Secured the last Costco pizza before the Food Court shut down
Hey Snackers,
Tom Cruise may be taking social distancing guidelines to a whole new level: Cruise will be working with NASA (and possibly SpaceX) to shoot a movie in (you guessed it) space — our suggested title: "Born on the Fourth of Jupiter's Rings."
The tech-focused Nasdaq made up all its 2020 losses and closed positive for the year, rising on the backs of Amazon, Apple, Alphabet, and Facebook.
Turn up the resistance... Lockdown orders have caused the number of crunches and mountain climbers done on living room floors to skyrocket. But since there are no Push-Up Mutual Funds or Burpee ETFs, we're looking at Peloton. The spin bike company's shares soared 16% Thursday to a record high as demand for its at-home fitness product exploded:
SoulCycle addicts have withdrawal... The corona-conomy brought Peloton new types of customers who wouldn't have considered buying before the pandemic. People who usually work out at studios or in group classes through their gym memberships caved under cabin fever:
Investors predicted this success... Peloton shares more than doubled in the past 1.5 months because investors eyed critical leading indicators. Lagging indicators (like Peloton's earnings report) tell us the result from the past, while leading indicators are more forward-looking. Take Peloton's 7-9 day normal shipping time — it increased to over a month, indicating surging demand, which translates to future sales boosts.
No more unlimited free samples... You know, because... germs. Maybe that's why Costco's sales fell for the first time since July 2009. The Disneyland of bulk retail, Costco represents more than just a store to be shopped — it's an experience to be lived. Let's re-live the past three months:
Blame the gas... Gas sales make up 11% of Costco's revenue. Too bad oil prices took a violent nosedive in April, even going negative at one point. On top of that plunge, Costco members were driving way less (and not filling the old tank as much). Costco blamed 70% of its April sales drop on low gas prices/demand.
Costco is about to face the budget question... In a recession, one of the first places people look to cut is fixed costs (like streaming subscriptions or cable). Unlike other retailers, Costco has subscription memberships (starting at $60/year) — in 2019 Costco had a ridiculously high 91% renewal rate. TBD if a corona recession will help or hurt that.
Miss the old Game Boy Advance... But Nintendo doesn't crush sales by getting nostalgic over an old console that flips closed like a mini laptop. Fun fact: Nintendo was founded as a playing card company back in 1889 — over a century later, the Japanese gaming giant still appears to be playing its cards right:
Good software drives hardware surges.... The hit success of Animal Crossing drove demand for Nintendo's Switch, which has been out for almost four years. For Nintendo, content is key to spurring sales of its console hardware. And Nintendo hit a goldmine with Animal Crossing — people are so into it that they're hiring interior designers for their island decor.
TBD whether the creative hits will continue... The surge in Switch sales was driven largely by Animal Crossing's success, but Nintendo reportedly doesn't have many new games in its pipeline. Nintendo even said it's predicting a fall in software sales this year because game developers can't come to the office. And unlike the other game consoles (Playstation and Xbox), Nintendo designs most of its own games (85% of them).
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Disclosure: Authors of this Snacks own shares of Sony and Amazon
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