John Huber, Founder and Portfolio Manager at Saber Capital Management, joins the podcast today to describe the concept "Inevitable Retail Winners", characteristics of inevitability, as well as talking through many different examples that exemplify this concept. In addition, John shares his thesis on Floor & Decor (NYSE: FND).
For more information about Saber Capital Management, please visit: https://sabercapitalmgt.com/home/
Article from Base Hit Investing: https://basehitinvesting.substack.com/p/munger-podcast-thoughts-retail-stocks
YAV blog post on retail: https://www.yetanothervalueblog.com/p/cyber-monday-thoughts-part-1-retail
Chapters:
[0:00] Introduction + Episode sponsor: Alphasense
[1:55] What is an "inevitable retail winner" and Charlie Munger's thoughts on this
[10:19] Restaurants
[12:34] Various retail companies mentioned, are they "inevitable retail winners"; characteristics of "inevitability" - using AutoZone as an example as well
[22:09] Retail management and culture
[27:33] Floor & Decor $FND: what is their moat? / customer experience / why inventory is a moat
[38:55] Pro vs. DIY customer spend / comment on ROIC on new stores / does $FND want to own their own stores
[45:14] Macro impact on $FND?
[51:14] $FND valuation
[58:20] $FND described as a "category killer"
[1:00:21] $FND risks
[1:03:36] Any difference in $FND pre vs. post IPO + mistakes management made in the past
[1:07:16] Push back on $FND thesis: recent acquisitions and "category killer"
[1:11:32] Any other retails that John thinks has a chance to be inevitable or he thinks that a lot of investors talk about in this "inevitable" way
Today's episode is sponsored by: Alphasense
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