“This year, some brands have taken the opportunity to strengthen relationships with their consumers by offering online experiences, in which consumers told us that they crave and miss experiences. This helped brands like Nike offset sales weakness caused by closed stores around the globe due to the pandemic. The retailer offered free workout classes through its app, gaining new followers and thus, converting those visits into digital sales. Lululemon is now also attempting the same with its acquisition of Mirror, a fitness start-up. With consumers ‘nesting’ at home, this has substantially accelerated the pace and shift to online shopping, which is evident as retailers reported strong digital sales in Q1 2020,” explains, Jharonne Martis, Director of Consumer Research, Refinitiv.
Q2 2020 hedge fund letters, conferences and more
Looking forward to anticipated Q2 performance, we used StarMine’s Smart Estimate to determine which companies in the Refinitiv Retail and Restaurant Index are better poised to continue beating earnings estimates. The results tell us that there is a nesting theme in consumer purchasing patterns.
Mohnish Pabrai’s flagship hedge fund returned – 15.1% during the first half of 2020, according to a copy of its second-quarter investor letter, which ValueWalk has been able to review. That compares to a performance of +12.7% for the NASDAQ, -3.1% for the S&P 500 and -8.4% for the Dow Jones Industrial Average over the Read More
E-Commerce Skyrockets as Consumers ‘Nest’ At Home
- DIY Home Improvement outpaces other retail groups and continues to post robust SSS
- Home Depot leveraged e-commerce platform noting an increase of 80% in online sales
- Working from homes has caused home office equipment and mattress purchases to surge at stores like Lovesac, Tempur Sealy, Wayfair and Williams Sonoma
- Lovesac consistently has the strongest SSS results, posting 50% SSS in 20Q1
- Tempur Sealy’s revenue spiked 19.03% and saw a record 148.15% growth in earnings in 20Q1
- Health and Wellness: Consumers have largely purchased exercise equipment while in quarantine
- Dick’s Sporting Goods’ e-commerce sales, including curbside pick-up, increased by 210%
- Take-out & Food Delivery: While most restaurants have suffered from weak sales during the pandemic, Papa John’s, Domino Pizza and Wingstop are expected to post robust SSS
- Analysts polled at Refinitiv are bullish on these companies and earnings are from sustainable sources
“Consumers buying patterns show a nesting theme and their strong cravings for experiences has allowed some brands to capitalize on digital experiences, which translates to strong sales,” concludes, Jharonne Martis.
Read the full report here.
