Consumer Cyclical

Levi Strauss

Levi Strauss Jonathan Poland

Levi Strauss & Co. (LEVI) is a global apparel company that designs, markets, and sells jeans, casual wear, and related accessories. The company was founded in 1853 by Levi Strauss, who immigrated to the United States from Bavaria in 1847. Strauss and his partner, Jacob Davis, invented the first blue jeans in 1873 by adding metal rivets to the pockets and waistband of denim pants, creating a durable garment for miners and laborers.

Today, Levi Strauss & Co. is a publicly traded company with headquarters in San Francisco, California. The company operates in over 110 countries and sells its products through various channels, including wholesale, retail, and e-commerce. Levi’s brand portfolio includes Levi’s, Dockers, Denizen, and Signature by Levi Strauss & Co. The company’s products are sold in a variety of styles, sizes, and prices, and are marketed towards men, women, and children. In addition to jeans, Levi’s also sells a variety of apparel and accessories, including shirts, jackets, shorts, skirts, dresses, belts, and bags.

as of April 7, 2023
Latest quarterly numbers were pretty solid. Revenue grew 6.3% year over year, coming in at $1.69 billion and beating estimates by $80 million. Non-GAAP earnings per share were $0.34, beating by $0.01. A key to the growth was in the Direct-to-Consumer (DTC) segment where sales were up 12%. This is key to the pivot in distribution. The company also reaffirmed expectations for the year with net sales between $6.3 billion and $6.4 billion and adjusted diluted EPS of $1.30 to $1.40. If it can grow earnings at almost any rate, this stock price today ($15ish) is a discount. That said, it’s likely not going to produce 30% a year for investors. For that the price would likely need to be in the single digits.

WW International

WW International Jonathan Poland

WW International, Inc. (WW) is a global provider of weight management products and services, offering a variety of nutritional, activity, behavioral, and lifestyle tools and solutions. The company delivers multiple digital subscription products for wellness and weight management, featuring interactive, personalized resources that enable users to follow its weight management program via its app and web-based platform. These offerings include personal coaching and digital products and foster a supportive community for members to share their weight loss and management experiences.

Additionally, WW International offers a range of consumer goods, such as bars, snacks, cookbooks, and kitchen tools. The company also licenses its trademarks and intellectual property for use in food, beverages, and related consumer products and services, while providing publishing services. Products are available through e-commerce platforms and partner channels.  Previously known as Weight Watchers International, Inc., the company rebranded as WW International, Inc. in September 2019. Established in 1961, WW International is headquartered in New York, New York.

as of April 11, 2023
Goldman upgraded the stock today based on a deal Weight Watchers made with Sequence, a Telehealth provider. WW will begin to offer a pharmaceutical based clinical subscription service that it can integrate with its legacy behavioral based weight management offering. That said, Weekend Health Inc. (Sequence) is 2 years old (I think?) and has over $25 million in revenue. Though WW generates over $1 billion in annual revenue, this bolt on acquisition could mean it finally starts growing again. Goldman puts a $13 price target and it’s up 60% today to $6.75. Personally, I think this company cannot actually create permanent value. The stock seemed to be a pump and dump scam back in 2015 – 2019 when it went from $10 to $100 on the back of Oprah buying stock. Until this deal with Sequence, the stock was off 90%. Don’t know that this one is a 10 bagger and with sales and profit contracting, WW is more dead weight going into a possible recession.

Build-A-Bear Workshop

Build-A-Bear Workshop Jonathan Poland

Build-A-Bear Workshop, Inc. (BBW) is an American specialty retailer that provides a unique, interactive experience for customers to create personalized stuffed animals. The company was founded in 1997 by Maxine Clark and is headquartered in St. Louis, Missouri.

The Build-A-Bear Workshop concept is based on providing a fun, engaging environment where customers can participate in every step of creating their own customized stuffed animals. Customers can choose from a wide variety of animal designs, stuff their chosen animal with the desired amount of filling, add a personalized recorded message, and select clothing and accessories to complete the customization process.

Build-A-Bear operates its stores primarily in shopping malls, but also has locations in select tourist destinations, standalone stores, and other high-traffic areas. In addition to its physical retail presence, the company offers e-commerce services through its website, where customers can shop for stuffed animals, clothing, and accessories.

Over the years, Build-A-Bear has expanded its product offerings to include licensed characters from popular movies, television shows, and other franchises, as well as collaborations with well-known brands. This strategy has helped the company maintain relevance and appeal to a wide range of age groups and interests.

Build-A-Bear Workshop, Inc. has built a strong brand around its unique, hands-on retail experience, emphasizing creativity, personalization, and emotional connections between customers and their customized stuffed animals. This has allowed the company to differentiate itself within the retail market and create a loyal customer base.

as of April 11, 2023
Three years ago, this was a $1 stock. Today its 24x higher and based solely on the earnings per share, looks cheap. However, don’t be fooled by the low price multiple. To be fair, the death of retail seems overblown, especially with what I believe a crash in commercial real estate upcoming. That said, children are definitely the one segment where retail makes total sense. The ability to bring your kid to the store and let them play for an hour is a huge help for parents. Doesn’t make the company’s stock worth owning at this price.


Lululemon Jonathan Poland

Lululemon Athletica (LULU) is a Canadian athletic apparel retailer, best known for its high-quality yoga and workout clothing. The company was founded in 1998 by Chip Wilson in Vancouver, British Columbia. Lululemon’s initial focus was on designing stylish and functional yoga clothing for women, but it has since expanded to offer a wide range of athletic wear for both men and women.

Lululemon’s products are known for their premium materials, stylish designs, and attention to detail. The brand has built a strong following and loyal customer base, largely due to its emphasis on quality and performance. The company’s signature fabric, called Luon, is a blend of nylon and Lycra that is moisture-wicking, breathable, and stretchy, allowing for optimal comfort during exercise.

as of April 13, 2023
Great business, horrible price. Lululemon’s growth story is second to none in apparel retail.  It’s been on fire since it got started, growing 20,000% in the last 20 years from $40 million in sales to more than $8 billion last year. Another big positive is the ability to convert retained earnings into high market capitalization. Lulu has done this very well with every $1 in retained generating $19 in value. That said, the current price is not ideal.


Arhaus Jonathan Poland

Arhaus, Inc. (ARHS) is a lifestyle brand and high-end retailer specializing in the home furnishings sector. The company offers a wide range of products across various categories, such as furniture, lighting, textiles, décor, and outdoor items. Its furniture selection includes bedroom, dining room, living room, and home office furnishings like sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, and modular storage solutions. The outdoor product line features outdoor dining tables, chairs, chaises, lighting, textiles, décor, umbrellas, and fire pits.

In addition, Arhaus offers a variety of lighting products, including artistic lighting fixtures such as chandeliers, pendants, table and floor lamps, and sconces. The company’s textile offerings encompass handcrafted indoor and outdoor rugs, bed linens, as well as pillows and throws. Their décor product line ranges from wall art and mirrors to vases, candles, and other decorative accessories.

Arhaus distributes its products through an omni-channel approach that includes showrooms, an e-commerce platform, catalogs, and in-home designer services. The company, founded in 1986, has its headquarters in Boston Heights, Ohio.

as of April 13, 2023
Arhaus is a premium retailer in the home furnishings industry, offering merchandise across categories like furniture, textiles, and outdoors. Products include dining room, home office furnishings, outdoor items, and lighting fixtures. Really unique stuff compared to Pottery Barn or West Elm – more on par with RH. Recently announced significant growth in net revenue and net income with FY22 net revenue up 54% to $1.2 billion compared to last year with net income up 270% from 2021, coming in at $136.6 million. The increase was due to improved supply chain allowing for faster delivery of backlog orders. All in all, it’s a growth story with solid financials at a bargain price. 

TravelCenters of America

TravelCenters of America Jonathan Poland

TravelCenters of America Inc. (TA) runs travel centers, truck service facilities, and restaurants across the United States and Canada. These centers provide a wide range of products and services, such as diesel fuel, gasoline, truck repair and maintenance services, full and quick service restaurants, and customer amenities. The company’s restaurants operate under several brands, including IHOP, Burger King, Taco Bell, and Starbucks. Additionally, the travel stores offer electronics, clothing, convenience products, fresh food, and regional souvenirs, among other items. The company also provides parking space under the Reserve-It brand. The travel centers operate under various brand names, including TravelCenters of America, TA, TA Express, Petro Stopping Centers, and Petro, while the truck service facilities operate under the TA Truck Service brand name. The company caters to trucking fleets, independent truck drivers, local and highway motorists, and casual diners. TravelCenters of America Inc. was established in 1972 and is headquartered in Westlake, Ohio.

as of February 16, 2023

Still pissed that I missed this one in 2019 when it was in single digits. Today, BP made a super smart $1.3 billion all cash bid for the company and unless there are some regulatory hurdles or the deal falls through because it’s low AF, then say bye bye to this one. I don’t think BP will care about fix and flip like a PE firm would, but that’s also a possibility. It will have to assume the $2.2 billy in debt, but will get a pretty decent asset, in my opinion.

Big 5 Sporting Goods

Big 5 Sporting Goods Jonathan Poland

Big 5 Sporting Goods Corporation (BGFV) is a retailer of sporting goods in the western region of the United States. The company offers a variety of products, including athletic shoes, apparel, and accessories, as well as outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, and winter and summer recreation. Additionally, the company provides its own private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment, which are sold under its own trademarks, including Golden Bear, Harsh, Pacifica, and Rugged Exposure. As of May 03, 2022, Big 5 Sporting Goods Corporation operated 431 stores and an e-commerce platform under the same name. The company’s headquarters are located in El Segundo, California. Its founding dates back to 1955.

as of February 15, 2023

Big 5 is under a ton of pressure right now. Traders have amassed a 20% short position in the company. I would imagine stemming from the $300+ million in total debt and just $34 million in cash. At the bottom of Covid in April 2020 would have been the time to buy in, with the stock rising 40x at its peak and still up 10x now. Unlike its larger competitor Hibbett, Big 5 hasn’t used excess earnings to grow, but to give back to shareholders in a pretty solid quarterly dividend. Big 5 has booked over $300 million in net profit since 2012 through operational efficiency. In other words, it’s squeezing out more from slightly higher revenue. This is not a growth story, it’s a dividend trade.


DraftKings Jonathan Poland

DraftKings, Inc. (DKNG) is a leading digital sports entertainment and gaming firm with a presence in 17 countries. The company offers innovative sports betting and gaming technologies through its DraftKings brand, which is available in 5 states for iGaming. It also operates Golden Nugget Online Gaming, a well-known iGaming brand and product, in 3 states. With mobile and retail betting options in 18 states, DraftKings’ Sportsbook is fully operational and compliant with regulations. The company’s daily fantasy sports product is accessible in 6 countries and covers 15 sports categories. Furthermore, DraftKings offers the DraftKings Marketplace, a digital collectibles platform that offers carefully selected NFT drops and supports secondary-market transactions. It also owns Vegas Sports Information Network (VSiN), a multi-platform content and broadcast company. DraftKings was established in 2011 and is based in Boston, Massachusetts.

as of February 11, 2023
Tomorrow is Super Bowl Sunday and of course there are plenty of degenerates out there placing bets. Stick to that and avoid DraftKings for the time being, especially as a long-term investment. Maybe the company will get its act together an start cutting SG&A costs which run at 300% of the company’s gross profit. It’s definitely the brand name in sports betting, but an $7 billion cap is still too high.


Carvana Jonathan Poland

Carvana (CVNA) is an American online used car dealership. It offers a fully digital car buying experience, allowing customers to purchase, finance, and trade-in vehicles entirely online. The company was founded in 2012 and is headquartered in Tempe, Arizona. Customers can either choose to have the vehicle delivered to them or pick it up from a Carvana “Car Vending Machine” located in select cities. The company’s unique business model and customer experience has attracted attention and investment, making it one of the leading players in the online used car space.

as of February 7, 2023

One of the most shorted stocks in the market right now, Carvana has had an incredible rise going from $41 million in sales in 2014 to more than 14.5 billion in the last twelve months. The problem is that it costs them a lot of money to do it. Gross profit comes in at around 11%. That said, someone managing the company could potentially be able to figure it out. Where to start? Debt. Carvana has a lot. $8 billion in fact. In the last month, the company’s stock is up huge showing more that its shares were mispriced not necessarily that the company is worth its new higher valuation.

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