear from the besties so we can make this the best show yet for you. So click the link in the episode description, take our three-minute survey, and you could win a Yeti cooler. But in the meantime, Jack and I whipped up three fantastic stories. Jack, what's on today's pod?
For our first story, 10 years ago, Lululemon's Align Leggings invented the athleisure category. So Jack and I will tell you the surprise reason Align Leggings became a billion dollar brand. For our second story, Chime, the online bank that swears it's not a bank, just filed to IPO. Because Chime is the McDonald's of money. And every industry needs its McDonald's. And our third and final story.
Of all the food chains in America right now, one is thriving. Who is it, Jack? Kava. Kava! Why is Kava beating Sweetgreen and Chipotle? Well... Jack and I are going to serve up the answer for you. But yetis, before we hit that wonderful mix of stories. I mean, no one's doing this mix. Love this mix, Jack. The top Google search happening right now. What is it, man? Is graduation gifts.
Ah, graduation gifts. The tradition of writing a check to your nephew after four years of them partying at Sig Sig App. They get diploma, you give gift. You got degree, they give money. The trending graduation gifts this year. What are they, Nick? Oh, Jack, it's good. The fifth one's a surprise, but number one is a laptop. That pairs well with an entry-level job. Number two is a Yeti water bottle.
You gotta hydrate like a bougie adult. Number three is AirPods. You gotta listen to podcasts all the time. Number four is the Kendra Scott necklace. Welcome to your 20s. You earned this necklace. But the fifth most popular graduation gift, what is it, Jack? A book. Specifically, Oh, the Places You'll Go. That's right. Dr. Seuss's book is the fifth most popular searched graduation gift. Yeah.
In fact, this was Dr. Seuss's very last book, published back in 1990. He was 86 years old when he wrote this book. And it turns out, Oh, the Places You'll Go is now the best-selling book in May and June nearly every single year, according to Bookscan. It sells 200,000 copies every graduation season. And this book is nearly 40 years old.
The wild thing for Jack and I, Dr. Seuss never intended this book to be a graduation tradition in the first place. Yeah, it was Walmart, Target, and Amazon who started promoting this book as a graduation gift. Classic. But now Dr. Seuss' final rhymes are the go-to grad gift. and they make $7 million every spring for the Dr. Seuss estate.
So to all the Yetis out there graduating, you have brains in your head, you have feet in your shoes. Let's hit our three stories of the best business news.
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Chapter 2: How did Lululemon's Align Leggings revolutionize athleisure?
But it was the Align legging back in 2015 that was the first with a new versatile fabric that worked for bar class and for brunch. Before the Align leggings, you'd have to shower after a workout. You couldn't go into the office in yoga pants. You'd have left your leggings back in your Pilates locker.
But after the Align leggings, post-Pilates, you could stroll right to your desk and nobody would turn ahead. And now you can't sip a latte without seeing eight ladies wearing Align leggings out there. Well, last week was the 10th anniversary of the launch of the Align leggings, Lululemon's first billion dollar product. And here's the wild thing Jack and I noticed about Lululemon stock.
It only started blowing up in the years after Align. So besties, add it up. And this isn't a hero product. This is a goddess product. So Jack and I got curious, how did Lulu create it? Turns out their R&D lab focused on the science of feel. And what exactly is that, Jack? How do you feel as a customer when you first touch the product in the store? Okay, now here's the important contrast.
At this time, Under Armour was living its best life. UA was all the rage. Get in this house. They focused on on-field performance. Technical apparel. On the other hand, Lululemon bet on how you feel being more important than how you perform on the mat. That drove them to develop this new fabric. It's called Nulu. And the moonshot goal of Nulu was to make it feel... like a rose petal.
That was the ambitious goal here, was like, you know that feeling on the rose petals, like soft? Pretty amazing. There's a reason you buy a huge bag of rose petals to propose to your fiance. And then stick your face in it. So Jack, what was the result of this science of feel strategy? By focusing on feel instead of form, women wore these pants after their workout, outside of the yoga studio,
Not for SoulCycle class at all, just as a daily thing to wear. So it appears that philosophy of feel opened the door to wearing leggings all day, becoming a cultural phenomenon. And that's why we say it was this specific pant that invented the modern athleisure category. On the other hand, no one's going out for Bloody Marys in Under Armour or wearing sweat-wicking gear to the boardroom.
Will you protect this house? No, no, we're okay, thank you. Yetis without the Align legging, Lulu would probably just be a hoo-hoo. But there was one other key to this product's success. Nick, were you Dr. Seuss's understudy? Been training for this moment my entire life, Jack. So what's the takeaway for our buddies with the Lulu Align Legging? It's advice a yogi told us, ironically.
Let go of what you can't control. Yetis, there is one surprise factor that also caused Lululemon's Align leggings to take off and be worn all day. It was something Lulu couldn't predict and couldn't control. It was skinny jeans. Yeah, back in 2015, skinny jeans were the pants in style. Every millennial lady had like six pairs of Madewell.
And by chance, Lulu's Align leggings had a similar silhouette as tight-fitting jeans did. Which meant you could wear the same tops with your new Lulu Align leggings as you could with your existing pair of skinny jeans. The result? It was so easy to buy these leggings because it was compatible with your existing wardrobe. Exactly. So Lulu, they could have never predicted this twist.
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Chapter 3: Why is Chime considered the McDonald's of banking?
Consumer sentiment in the U.S. has fallen for five straight months. Yeah, in May, we actually had the second lowest consumer sentiment vibe ever. The only lower point was June 2022, when inflation and interest rates were crazy high. And we're seeing this in the brown bag effect that Jack and I told you about. Office workers are bringing lunch from home...
But Kava just announced earnings that made us ask for more hummus, baby. Extra hummus, because it's not extra. The average Kava had 11% sales growth last quarter. Even wilder, kava customers are upgrading their bowls. They're splurging on pita chips and juice right now. Despite this economy, kava fans are going full treat yourself, and they're earning extra muamara, even though that costs extra.
Second point check, muamara is like my favorite word to say ever.
A baba ganoush is mine. But besties, there is an explanation for this, and it is strategic kava prices. Although kava bowls cost 15% more than chipotle bowls on average, that delta is narrowing. In fact, Kava's CEO said in their earnings last month, we are a port in the inflation storm. Kava has purposely kept their pricing slower than inflation.
On the other hand, Chipotle, they're basically shrinking their burritos down to the size of an hors d'oeuvre. And they've raised prices seven times since 2021. I know the guac is extra. So Jack, what's the takeaway for our buddies over at Kava? Apples to apples, Kava is 50% more valuable than Chipotle. So yetis, how do a couple ex-finance guys like Jack and I compare Chipotle to Kava?
Well, we don't look at their stock and we don't look at their market cap either. We look at their market cap per location. Exactly. That's how you can compare two things of different size and different maturity. So you take the total value of the company and then divide it by the total number of locations. And that lets you compare two companies apples to apples.
Sweetgreen is worth $2 million per location. Chipotle is worth $20 million per location. but Kava is worth $30 million per location. Wall Street gives Kava this high valuation on the belief it'll grow faster than your fast, casual bowl competition. After all, Kava only has one-tenth as many locations as Chipotle does.
Which is why, based on our analysis, apples to apples, Kava is 50% more valuable than Chipotle.
Jack, could you whip up the takeaways for us to kick off the week?
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