The coronavirus pandemic has kneecapped the global economy, upended lives around the world and devastated countless businesses.
And the economic impact isn’t likely to end anytime soon — with spikes in COVID-19 cases leading to new lockdowns in some parts of Europe and the US death toll alone exceeding 200,000.
But the pandemic has helped some companies even as it hurt others.
Consumers unable to travel or eat out can still spend money online, conduct a Zoom meeting with friends and co-workers, and play video games to pass the time. The ever-present virus has also motivated them to scrub their counters with Clorox wipes and protect their hands with disposable gloves.
Companies able to capitalize on those trends have boosted their bottom lines, while other industries are struggling to bounce back.
Here are some of the biggest winners — and losers — of the COVID-19 economy.
Winners of the coronavirus economy
The videoconferencing platform went from a boardroom fixture to a household name virtually overnight thanks to worldwide pandemic lockdowns. People relied on Zoom for work meetings, happy hours, grade-school classes and even weddings as the virus forced them to hunker down at home.
The result was a blowout second quarter for the California-based tech giant. Its revenue from May through July exploded 355 percent to $663.5 million, while its net profits of nearly $186 million were more than 33 times the $5.5 million it posted in the year-earlier quarter. And its stock price has increased more than sevenfold this year as of Wednesday, adding more than $21 billion to CEO Eric Yuan’s net worth, according to Bloomberg’s Billionaires Index.
Still, Zoom has faced heat over its platform’s security, which has grappled with a range of problems including “Zoom-bombing” attacks on meetings by uninvited guests.
The Seattle-based e-commerce titan posted its biggest quarterly profit ever as locked-down consumers shifted their shopping online. With revenues of nearly $90 billion from April through June, Amazon accounted for about half of all online sales and roughly 14 percent of all retail sales in the US as of July.
The explosive growth has sent the company’s stock price up about 69 percent so far this year as of Tuesday, helping founder and CEO Jeff Bezos briefly become the world’s first-ever $200 billion man.
Amazon has also gone on a huge hiring spree to help keep the packages flowing. The company rushed to hire 175,000 workers in the spring, made 125,000 of those jobs permanent and just announced plans earlier this month to add another 100,000 operations jobs.
The move to online shopping has also helped big department-store chains such as Walmart and Target, which adapted quickly to the spending patterns of quarantined consumers.
A 195-percent explosion in comparable digital sales helped Target post record sales growth in the second quarter, while Walmart saw a similar 97 percent spike in its e-commerce sales.
Surprisingly, the retailers also said its brick-and-mortar stores played a role in the blowout quarter as customers ordered items online and picked them up in person.
Consumers’ reliance on Clorox’s disinfectant wipes and sprays has been good for the bleach maker’s bottom line. Its sales surged 22 percent and net profits climbed 28 percent from April through June thanks partly to increased demand for cleaning products, and its stock price has risen roughly 38 percent this year.
But the California-based company’s performance during the pandemic also helped it win consumers’ trust. The Clorox Company shot to the top of the Axios-Harris Poll 100 Corporate Reputation Rankings in July as Americans rewarded the corporate titans that stood by their sides during the virus crisis.
People are doing just about everything at home during the pandemic — even working out. That’s been a boon to Peloton Interactive, which offers high-tech stationary bikes along with online fitness classes.
The New York-based startup raked in revenues of $607 million in the quarter ending June 30 — nearly triple the prior year’s levels — and its membership base roughly doubled to about 3.1 million over its last fiscal year. That strong performance suggests Peloton has shaken off its notoriously cringe-worthy ad from last holiday season.
Many consumers who aren’t pedaling on their Pelotons have taken up video games during the lockdowns — making it an opportune time for Microsoft and Sony to release their Xbox Series X and PlayStation 5 consoles this fall. But the biggest winner so far appears to be Nintendo, which has seen huge demand for its Switch system and escapist games such as “Animal Crossing: New Horizons.”
The Japanese company reported a 200 percent jump in its fourth-quarter profits in May and has reportedly asked suppliers to boost Switch production by 20 percent. On the software side, “Call of Duty” parent Activision Blizzard raked in about $1.9 billion in revenues from April through June, up about 38 percent from the prior-year quarter.
Health-care workers, waiters and grocery shoppers have turned to single-use gloves to keep COVID-19 off their hands — and Malaysia-based Top Glove has reaped the benefits. The world’s largest disposable glove maker saw its profits increase by a whopping 417 percent in its last fiscal year on record-breaking revenues of more than $1.7 billion.
The company — which churns out gloves at 35 factories in Asia — said its monthly order levels have surged about 150 percent from pre-pandemic levels. It doesn’t expect to slow down any time soon, with glove demand expected to grow 25 percent next year as the virus remains a constant threat.
The boom didn’t come without growing pains. Top Glove warned of a shortage in March as it struggled to keep up with surging demand, and US Customs and Border Protection officials barred imports from two of its subsidiaries in July over allegations that they used forced labor practices. The company recently said it’s “making good progress” toward having the sanction lifted.
Losers of the coronavirus economy
The virus has made air travel difficult and risky — and airlines have taken a beating as a result. Major American carriers slashed their flight offerings in the spring as passenger traffic all but evaporated.
But while things aren’t as bad as they were in March and April, US airlines’ passenger volumes are still 68 percent below where they were a year ago, according to industry group Airlines for America.
Delta, American and United each lost upwards of $1 billion in the June quarter, while Southwest was $915 million in the red. Their stock prices have collapsed this year — and investment maven Warren Buffett didn’t help when he revealed in May that he’d dumped his stakes in all four carriers.
Some airlines are also planning to cut thousands of workers next month with federal bailout money set to run dry. American has warned it will shrink its workforce by 40,000 people, while United is getting ready to furlough 16,370 workers. Delta, however, has delayed planned pilot furloughs to Nov. 1, according to The Hill.
The pandemic set off a wave of retail bankruptcies that has ensnared a wide range of big-name apparel merchants, from affordable chains such as JCPenney and Century 21 to high-end clothiers including Brooks Brothers and Neiman Marcus. Those came as lockdowns forced non-essential retailers to temporarily close their stores.
Companies that stayed afloat have also struggled — Macy’s, for example, saw its net sales fall more than 40 percent to $6.5 billion in the first half of the year. While retail sales nationwide have recovered to pre-pandemic levels, clothing and accessories sales in July were still about 10 percent below where they were in February, US Census data show.
Many of the nation’s eating and drinking joints essentially went into hibernation mode as the spring lockdowns forced them to close their dining rooms — and some may never wake up. More than eight in 10 New York City restaurants and bars were unable to pay their full rent in July, according to a recent survey, and the limited indoor dining set to start Sept. 30 isn’t expected to help much.
Bigger players have suffered, too. Olive Garden parent Darden Restaurants saw its total sales drop 43 percent in the quarter ending May 31, while smaller chains such as Sizzler and Chuck E. Cheese have filed for bankruptcy.
Uber and Lyft have taken a beating as COVID-19 appeared to make passengers uneasy about sharing a car with strangers. Their revenues dropped 29 percent and 61 percent, respectively, from April through June as the number of rides ordered through their apps fell significantly, and both have axed large portions of their workforces.
Uber has made up some ground with its delivery business, which posted a 103 percent revenue gain in the second quarter and will expand with its acquisition of Postmates. And Lyft has pointed to a recent recovery, with rides in July 78 percent higher than April’s levels.
The lockdowns were good for streamers like Netflix but horrible for movie exhibitors that had to shutter their theaters. AMC Entertainment, America’s biggest theater chain, lost almost 99 percent of its revenues in the second quarter — which it called the “most challenging” in its 100-year history — while Regal owner Cineworld swung to a $1.6 billion pre-tax loss in the first half of the year.
The pandemic also forced big studios to push back release dates for blockbuster films, as Disney did this week with “Black Widow” and Steven Spielberg’s “West Side Story.”
Hotels and casinos
COVID fears and travel restrictions have gutted hoteliers just like airlines. Maryland-based Marriott racked up a $154 million operating loss in the second quarter as its hotels emptied out, driving its worldwide occupancy rate down to just 11 percent in early April. And New Jersey-based Wyndham swung to a $174 million net loss for the quarter from a $26 million profit a year before.
The casino industry also took a hit as the pandemic shut down the Las Vegas strip in March. Gambling giant MGM Resorts International saw its net revenues plunge 91 percent to $290 million from April through June, while rival Wynn Resorts’ operating revenues sank almost 95 percent to $85.7 million.
The pandemic hasn’t crippled Google, but it also hasn’t driven it to the same explosive growth as its Big Tech peers. Parent company Alphabet posted its first-ever revenue drop in the second quarter as the virus crisis weighed on the companies that take out ads on Google’s search engine and other services.
The Silicon Valley titan did see “gradual improvement” in its ad business through the quarter, chief financial officer Ruth Porat said in July. Its Google Cloud business was also a bright spot, with its revenues surging some 43 percent to about $3 billion.
With Post wires
New York Post
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