OPERATORS E043: Shopify's price increase, Tapestry's earnings, TikTok as a marketing platform & more
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Feb 14, 2024 In this episode, the Operators discuss various topics including Tapestry's earnings, the Amer Sports IPO, Shopify's price increase, and the effectiveness of TikTok as a marketing platform. They analyze the financial performance and growth potential of Tapestry, share their thoughts on Amer Sports' brands, debate the impact of Shopify's price increase, and explore the view-through nature of TikTok. The conversation also covers overspending on Amazon advertising, evaluating TikTok as an advertising platform, assessing audience trust on TikTok, the complexity of geopolitics, and handling the unknown in business.
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Tapestry’s Solid, Profitable Model
- Tapestry is a well-run, low-growth accessories business producing strong net income and free cash flow.
- Its valuation is modest due to limited growth but it offers a stable, profitable model many brands aspire to.
Growth Trumps Profit in Valuations
- Market valuations heavily favor high growth over steady profits in consumer brands.
- Lululemon outvalues Tapestry due to its growth, despite lower operating income.
Lock in Shopify Pricing Now
- Shopify’s recent price increase mainly affects legacy accounts, with most customers seeing little change.
- Accept long-term fixed contracts now to lock in current pricing before potential future hikes.