This is going to be a quarter to forget for most companies. With stay-at-home policies and recessionary fears keeping spending in check it's going to be a challenging earnings season for most investors.
Some companies are bucking the malaise. You already know about the obvious winners, the videoconferencing, at-home fitness, and telehealth specialists that have been all the rave with growth investors. Now let's take a look at some of the less obvious companies that are making the most of the new normal. Let's see why Camping World Holdings (CWH +11.46%), Dropbox (DBX 3.81%), and Tanger Factory Outlet Centers (SKT +2.37%) are turning things around this quarter.
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Camping World
Big-ticket purchases may seem like the last thing on the mind of consumers these days, but don't tell that to Camping World. It has been one of the hottest stocks since bottoming out at $3.40 in mid-March, up a blistering 645% through Wednesday's close.
The leading retailer of new and used recreational vehicles wasn't very popular earlier this year. Revenue declined 3.5% through the first three months of this year. However, demand has been percolating in the new normal. The RV Industry Association reported in late May that vehicle sales in some markets have soared as high as 170% over the same period a year earlier.
What's going on here? Well, families still want to go on summer getaways, but they're hesitant to fly or even drive to resort hotels. Don't even think of booking a cruise right now. For families with the means and travel flexibility an RV has become the logical vacation option for folks who want to travel while respecting the norms of social distancing. Analyst channel checks show that Camping World sales were picking up in May ahead of Memorial Day, and there is no reason to think that business is slowing now. Camping World also operates the Good Sam membership club that is the RV industry's equivalent of AAA for drivers, so it stands to cash in through two different ways on the surge in demand.
Dropbox
Cloud-based storage was a growth industry long before the pandemic, but now with folks working from home -- and more importantly starting to work more from several different locations -- the portability of files has never been more important. Dropbox is the top dog in this dedicated niche, providing storage to more than 600 million members worldwide.
Most Dropbox users never pay a penny, but premium tiers exist that unlock enhanced features and expanded storage. Files aren't getting any smaller, and now that folks are leaning more and more on Dropbox we're seeing growth for its pay plans accelerating this quarter. Dropbox had 14.6 million paying users at the end of March, now, up 11% from the 13.2 million premium accounts it was servicing a year earlier. The pace has picked up during the pandemic. Daily trials to its Dropbox Plus premium platform has have risen 25% since the mid-March shutdown. Trials for its enterprise-facing Dropbox Business offering have soared 40% over pre-coronavirus levels.
Tanger Factory Outlet Centers
Camping World and Dropbox may be doing far better than they were a year ago, but that's not the case with Tanger Factory Outlet Centers. However, with the operator of 39 different upscale factory outlet shopping centers reopening most of its locations in recent weeks we're seeing a surprisingly quick return to normalcy.
Tanger's mostly outdoor malls have now seen 72% of its total occupied stores reopen, accounting for 69% of its pre-pandemic annualized base rent. The number open stores is approaching 90% of centers open fore more than a month. Shoppers are also coming back. Weekly traffic is now more than 85% where it was a year earlier, rising to 90% of prior levels for locations open for at least a month.
Tanger Factory Outlet Centers is coming off of back-to-back quarterly losses, and that along with the pandemic closure forced it to pause its generous payouts after 27 consecutive years of hikes. Some of the merchants at currently closed stores won't come back, and that's the nature of the state of retailers these days. However, it's not ready to turn a profit again -- and that will start the meter on the quarterly distributions again.
