Brew Markets — "Trade School Stocks Defy AI & Urban Outfitters Beats Rent The Runway"

Date: August 29, 2025
Host: Ann Berry (A), with Producer John (C)
Podcast: Brew Markets (Morning Brew)

Overview: Episode Theme & Purpose

This episode explores the resilience of "trade school stocks" amid the rise of AI and innovative disruptions in the retail space. Ann Berry dives into how Urban Outfitters, via its Nuuly subscription arm, is outpacing competitor Rent the Runway, while examining whether hands-on, skilled trade professions offer a surprising hedge against AI-driven job automation. The episode also covers bellwether stocks’ economic signals, market movers, and the unique vulnerability of concentrated national economies like Denmark’s.

1. Urban Outfitters & Nuuly: Outperforming the Clothing Rental Market

Key Discussion Points

• Urban Outfitters Smashes Earnings

  • Brands Urban Outfitters, Anthropologie, and Free People revealed over $1.5B in sales last quarter, buoyed by Nuuly, the clothing rental subsidiary.
  • Nuuly now accounts for under 10% of Urban's business but shows stellar growth with over 350,000 subscribers, 50% revenue growth, and record profits.
    • Ann: “This chart, really steep, very impressive.” [00:45]

• Nuuly’s Winning Formula

  • Strategic marketing: Nuuly’s latest campaign targeted first-time renters and addressed the "nothing to wear" dilemma.
    • Frank Conforti, COO, notes: “66% of new subscribers indicated they had never rented.” [01:53]
  • Operations are expanding (Kansas City logistics to 1M+ sq ft).
  • Subscription model ($98/month) brings predictable, recurring revenue.

• Rent the Runway Falters

  • In contrast, Rent the Runway’s stock plummeted 99% over five years.
    • Ann: "Nuuly will, in my opinion, keep eating its lunch…” [02:57]
  • Urban leverages in-store inventories and strong cash reserves ($300M) to fuel Nuuly’s continued growth.

Notable Quotes & Moments

• “Nuuly is doing so well that it’s expanding its logistics operations in Kansas City…” [01:08]
• “The market loves one magic word in particular, and that is subscription.” [02:21]

2. Trade School Stocks: A 'Hedge' Against AI's Job Takeover?

Key Discussion Points

• AI Job Displacement: Reality vs Hype

  • Stanford’s "Canaries in the Coal Mine" study spotlights struggles for new college grads; companies pause hiring, fearing AI will soon outperform humans.
    • Ann: “Unemployment levels among new college grads…have been ticking upwards.” [05:00]

• Physical Trades Prove Resilient

  • Jobs like plumbing and HVAC (“physically intensive, highly skilled technical professions”) are unlikely to be replaced by AI soon.
  • Shortages of skilled technicians are driving up wages and making trade school training a lucrative pursuit.
    • Ann: “…they were amazing, but they were expensive. And it was clear that no amount of AI was going to be able to fix what these teams were able to fix…” [06:54]

• Investment Insight: Trade School Stocks

  • Lincoln Educational Services ($618M market cap) and Universal Technical Institute ($1.5B cap) see booming enrollment and lean, cost-effective operations.
    • John: “The share price for both of these schools is up 50% over the last year.” [08:18]
  • Five-year historical returns compare favorably to Big Tech:
    • Lincoln: up 140%; Google/Meta: up ~150%
    • Universal Technical: up 270% — “blowing away some of the big tech stocks…” [09:06]

• Ann’s “Cheeky” Investing Comparison

  • Ann's playful research highlighted that trade school stocks could match or outpace traditional AI giants in stock appreciation.

Notable Quotes & Moments

• Ann: “Where you invest your time, where you invest your talent, critically important. And we're going to talk about… where to invest your money.” [06:25]
• Ann: “…if you poke around and find some of these niches early enough, there are some really fantastic investment ideas that you can find.” [09:23]

3. Bellwether Stocks: Reading the Economic Herd

Key Discussion Points

• What Is a Bellwether?

  • Ann’s etymology lesson: The term comes from a castrated sheep that leads the flock with a bell.
    • Ann: “I love etymology. I can’t help myself.” [11:13]
  • In the market: Bellwether stocks are major, influential companies whose performance forecasts their sector or the wider economy.

• Examples & Influence

  • Alphabet, Microsoft: Tech bellwethers
  • JPMorgan Chase: Financial sector bellwether
  • Caterpillar (CAT): Construction and industrial activity
  • FedEx: Global economic activity
    • Ann: “FedEx serves over 220 countries and territories, which means it is absolutely everywhere… if you’re looking for insights into trade policy… FedEx has some window into it.” [12:31]
  • Ann personally watches FedEx earnings (next call on September 18) for signals on global trade, consumer strength, and business sentiment.

Notable Quotes & Moments

• Ann (playfully): “…the word bellwether dates back to the 15th century and refers to a castrated sheep. That’s the weather.” [11:18]
• John: “This is the only time I don’t want to be in the top 10.” (on radio jobs being at risk from AI) [10:44]

4. Quick Market Movers & Final Thoughts

Key Segments

• Markets Recap

  • S&P 500 hit all-time highs; anticipation builds for a Fed rate cut in September. [13:58]

• Stocks on the Move

  • Affirm: +13%, revenue up 33%, earnings nearly double forecasts. [14:19]
  • Nike restructuring: Laid off corporate staff; stock responds positively.
  • Pepsi/Celsius Holdings deal: Pepsi lifts stake to 11%, Celsius shares climb 5%. [14:48]

• Denmark’s Economic Concentration

  • Heavy reliance on Novo Nordisk led Denmark to halve its 2025 GDP growth outlook as the firm's sales slow.
    • Ann: “Denmark is so heavily dependent on the pharmaceutical business Novo Nordisk that it just halved its economic growth outlook…” [15:12]

• AI Risk to Broadcasters

  • Microsoft report flags broadcast announcers and DJs as the 10th most AI-vulnerable profession, prompting Ann and John to joke about job security. [10:32]

Engaging Moments & Humor

• Ann’s enthusiastic etymology deep dive and cheeky stock comparisons add freshness and personality throughout.
• Playful banter about AI threatening their own jobs, and the random fact that John once drove a city bus. [03:51]

Timestamps for Key Segments

• Urban Outfitters/Nuuly vs Rent the Runway: 00:03–03:30
• AI & Trade School Stocks: 04:29–10:44
• Bellwether Stock/Etymology: 10:57–13:37
• Market Movers & Denmark: 13:58–16:15

Memorable Quotes by Timestamp

• Ann: “Nuuly is doing so well that it’s expanding its logistics operations in Kansas City…” [01:08]
• Frank Conforti: “66% of new subscribers indicated they had never rented.” [01:53]
• Ann (trade school stocks): “If you poke around and find some of these niches early enough, there are some really fantastic investment ideas that you can find.” [09:23]
• Ann (bellwether definition): “…the word bellwether dates back to the 15th century and refers to a castrated sheep. That’s the weather.” [11:18]
• John: “This is the only time I don’t want to be in the top 10.” [10:44]

Summary for Listeners — Key Takeaways

• Urban Outfitters, via Nuuly, is out-innovating Rent the Runway by leveraging smart marketing, existing inventories, and the magic of subscriptions.
• Trade school stocks (Lincoln, UTI) are strong performers, challenging the AI narrative by capitalizing on skilled labor shortages.
• Bellwether stocks provide a "leading sheep" glimpse at economic direction, and quirky etymology enriches financial literacy.
• AI threatens some white-collar jobs (including broadcasters!), but hands-on trades and pragmatic niche investing offer promising alternatives and returns.
• Denmark’s GDP cuts illustrate the risk of over-reliance on a single industry or company.

Listeners come away with actionable insight: Diversify investment perspectives, embrace market niches, and never underestimate the economic impact of skilled trades or the origin of old financial terms.