Direct-to-consumer sales naturally decrease when consumers have less disposable income and cost leaders gain market share... Most of the time.
With stimulus checks encouraging spending in consumers and “stay home” restrictions present in most urban areas, free cash flow is seemingly consolidating in the accounts receivable of just a few companies. Since this is a stock-focused platform, we’re going to look at the stock price gain from March 11, 2020 (the day that COVID-19 was declared a global pandemic) to market close, November 4, 2020.
Continue reading to find out who these three brands are and exactly how they’re maintaining their growth trajectory amidst a global pandemic and recession…
Activision Blizzard (NASDAQ: ATVI)
Perhaps the least surprising inclusion on this list, the video game holding company responsible for popular esports titles such as Call of Duty and Overwatch, has been experiencing rapid growth since March. With consumers stuck at home and many hobbies put on hold, video games have become one of the most common household staples of young people all over the world.
Call of Duty itself was considered a declining franchise as player numbers dropped year-over-year between 2014 and 2019; however, the introduction of the battle royale component, “Warzone”, helped the title climb back up to one of the most popular video games currently around. Opting to emulate Fortnite’s success by introducing a free-to-play base game with in-game transactions has resulted in wild success for the brand over this year.
ATVI has risen 33.78% since March 11, 2020, achieving a stock price of US $79.37.
Peloton (NASDAQ: PTON)
Not all who are stuck at home wish to remain dormant. For consumers looking to purchase at-home exercise equipment back when the pandemic was first introducing a ‘new normal’, dumbbells were as hard to track down as hand sanitizer. Peloton, a company that has made headlines (for better and for worse) throughout this year with their exercise bikes, has massively capitalized on consumer need to keep active, without being able to go outside.
As gyms closed, Peloton sales went up, proving that consumers are willing to spend massive premiums to stay active and keep off pandemic pounds. As each PTON user must pay $2,300 annually to use the technology platform connected to their physical bikes, the company has benefited from hesitance to return to public gyms, thus lowering their churn rate and establishing a dedicated customer base.
PTON has risen 439.09% since March 11, 2020, achieving a stock price of US $118.60.
Yeti Holdings Corp. (NYSE: YETI)
YETI is, perhaps, the most mind-boggling company on this list. The lifestyle brand chiefly produces coolers and drinkware and, prior to the pandemic, drove most of its sales through physical retail locations. After switching to a direct-to-consumer model, utilizing eCommerce as the primary sales channel, the company experienced incredible growth. Consumers looking for a taste of luxury to accompany their outdoor leisure activities are usually first introduced to the brand through online influencers, as YETI has positioned itself as a fashionable, millennial-focused staple.
The Texas-based drinkware company has been able to capitalize on the new wave of nature explorers being borne out of pandemic necessity. These are typically urban-dwelling, sustainably-minded consumers who desire the comforts of city life while they get out into nature in a greater capacity.
YETI has risen 118.72% since March 11, 2020, achieving a stock price of US $51.42.