Expect ‘Staggering’ Sales Figures From Some Consumer Businesses As Calendar Beats COVID Closures

Investors should expect other “staggering” sales figures from retailers in the coming weeks, amid a “strange” year in which the COVID-19 pandemic wreaked havoc on the retail and restaurant segments. retailer At Home Inc. HOME, -3.11% reported nearly 31% growth in same-store sales, and full-year comparable sales increased 19%.

LongHorn Steakhouse parent Darden Restaurants Inc. DRI, + 0.56% said sales at the same restaurant increased 23.2% during the week ending March 21. Dave & Buster’s Entertainment Inc. PLAY, + 1.23% said offset sales for 2020 plunged 70%. See: Dave & Buster’s recorded less than a third of revenue in 2020 compared to the previous year As consumer companies begin to overcome store closures, dining room restrictions and other measures taken during the COVID pandemic- 19 in 2020, comparable sales figures, or same-store sales, promise to be more unusual than many are used to seeing. Experts say that companies must provide context for these numbers in order to cast them in the right light, highlighting the anomalies at play and the fundamentals of the business. “The numbers are going to look big at first glance, but it‘s due to the terribly low numbers from a year ago,” said Mark Kalinowski of Kalinowski Equity Research. “Same-store sales at casual dining were all pretty negative in January and February, and March is weird. So if you’re looking at a single day, week, or month, you could be talking about wildly different numbers. “Plus: ‘Plexiglass will stay on for a while’ – Shoppers Still Concerned About COVID, But Back to Stores Sales Index of casual dining in the same stores in the first quarter of Kalinowski, which analyzes comparable sales for this segment in January, February and the first half of March, estimates a 1.2% drop in same-store sales. “Our figures Implicit for January, February, and all of March are roughly -19%, -20%, and + 45%, respectively, ”the report says. Experts MarketWatch spoke to, including Kalinowski, say the best comparison is 2019, before pandemic. Some companies have already said they would take that approach. “While we are starting the year with more challenges than two years ago, due to the continued impact of COVID-19 in stores, we believe this is the correct comparison and measurement. as for our business performance, “said Francis Conforti, Urban’s chief operating officer. Outfitters Inc. URBN, + 1.63%, during the company’s fourth-quarter earnings call last month, according to FactSet. And: 80,000 retail stores are expected to close in the next 5 years, leaving room to reinvent those that remain Brian Yarbrough, consumer discretionary analyst at Edward Jones, who also says looking at pre-pandemic numbers is a better way to analyze a business. at this time. , raises a couple more questions about 2021 that investors should consider. The beginning of the year has a unique benefit for many consumer companies: stimulus money being pumped into bank accounts, driving spending. And what will happen to the beneficiaries of the pandemic, such as Walmart Inc. WMT, + 0.15% and Home Depot Inc. HD, -0.33%, when things return to normal and spending returns to travel and other leisure activities. “The pendulum probably swung too much in terms of benefit for those who stayed open, and too negative for those who closed,” he said. Companies whose shares are selling “in multiples well above historical levels will not hold and you will see some pressure on stocks.” In general, he forecasts volatility in the short term, although he believes there will be a stifled demand. And since Edward Jones tends to look long-term, he thinks things will tend to favor retailers later on. “We will see more bankruptcies and mall closures that will benefit those who invest in digital,” he said. Don’t Miss: Dick’s Sporting Goods Launches Concept Store As Competition Increases With Nike And Other Big Brands Nikki Baird, Vice President Of Retail Innovation At Aptos, An Enterprise Retail Technology Provider, Says She Has Seen Over 2,000% Comparisons . Some retailers are going through periods where sales fell to zero. “There will be some amazing numbers,” he said. Baird tells clients to be prepared to tackle tough issues. “Investors should back off and retailers should wait for the question: how much of this is a one-time increase? This is not the same situation you will face next year. How do you take this year’s results and the right size in 2022? “Supermarkets have already begun to prepare for a time when consumers will spend less time in the kitchen with investments in fast food and spending to help customers maintain their ‘love of eating at home,’ he says. fashion retailers, Baird suggests that companies look for comparable sales at the zip or regional code level rather than at the individual store level, which takes into account all activity at a location, including online sales and other factors. ” A lot of people will view 2021 as a strange year as people come out of a pandemic, ”he said.“ If you frame 2021 as a benchmark and take it and run it, there will be skepticism. ”As we move from 2020 to 2021 , Baird says that retail traded one unpredictable set of circumstances for another. “The uncertainty a year ago was about the pandemic. Now, these consumer habits are the biggest uncertainty as new releases are released. shots and things reopen. ”