__No more unlimited free samples...__ You know, because... germs. Maybe that's why __[Costco](https://robinhood.com/stocks/COST)__'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:

- __February sales jumped 12%:__ 'Twas the beginning of the lockdown panic — shoppers flocked to Costco for boatloads of food and cleaning supplies, flashing membership cards like pandemic status symbols.
- __March sales spiked 10%:__ People who didn't panic hoard in Feb started panic hoarding — the Feb panic hoarders had to restock Kirkland bacon. Also, [TP panic](https://snacks.robinhood.com/newsletters/1lDDrudmsmZqlefmRUywxS/articles/2Ldz75Us2KdusEsPlkc8lm) took hold. 
- __April sales fell 5%:__ Thanks to strict stay-at-home orders and scaled back service in areas like the Costco food court (no more deliciously greasy pizza and impossibly long churros). But one item really hurt April's numbers...


__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](https://snacks.robinhood.com/newsletters/3Q7KEWCIGgm4NA6zYBCUa0/articles/581oe4aDAiPbPtcdsz1vzh/) 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. 

_Secured the last Costco pizza before the Food Court shut down_

Shop

__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. 

Costco sales fall for first time in a decade — here's why April was different

__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](https://robinhood.com/stocks/PTON)__. The spin bike company's shares soared 16% Thursday to a record high as demand for its at-home fitness product exploded:

- __Sales up +66%:__ Its $2.2K spin bikes and $4.3K treadmills rode off shelves — and then you pay $39/month to stream classes. A shocking 176K are subscribed to the app without Peloton hardware (aka, DIY Peloton bike on iPad — or one of its other workouts). 
- __But, a loss:__ Peloton boosted its sales forecast for the year on all those endorphins, but still posted a $56M loss last quarter.

__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:

- __+94%:__ Paid subscribers nearly 2X'd since last year to [886K](https://www.wsj.com/articles/peloton-gains-as-consumers-work-out-at-home-11588801735). A record 23K people streamed Peloton's largest class ever. 
- __44M:__ Peloton logged a record-shattering 44M workouts in the quarter (490K workouts per day on average), up from 24M in the December quarter.


_Trying to resist the Peloton craze_

Ride

__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.

Peloton sales surge on booming corona-conomy demand

__Miss the old Game Boy Advance...__ But __[Nintendo](https://robinhood.com/stocks/NTDOY)__ 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:

- __Annual profit soared 41%__ from a year ago to __$3.3B__, Nintendo's [biggest](https://www.cnn.com/2020/05/07/tech/nintendo-earnings-intl-hnk/index.html) surge in nine years.
- __Nintendo Switch sales jumped 34%__ compared to a year ago — it even recently [sold out](https://www.cnn.com/2020/05/07/tech/nintendo-earnings-intl-hnk/index.html) on several websites, despite the fact that it was released in 2017 (and is suffering production delays).
- __Nintendo's Animal Crossing: New Horizons__ game became the fastest selling title ever on Switch. Apparently lots of people wish they were on some colorful, animal-filled, pandemic-free island somewhere. 

__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](https://www.newser.com/story/290538/animal-crossing-interior-designers-offered-50-an-hour.html) for their island decor.





_When Bank of Nook cuts interest rates on savings_

Play

__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](https://www.reuters.com/article/us-nintendo-results/after-the-triumph-of-animal-crossing-a-thin-pipeline-for-nintendo-idUSKBN22J0UG) 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). 

Costco sales fall for first time in a decade — here's why April was different

Get Your News

Subscribe and thrive