Brew Markets — "Meta’s Virtual Reality Check & Kroger Shelves Its Automation Push"

Podcast: Brew Markets (Morning Brew)
Host: Ann Berry
Guests/Co-hosts: John (Producer)
Date: December 4, 2025

Overview

In this episode, Ann Berry and producer John break down key stock market stories of the day, focusing on Meta’s dramatic cutback on its Metaverse ambitions and Kroger’s retreat from a costly automation initiative. The discussion moves through several major earnings reports — including Dollar General, PVH, and iRobot — reflecting larger trends across tech and retail. Ann brings colorful market analysis, tactical context, and lively banter, making financial news both approachable and insightful.

Key Discussion Points & Insights

1. Meta’s Metaverse Retreat: A Strategic Pivot to AI

[00:46–04:56]

• Meta is reportedly slashing the Metaverse budget by up to 30%, targeting the Reality Labs division (Quest headsets, Meta Horizon virtual world). Layoffs are expected as early as January.
• Since rebranding from Facebook to Meta in 2021, the company has poured over $70 billion into the Metaverse, with poor returns. Mainstream adoption hasn’t materialized.
• Ann’s Take:
  • Meta generated ~$30B in operating cash flow last quarter, but invested nearly two-thirds back into the business. With pressure from investors, "Meta really needs to pick its spots when it comes to where to spend that precious cash. And the Metaverse is not a winning spot. So onto the next bet, which as we all know, is AI." (Ann, 02:19)
  • Ann applauds the move: “It is incredibly hard for public companies to pivot, especially when they are massive... The ability to just call it is a critical one.” (Ann, 03:12)
  • Draws parallel to Amazon’s culture of experimentation and willingness to fail: From Amazon’s failed Haven health venture to quickly pulled in-house launches (“fail fast, double down on winners”).
  • Quote:

    "Next time, it shouldn't take Meta four years and $70 billion to course correct, but I doubt it will make the same mistake twice." (Ann, 04:35)

  • Result: Meta shares up over 4% on the news.

2. Kroger: Automation Ambitions Cooled Down

[05:14–11:57]

• Kroger earnings:
  • Earnings per share slightly beat estimates, but total sales ($34B) missed forecasts.
  • Grocery industry faces razor-thin margins; sales misses have a big bottom-line impact.
• Automation push fails:
  • Kroger invested $2.6B in automated fulfillment centers (like Amazon warehouses), aiming to compete on rapid delivery.
  • The plan led to difficult working conditions (“34 degrees inside these warehouses and these poor folks working there were wearing parkas... it just seemed like a challenge.” — John, 08:10) and operational issues.
  • Ann: “At the end of the day, Kroger decided they just weren’t going to win on speed… this was not the way to get there.” (Ann, 09:04)
  • Winding down automation projects results in a $1.5B impairment charge.
• Kroger pivots to partnerships with Instacart and DoorDash for e-commerce delivery, using stores as local fulfillment centers (a la Whole Foods for Amazon).
• CEO transition:
  • Ron Sargent, interim CEO (ex-Staples), has been actively making decisions (ending automation push, closing restaurants and stores).
  • Sargent’s “hands-on” approach notable for an interim CEO; board seeks a permanent replacement from outside the company.
  • Ann observes: Sometimes “it's easier for an interim CEO who's not going to live with the consequences to do these very, very difficult things.” (Ann, 11:57)
• Stock reaction: Kroger shares down ~4.5% today; up ~3% YTD — “in this kind of market, slightly up 3% [is] almost the new flat.” (Ann, 12:39)

3. Snowflake: Strong Numbers, Investor Discontent

[13:06–16:33]

• What is Snowflake?
  • Offers cloud-based data analysis and storage platform (with minimal latency). Big customers run on AWS, Azure, etc.
• Earnings details:
  • Quarterly revenue up ~30% YoY ($1.2B), earnings beat expectations, but product revenue growth slowed (from 32% last quarter to 29% this quarter).
  • “There’s a feeling that it was overshadowed by slowing product revenue growth... the stock was down over 11% today.” (John, 14:49)
  • Shares up 72% YTD, but valuation likely already priced in strong results.
• Key metrics:
  • Remaining Performance Obligation (RPO): “$7.9B, up 37% Y/Y” (Ann, 15:42).
    Indicates solid pipeline and future growth. CEO emphasizes adding a record 615 new customers.
  • Largest software IPO ever (2020). Market cap: $90B, still not in S&P 500 due to lack of GAAP profitability, significant stock-based comp.
  • Seen as a bellwether for how software stocks navigate the AI era.

4. Rapid Rundown: iRobot, Dollar General, and PVH

[19:12–22:51]

iRobot (Roomba)

• Once again in focus as share price jumps 70% (!) on reports that the Commerce Department wants to boost U.S. robotics manufacturing.
• Ann and John highlight the “punny headline” about “sweeping initiatives to accelerate the domestic robotics industry.”
• Shares fell back down 15% the next day, seen as more speculation than a real lifeline.

Dollar General

• Earnings surprise: Raised profit outlook after beating sales/earnings expectations; stock up 12% midday.
• Ann’s insight: Dollar stores benefit when consumers feel pressured ("trading down" phenomenon even for higher-income segments):

  “If you go back and look over history, there’s been a lot of evidence that shows that when consumers are pressured, dollar stores tend to do quite well…” (Ann, 19:44)

• Foot traffic up; Dollar General finally “gets its moment.”

PVH (Philips Van Heusen)

• Shares down nearly 12% on earnings, down 25% YTD.
• Struggling to pivot Calvin Klein and Tommy Hilfiger into global “lifestyle brands” rather than just apparel labels.
• Wall Street disappointed with guidance.

  “They are sort of in the thick of trying to come up with new identities… PVH really trying to figure out what it is in terms of strategy to get growth.” (Ann, 22:12)

Notable Quotes & Memorable Moments

• Meta pivots away from Metaverse:

  “It is incredibly hard for public companies to pivot, especially when they are massive... The ability to just call it is a critical one.”
  — Ann Berry (03:12)

• On failed corporate bets:

  “Amazon is clearly fine with failing quickly and then betting bigger on concepts that actually survive. The most agile companies typically have this mindset.”
  — Ann Berry (04:24)

• Kroger’s automation misstep:

  “...it was 34 degrees inside these warehouses and these poor folks working there were wearing parkas...”
  — John (08:10)

• On ‘interim’ CEO boldness:

  “It’s easier for an interim CEO who's not going to live with the consequences to do these very, very difficult things.”
  — Ann Berry (11:57)

• Dollar General’s tailwinds:

  “Dollar stores tend to do quite well for two reasons. Lower income consumers... and also higher income consumers tend to also start switching to look at shopping in dollar stores to try and get more bang for their buck.”
  — Ann Berry (20:00)

Timestamps for Key Segments

• Meta’s Metaverse cuts and pivot — [00:46–04:56]
• Kroger’s automation reversal and CEO transition — [05:14–11:57]
• Snowflake earnings and software sector context — [13:06–16:33]
• Market wrap, iRobot, Dollar General, PVH — [18:26–22:51]

Overall Tone & Style

Ann Berry maintains an engaging, energetic tone, mixing depth with wit (“I learn something new in America every single day,” 05:59). The exchanges, especially with producer John, are personable and relatable, making complex financial news more digestible ("I love that [King Supers] name. That is such a great name." — Ann, 05:40).

Summary Takeaway

The episode covers meaningful pivots — Meta’s pragmatic shift from Metaverse hype to AI, Kroger’s costly automation retreat, ongoing shakeouts in software, and the diverging fortunes of value vs. luxury retail. The underlying theme: adaptability and willingness to own up to failed bets mark the survivors in today’s rapidly shifting business landscape. This is punctuated by Ann’s sharp analysis and anecdotes, making the show essential listening for investors and business-minded listeners alike.