5 Industries That Boomed During The COVID Pandemic

Summary

  • Most industries suffered substantial damages under the impact of the COVID-19 pandemic earlier this year.
  • But it was “good times” for some businesses. Companies dealing in cleaning supplies, online games, home gym equipment, etc. boomed amid the pandemic.
  • The rise of a homebody economy triggered by the lockdown served as a catalyst in the increasing demand and sales of such businesses.

The coronavirus pandemic has wreaked havoc on one too many industries around the world. Lockdown restrictions affected international trade, disrupted productions, and slowed down sales at a great rate. The stock market too tanked around March when the pandemic set in and continues to be impacted by volatility.

In its Throne Speech in September, the Canadian government promised to help suffering businesses get back on its feet.

However, there have been a few industries that have witnessed an overwhelming rise in demand in the wake of the pandemic. This boost was triggered by the rising trend of a homebody economy and, in some cases, by the cautionary measures people were expected to follow amid the pandemic. And this surge, in turn, resulted in a positive impact in their sales and financial results. Let’s dive into the details of such businesses that have been booming.

Hand Sanitizers and Other Cleaning Supplies

One thing that changed the most in our daily lives since the breakout of the coronavirus pandemic is the number of times we clean our hands and surroundings With medical health professionals advising people to sanitize as often as possible to keep the virus at bay, sales of cleaning products have climbed in the last seven months.

The revenue in the hand sanitizer market is expected to grow by 5.5 per cent annually, according to a report by the Statista.

On the other hand, cleaning products manufacturer The Clorox Company (NYSE: CLX) posted a 22 per cent increase in overall sales and a 33 per cent sales increase in its health and wellness segment in the fourth quarter ending 30 June. The company recorded a 56 per cent year-over-year (YoY) climb) in its net cash from operations, amounting to US$ 1.5 billion in this fiscal year. It also posted a 36 per cent year-to-date climb in its stock price.

Top Canadian tissue products manufacturers KP Tissue Inc (TSX: KPT) has also been running a hot business. It is currently ranked high on the Toronto Stock Exchange among trending consumer goods stocks.

In September, KP Tissues expressed concern over supply shortage of paper towels in the country in the light of a second COVID-19 wave.

Home Gym Equipment

When outdoor sports and public gyms became a scary place where the virus could spread, indoor home gyms became the new trend. This demand led to a surge in the sales of branded gym equipment such as Nautilus Inc (NYSE: NLS) and Peloton Interactive Inc (NASDAQ: PTON).

Peloton Interactive recorded a 172 per cent YoY increase in its fiscal fourth quarter revenue of US$607.1 million. The fitness company even saw a profit of over US$ 89 million in the latest quarter, as against a loss of US$ 47.4 million in the year before.

In the last six months, shares of Peloton Interactive have surged a whopping 285 per cent in value, recording a climb of nearly 290 per cent year-to-date (YTD).

Online Games

With gyms and offices having shifted to home, games could not be far. Online video gaming, often referred to as esports, was already a growing industry in Canada before the pandemic. It had contributed about C$4.5 billion to the country’s GDP in 2019, as per a report by the Entertainment Software Association of Canada (ESAC).

But with the lockdown restrictions, the demand of online games hit a newfound level.

Stocks of Canadian esports and gaming companies have also witnessed a surge. Score Media and Gaming Inc, which graduated to TSX from the Toronto Stock Exchange Venture (TSXV) in September, spiked over 111 per cent in the last six months. It is also currently trending on the TSX among top communications stocks.

Coffee and Online Food

Even though cafes and most stores were forced to pull their shutters down when the lockdown kicked in back in March, the demand for caffeine and junk food went nowhere. Instead with the newfound stress of a pandemic, it increased in the last seven months.

Owner of Canada’s favorite coffee brand Tim Hortons, Restaurant Brands International Inc (TSX: QSR) saw a sharp dip in its sales in the wake of the pandemic. However, it quickly adapted with the changing times and expanded its existence on the digital platform.

Riding on the high of online orders and takeaways, Restaurant Brands International recorded a nearly 21 per cent climb in its system-wide sales in its second quarter ending 30 June 2020.

As the economy slowly reopens, most companies are expected to rebound from their losses and recover their lost ground. As for companies that have made the best of the pandemic times, the question lies as to whether they will continue to ride this high post pandemic, or see a slide in their demand.

Online Games

With gyms and offices shifted to home, games could not be far. Online video gaming and esports was already a growing industry in Canada before COVID-19. It had contributed about C$ 4.5 billion to the country’s GDP in 2019, as per a report by the Entertainment Software Association of Canada (ESAC). But the lockdown restrictions discouraging outdoor and contact sports, the demand of online games hit a newfound level.

Video gaming company Activision Blizzard exceeded its own expectations in the second quarter ending 30 June 2020. Its Activision segment saw a total of 125 million monthly active users in Q2 2020, with its game ‘Call of Duty: Warzone’ reaching over 75 million players as of June. The Blizzard segment recorded about 32 million monthly active users in Q2 2020.

Activision Blizzard’s net revenues surged to US$ 1.93 billion in the latest quarter, up from US$ 1.4 billion in Q2 2019.

Stocks of Canadian esports and gaming companies have also witnessed a surge. Score Media and Gaming Inc, which graduated to TSX from the Toronto Stock Exchange Venture (TSXV) in September, spiked over 111 per cent in the last six months. It is also currently trending on the TSX among top communications stocks.

As the economy slowly reopens, most companies are expected to rebound from their losses and recover their lost ground. As for companies that have made the best of the COVID times, the question lies as to whether they will continue to ride this high post pandemic or see a slide in their demand.


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