Forget the Pumpkin Spice. The season we’re focusing on right now has nothing to do with changing leaves and everything to do with corporate earnings.
In our second newsletter about Earnings Season, we’ll be talking about we use earnings reports to spot new or growing trends early, so you can use these tricks to get some treats for yourself.
📰 In the Headlines
Translating some of this week's biggest stories
Translation: The new content streaming platform Quibi is shutting down after only 6 months
Quibi was a new type content streaming platform with shows of 7-9 minute episodes, perfect for watching on your phone on a subway commute or in line at Trader Joes. The founders are blaming the platforms failure on the coronavirus, but many think this might be an early sign that the market of streaming platforms is getting too crowded.
Translation: People are shopping less right now
Don't let the word 'comfort' mislead you, things are definitely feeling awkward right now. Until people have a better idea of who will be running America for the next four years, they are slowing down on those online shopping sprees and big life purchases.
Translation: The stock market is going to be jumping around until we know what will be in the next stimulus package
A lot of companies are relying on the next stimulus package for some extra funding to hold them over during these troubling time. Until we know whether that extra cash will be coming, expect to see the stock market resemble your heart rate when you get that "Can we talk?" text.
🕵️♂️ Trend Detective
Earnings season is such a big deal because investors like being able to predict how people will be spending their money. There are people in the world of finance whose entire job is dedicated to spotting these trends early.
You don't need an MBA or a bunch of complicated algorithms to be good at spotting trends. In fact, sometimes it just takes some common sense and a lot of paying attention.
To show you how, here are some trends we are seeing coming out of this earnings season, along with two or three of the companies behind it.
The Trend: Heading Outdoors ⛰
After months of being stuck indoors during COVID lockdowns, Americans are jumping at the chance for some new scenery and fresh air. The summer boating and camping seasons are coming to a close, winter activities like hitting the mountains are expecting to get a lift.
- Winnebago Motor Homes - Sales rose 14.9% for motorhomes and 34.4% for towables
- Vail Ski Resorts - Sold 24% more annual passes than last year in September
The Trend: Eating In 🍜
With restaurants reopening all over the U.S, many thought the surges in takeout and grocery would start to taper off. Surprisingly, spending patterns are showing that people are still opting to eat in.
- Chipotle - Online orders have nearly tripled since the pandemic started
- Albertsons - Grocery stores keeping seeing bigger totals on the average receipt
- HelloFresh - Made about $100 million more than they were expecting this quarter
The Trend: Keeping House 🧺
As more people reckon with working from home and remote school will look like long-term, they are investing in home appliances and organization to make sure they are set up for success. Also, for those of you quarantining alone, what's the harm in little getting a little robotic vacuum buddy to keep you company?
- iRobot - Have made$70 million this year, but only $5 million last year
- Whirlpool - Beat their revenue expectations four quarters in a row
- The Container Store - Is about to release their colab with Marie Kondo
Have you noticed any trends from this earnings season?
Let me know what patters you saw in the recent round of earnings reports, and we'll keep you updated on which of these trends actually live up to early hype.
Word of the Day
Blue Chip Stock
(n.) An informal category of stocks for a well known-company' with a long history of preforming well.
Blue chip stocks are popular with first-time investors because of their name recognition and history make them look like safe bets.
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