As the Economy Reopens, Companies Comment on May Trends

We’re halfway through Q2 and different regions of the world are lifting lockdown measures at different rates. With conference season now in full swing, companies are beginning to reveal the patterns they’re seeing in May data.

Is recovery imminent with reduced stay-at-home measures? And how are different industries being impacted as more of the world loosens restrictions? Learn more about how companies are describing trends they’re seeing in May below.

 

Takeaways:

• Xiaomi on smartphones in Europe: as of the third week of May, the activations in Europe had returned to over 90% of the daily average in January
• Air Products and Chemicals on China: We see that in the month of May, China has gone back to normal
• Lowe’s: For May month-to-date, U.S. comp sales have been trending at or above April results with strong double-digit comps across all geographic regions
• Zynga: But as you move through April and into early May, we started to see a return from some of the brand advertising
• HCA on inpatient surgeries: In the last 2 weeks, they were down just a little more than 30%, and in the first week of May, down around 20%
• PulteGroup: we had nearly a fourfold increase in sign-ups as we move from the end of March when the COVID-19 impact started to where we ended the first full week of May
• Zimmer Biomet on China: we went from doing about 25% of normal run rate to almost 75% or 80% of run rate. So pretty massive recovery in just the 2-month period. We’re continuing to see that positive trend through the early part of May
• IQIYI on retention: entering into April and May, we have seen that the time spent for both free users and membership have been on a declining trends

AlphaSense picks up on nuances in human language found in SEC filings, event transcripts and thousands of premium business content sources. Monitor market trends, industries, and watchlists in real-time with the power of AI. Start your free trial of AlphaSense now or login to your account.

 

Information Technology

Q1 2020 Xiaomi Corp Earnings Call – 5/20

For example, if you look at the number of daily smartphone activations each week, as of the third week of May, the activations in Europe had returned to over 90% of the daily average in January.

We plotted the weekly activation trends across all key international markets. And the third week of May in Europe, as previously mentioned, smartphone activations had returned to over 90% of the prepandemic level.

In Southeast Asia and the Middle East, smartphone activations have actually surpassed the prepandemic level.

Q1 2020 Wix.Com Ltd Earnings Call – 5/14

Answer – Avishai Abrahami: Well, as I said, for — currently, we don’t see anything decreasing. And in fact, we’re seeing some positive changes, even stronger. I think that most of the world is still in the same spot, right, because they’re in isolation so I wouldn’t expect to see any change. And I do believe that this change is probably going to take us much further in May.

Mastercard Inc – JPMorgan Technology, Media and Communications Conference – 5/14

And essentially, if you put it all together, every week in March was slower than the prior week. We entered April, therefore, at the bottom of that run of March. The first 2 weeks of April were like the last week of March, broadly. Okay. I do that at a very high level. The next 2 weeks of April were an improvement over the first 2 weeks. So the latter fortnight was better. And what you’re seeing is that improving trend has sustained itself through the first 2 weeks of May. Essentially the data that we put out there, it is true across the world. There seems to be a bigger bounce in the United States right now than there is in the rest of the world, and you can speculate why that is. And probably part of it is something to do with stimulus checks in addition to the beginnings of reopening. But essentially, that’s the way the numbers are looking for transactions.

Zynga Inc – JPMorgan Technology, Media and Communications Conference – 5/13

But as you move through April and into early May, we started to see a return from some of the brand advertising because one of the best ways to reach folks right now is through a game. And also, if you look at the degree of advertising inside gaming networks, you’re right, there are a lot of interactive products sold within other interactive products. It’s hard to pin a percentage on it right now, but we are seeing a good broad-based set of advertisers return to Words With Friends as an example.

Now one of the ways that the decline in advertising CPMs was offset was the gains in audience. If you’re playing 4 hours a day instead of 3 hours a day, you’re seeing more ad impressions, obviously. So some of that was a mitigating circumstance. And as we see the second half unfolding, advertising is still going to be a very good business for us. It’s tough to say whether it’s going to be slightly up, flat or down. But from a positioning standpoint, we like the trends that we’re seeing in late April and early May.

Fidelity National Information Services Inc – JPMorgan Technology, Media and Communications Conference – 5/13

Answer – Gary Adam Norcross: Yes. Well, look, it’s a — it’s probably too — it’s a little probably too early to predict what a recovery would look like and the timing of the recovery would look like. But what I would tell you is, certainly, what we’re seeing, obviously, just like a lot of people, very focused on the health and safety of our colleagues, very focused on our clients and very focused on the delivery, also — but also seeing trends of improvement, right? As we see shelter-in-place get lifted around the country, we’re seeing transaction volumes improve. We talked about this. I mean Woody even said, coming out of April is probably going to be our low-water mark, and I think that’s accurate. I mean you’ve seen that continue to progress in the back weeks of the month of April and continuing to improve through May. And given the fact of where things are going and as these shelter-in-place rules keep arising, I think you’ll continue to see positive trends from the economy and transaction growth coming through May and coming through June.

PayPal Holdings Inc – JPMorgan Technology, Media and Communications Conference – 5/12

Answer – John D. Rainey: Sure. Sure. So our guidance was for revenue growth of approximately 15%. And that was different than what we’ve normally done. We normally provide a range, but we really just trying to give it our best guess. And that assumption is that, as we go through the quarter, will decline from some of the trends we saw in April where we had 20% revenue growth, as shelter-in-place measures are relaxed and people are able to go back to some of the shared experiences or social experiences in store.

The EPS guidance that we provided was for 15% to 20%. And that range is partly dependent on our ability to invest in the quarter on things like QR code and how much we can do in the last 2 months that we have in the quarter.

It’s — I underscore, it’s exceedingly difficult to forecast right now because you’re actually having to make some assumption around what happens with coronavirus, the path of it, the duration of it. Does it rear its head after social distancing is relaxed? And so that’s a challenge. Certainly, if the trends in April continue — and the first part of May is encouraging, but if those trends continue, they never could be better than that. But it’s tough to say.

 

Industrials

Q1 2020 ZTO Express (Cayman) Inc Earnings Call – 5/21

Second question, in April and May, the increase in the e-commerce, the trend is very positive, up 23% and then 32% increase year-over-year. What we saw in May is also potentially going to be a faster growth than the previous couple of months. ZTO, consequently, would also achieve and follow such trend, if not exceeding it. Thank you for your question.

Johnson Controls International PLC – Wolfe Research Global Transportation Conference – 5/21

Answer – George R. Oliver: Yes. I’d start by saying that we plan conservatively. Clearly, visibility is somewhat limited, although getting better every day. As I mentioned in our earnings call, our orders in April were down roughly high teens, 20%. And then given limited access to some of our customers as far as the revenue turn, which we did expect to see in April, will be the toughest month within our field businesses.

So what I’d say is we started to see improvement as the month went on at the end of April, getting access to our customers’ facilities as they started to open up. And we’ve seen that trend continue here in May. I would go back to China where this all started. And what I would share with you there, although we began the recovery in March, as we look at April and May, we’re getting back to almost 90-plus percent within our — not only the customer activity, but also our ability to be able to operate our facilities. We have 2 of our major facilities there in China. And then our supply chain is operating now 90-plus percent.

So I would expect that as you go around the world and as this spread around the world, we’re going to start to see similar type activity. If you look at EMEALA, we are starting to see sites opening up as the lockdowns are lifted. As you look at the U.S., what I would say is that is — as we’re opening up and customers are coming back to work and sites are being opened, we are seeing improvement on a day-to-day basis.

What I would say, the hardest-hit area is in the Northeast, and that’s where we’ve seen the — it’s been the slowest recovery here as things are beginning to open up. But overall, I think that April will be the toughest month. Third quarter will be the toughest quarter. And then I think sequentially, we are going to start to see improvement as the months go on here through the second half.

XPO Logistics Inc – Wolfe Research Global Transportation & Industrials Conference – 5/20

Answer – Bradley S. Jacobs: Okay. Sure. First of all, thanks for the invitation. Love to be here. Appreciate it. The trends are pretty much the same, Scott. April was the bottom, assuming there’s no second wave. May is less bad than April was. Geographically, it’s the same. Asia is almost back to normal. In Europe, France has come back sharply, still not where it was, but it’s come back sharply off the bottom. Spain after that, U.K. after that. And then we’re — U.S. at the end there. U.S., you see some signs of some green shoots, but it’s not a real robust rebound, but it certainly stabilized and hasn’t gone to get any worse.

Stanley Black & Decker Inc – JPMorgan Homebuilding & Building Products Conference – 5/19

Answer – Donald Allan: Yes. So we definitely see that low double-digit trend continuing with POS and U.S. retail. And we now have 6 weeks of POS because we haven’t quite — we haven’t gotten last weeks yet. But we’ll get that today or tomorrow. But the trends continue to be in line with that.

Johnson Controls International PLC – Goldman Sachs Industrials & Materials Conference – 5/15

Answer – George R. Oliver: At this stage, I think Europe was shut down. The shutdown in Europe was much broader initially in April. That’s starting to come back, so we’re watching that closely. I would say in North America that we were deemed essential everywhere we do business, but depending on the shutdowns is what limited our ability to be able to perform the service. I’d say North America is a little bit better than what we saw in the month of April than we saw in Europe. And so I think as the lockdowns get lifted, as we get back to work and the access to these facilities become more accessible, then we’re going to see a similar trend, I believe, in Europe and North America.

3M Co – Goldman Sachs Industrials & Materials Conference – 5/14

Answer – Nicholas C. Gangestad: Yes. What we were seeing in Japan, our Transportation and Electronics business, we’re seeing noticeable declines there. We were also seeing declines in our Safety and Industrial business. In fact, we were — and Health Care, as elective procedures are being delayed or canceled in Japan as they are in much of the world. Those are all trends that we were seeing in Japan in April and continuing into May. So I wouldn’t say there’s anything in particular going on, any particular message there of something in Japan. I’d say it’s a reflection of what we’re seeing in much of the world.

 

Healthcare

Zimmer Biomet Holdings Inc – UBS Global Healthcare Conference – 5/19

We expect May to be at similar to April or better. And what we were trying to do with that comment was kind of say that April is the floor, we don’t expect it to get worse than April, right? So the deepest part of the trough we believe is behind us. And from there, we should see some improvement into May, trend into June and then, of course, into Q3 and Q4, provide some broad shaping. But at that point and at this point, that was the best that we could do because there’s still a lot of uncertainty. Now where we are through May, early part of May is the leading indicators we’re seeing continue to give us confidence that, that overall trajectory we provide is still very much intact, and we’re seeing a lot of really good positive proof points. We don’t want to overreact to 1 or 2 weeks because there still remains a lot of uncertainty, which I can go through. But we are seeing some pockets or some signals that we were — as leading indicators that we were hoping for. So let me go through those.

In China, we’re seeing a really rapid be here from a recovery standpoint. Within 2 months of the deepest trough to where we sort of exited May and kind of began — or sorry, exited April and began May, we went from doing about 25% of normal run rate to almost 75% or 80% of run rate. So pretty massive recovery in just the 2-month period. We’re continuing to see that positive trend through the early part of May.

Encompass Health Corp – UBS Global Healthcare Conference – 5/19

Answer – Mark J. Tarr: Yes. Good morning, and welcome, everyone. This is Mark. I’ll take a first shot at this. And yes, we filed the 8-K this morning that shows our volume trends in our operating segments. And I think if you had a chance to take a look at it, you’ve seen that where we certainly ended February strong, went into March strong. Second half of March started to decline. We saw a bottoming, the downward trend in both of our segments in April. And then we’ve had a nice trajectory coming back up through April and then so far into May. So we feel very positive about the way the trends are growing now and the fundamentals of our business going forward.

Straumann Holding AG Acts Rapidly to Align Costs with Lower Revenues Call – 5/14

Question – Michael Klaus Jungling: Okay. Great. And then please check up on a previous question I asked on the last earnings call. Is it still reasonable to assume that Straumann will have an EBITA profit in the first half? Is that still something that the organization feels comfortable with?

Answer – Peter Hackel: Peter speaking, Michael. Yes, I feel comfortable with that decision. Also, obviously, we don’t have visibility — full visibility on May and June yet, but I feel comfortable with that assumption. Yes.

Answer – Guillaume Daniellot: And what we can say with what we have seen with mid-May, yes, it has confirmed that trend.

Exact Sciences Corp – Bank of America Merrill Lynch Healthcare Conference – 5/13

When you look into April, that decline accelerated in the first 20 days or so of April. Year-over-year declines were 63%. And as Kevin said, things started to pick back up. And why this is so exciting is that our reps are out of the field. And for the most part, most physician office visits are not happening today. In the back 10 days of April, our Cologuard order volumes were improving, down just over 45% in the back 10 days. We’ve had positive trends in May and those continue up through today. In fact, if you look at last week in total, relative to the low week of April, our order volumes on the Cologuard side are up over 60%. And again, this is without our reps back in the field. So this is in part due to people starting to realize, look, we’ve got to move on here with our lives. Cancer doesn’t stop. It’s also in part due to the quick actions our team has taken such as staying up with a telehealth site that has helped us start to drive the business to a better spot. I think this is where the business has really transformed. And longer term, we’ll be better off for it.

Universal Health Services Inc – Bank of America Merrill Lynch Healthcare Conference – 5/12

Answer – Steve G. Filton: Yes. I mean so we’ve actually — in our 10-Q, we gave a little bit of that information on our earnings call. At the end of April, we gave, I think, in a little bit more detail in the 10-Q. I mean, I think roughly the trajectory in both businesses had been — we clearly saw this fairly dramatic decline in volumes in the last 2 weeks in March that continued into the early part of April. And then by mid-April, the end of April, both businesses started to stabilize and, in some cases, improve. I think on the acute care business, aided by the fact that at least in early May, some of that elective and surgical sort of procedures that have been delayed and deferred are coming back. That’s not so much of an impact on the behavioral business. But I think we’re seeing the behavioral business start to at least see a rebound trajectory. We’re certainly not back to normal, but we’re seeing that rebound trajectory.

HCA Healthcare Inc – Bank of America Merrill Lynch Healthcare Conference – 5/12

We’re seeing that and other statistics that we shared about as well. Recall we talked about inpatient surgeries were down about 50% in the first 2 weeks of April. In the last 2 weeks, they were down just a little more than 30%, and in the first week of May, down around 20%. So we’re — again, another indicator that we’re starting to see some of that volume come back. How quick, how long it lasts are clearly unknown.

Outpatient surgeries, if you recall, was an important statistic. In the first couple of weeks of April, we were down about 70% when you combine both our hospital-based and ambulatory surgery. We’ve started to see that come back. Our hospital-based outpatient surgeries were down about 50% the last couple of weeks of April, and we’re hovering on the hospital side just under 20% right now. Our ASD volumes are probably hovering around 40% to — 35% to 40% of their historical trend in early May. So we think what we had anticipated is that the recovery period or the restart period would begin towards the latter part of the quarter — is beginning to happen. We’re still early in that stage. So how quick and how much of that lost volume can be recaptured are still unknowns, but we think we’re starting to see at least some signs of that volume return to us.

 

Consumer Discretionary 

Q1 2021 Best Buy Co Inc Earnings Call – 5/21

While we continue to see heightened demand for these products, we materially changed our operating model and therefore we began to experience overall revenue declines. As a result, in the first 3 weeks of the new model, from March 21 to April 11, revenue declined approximately 30% compared to last year. In the last 3 weeks of the quarter, from April 12 through May 2, sales trends improved as stimulus funding began to circulate. As a result, during that time period, revenue declined approximately 8% compared to last year.

Q1 2020 Lowe’s Companies Inc Earnings Call – 5/20

The strong broad-based trends that we saw in April have continued into May with strength across both DIY and Pro and across nearly all merchandising categories and all geographies. For May month-to-date, U.S. comp sales have been trending at or above April results with strong double-digit comps across all geographic regions. Gross margin was 33.1% of sales in the first quarter, an increase of 164 basis points compared to Q1 of LY. Gross margin rate improved 110 basis points driven both by the actions that we took last year to lower product cost and improve our pricing and promotional performance as well as a 40 basis point benefit from lower promotional activities throughout the quarter.

PulteGroup Inc – JPMorgan Homebuilding & Building Products Conference – 5/19

I would highlight the fact that we did put out a release on May 11, where we provided some additional commentary around our results in April as well as into the first week of May. And it was really encouraging. What we highlighted is that we had nearly a fourfold increase in sign-ups as we move from the end of March when the COVID-19 impact started to where we ended the first full week of May. And we were incredibly encouraged by not only what we were seeing on our digital platforms, but also what we were seeing in our sales offices with physical traffic as the majority of our sales offices have now resumed regular walk-in traffic in addition to appointments.

And then further, the update that I provide today, Mike, is that strength, we’ve seen continue all the way through May. So just as we saw week-over-week increases as we move through April, we’ve seen that trend continue into May. And so we’re quite encouraged by the resiliency of the economy and the resiliency of the homebuyer. 

Q1 2020 Draftkings Inc Earnings Call – 5/15

Answer – Jason Robins: Yes, so I think really it has been a continuation of what we have been seeing in April. I think that there are some things that vary based on seasonality in sports, but iGaming is actually remarkably consistent throughout the year. So I think that really it has kind of been similar to what we’ve been seeing in April.

 

Communication Services

IQIYI Inc Earnings Call – 5/19

Answer – Dahlia Wei: [Interpreted] Eddie, thank you for your question. Yes, you are correct that entering into April and May, we have seen that the time spent for both free users and membership have been on a declining trend, although on average per capita level, the time spent doesn’t decline that much but total time spent is declining. Also for our membership, the retention rate has some impact as well. And as a result, the net number or the net adds number is — also have some negative impact. Thank you.

Q1 2020 Scout24 AG Earnings Call – 5/14

Answer – Dirk Schmelzer: Okay. Thanks very much, Miriam, and welcome back. First of all, with regards to the deferral in May, we see the same trends that we basically saw in April with around about a not material figure of our overall customer base of 10% to 15% making use of the deferral program. And we see that across the board. We see that on residential sale as well as on commercial.

And to your second question on the revenue impact. To be honest, we have been positively surprised by our ability to cope with the originally outlined revenue impact that we saw of between EUR 8 million and EUR 10 million. So in April, stand-alone, we only saw EUR 4 million flowing through, and that is due to a mix of effects. First of all, free listings. Although free for 30 days, still more than 15% of our customers made use of payment options in the free listing space. The second piece is we managed to compensate some of the lost revenues by what Tobi just mentioned with memberships on rent, which were existing already with potential people looking out for a new apartment. But what we also see now is memberships on the landlord side increasing. And with that, we were able to compensate for the revenue loss of free listings. And certainly, we also plan to continue with that into May because we see those figures accelerating and also playing into our strategy of delivering realtor leads to our customers. And the more listings we have on the platform, the more we are able to deliver realtor leads to our real estate customers.

 

Materials 

Q1 2020 PETRONAS Chemicals Group Bhd Earnings Call – 5/20

Answer – Rashidah Binti Alias: Correct. I — Alex, so yes. Thank you, Datuk. Alex, so for April, we do see — in our observation, we do see that the market prices for April kind of like bottom, as you rightly pointed out, we see a heavy impact in April. I’m quite sure you’re very well aware as well. If you follow the market trend of the product prices. However, starting from May, we are seeing some recovery in terms of the prices. Cautious recovery though, but we do see some pickup in terms of the market price, starting from May, which is why I think we are hoping or rather, we are seeing that we have probably passed the point of the lowest point of COVID, provided there is no second wave, yes. So we have probably passed the worst point of COVID, and the market is demonstrating some recovery from May onwards. Volume is not affected. That’s what we’ll talk about it in your second question when he talks about contract cancellations. But so far, volume has not been a fact that very similar to quarter 1 with all the efforts that we have put in. So with that, I think when it comes to quarter 2, let’s see how it goes, but you can see that the market is lower compared to quarter 1. Like I said, volume is not affected.

Air Products and Chemicals Inc – Goldman Sachs Industrials & Materials Conference – 5/15

Answer – Seifollah Ghasemi: Sure. As we said, we usually don’t get into that detail in the middle of a quarter, but I understand these are different circumstances and the investors are very focused on that. So I’ll be happy to give you an update. On the 25th of April, we told people that the way we see things is that in — during the month of April, up to that time, our business in China was back to pre-crisis level and actually, with some of the products we are ahead of last year. That has — is still is the case. We see that in the month of May, China has gone back to normal. Our people are going to their offices. Our customers are taking the product. And still, as I said, they are back to normal levels and actually some products higher.

Dupont De Nemours Inc – Goldman Sachs Industrials & Materials Conference – 5/14

And then, interestingly, I don’t know the rest of the world as it comes back will be exactly like China, but China rolled back pretty nicely here. We were down in the first quarter in China organically about 1%, which I was actually pleasantly surprised by that. I thought the first quarter would be down a little bit more because of the shutdown for a few extra weeks that occurred there. But anyway, in aggregate, we ended up down 1%. And in the April, the month of April, on the core DuPont businesses, we were up kind of 6%, 7% organically. So we saw a really nice comeback there.

So kind of high level, that’s what we’re seeing. We expect those trends to continue through the month of May. June is still a little bit fuzzier. We don’t see the order book as clearly in some of our businesses. But again, I don’t think it would get any worse than kind of a 15% down range.

 

Utilities

Port of LA – Wolfe Research Global Transportation & Industrials Conference – Rail Shipper Panel – 5/20

Answer – Christopher Chase: Sure, sure. Yes, April turned out to be pretty good, but that was a little bit of false hope because that was really cargo bed had been pent-up because of the closures in Asia. We actually — year-over-year, April, in terms of import, loaded containers was a little bit higher than the year previous.

That being said, most other metrics were down significantly. And that, like I said, it was a little bit of false hope because we’re looking at probably somewhere north of 30% year-over-year decline for April. I’m sorry, for May.