Will the consumer goods bonanza continue? Will the consumer goods bonanza continue? Will the consumer goods bonanza continue?

Will the consumer goods bonanza continue?

Equities 3 minutes to read
Peter Garnry

Head of Saxo Strats

Summary:  In today's equity update we take a look at some of the consumer goods companies that are exposed to the bonanza that is taking place in consumer goods spending as consumers are diverting their spending from travel, leisure activities and gasoline towards consumer goods in general excluding cars. As a result some consumer goods companies are experiencing high growth and we present lists of consumer goods companies to consider.

August retail sales in both the US and Europe were strong hitting record levels. Part of it is a naturally bounce back from depressed levels during the early lockdowns due to Covid-19. As time has progressed our health care sector has become better at treating Covid-19 patients causing the second waves of Covid-19 in the US and Europe to have smaller impact on the health care sector. Only restrictions are enforced and thus retail sales activity can function normally again. On top of that many households are spending much less on travelling and leisure activities than before. Even gasoline consumption is still much lower due to work-from-home increasing disposable income for households. Our theory is that households are reallocating their spending towards consumer goods and delivery services of food and e-commerce packages, and not so much the big-ticket items such as cars.

Source: Bloomberg

Go for high quality and brand companies

Zalando’s Q3 numbers yesterday and raised FY20 outlook confirms that consumer goods are doing well, but also Tesco in the UK showed good results the other day. Consumer goods companies such as Nike has also been showing impressive levels of growth since the bottom in March. As a travel and leisure activities remain significantly below normal levels the bonanza in consumer goods will continue. The table below shows high quality consumer goods names (highest return on invested capital) and fastest growing consumer goods companies. Our assumption is that companies with high quality will be better to navigate the uncertain times and companies with a strong brand will be able to lift sales better online, so we recommend investors to incorporate those factors when getting exposure to consumer goods companies.

High quality consumer goods companies (ranked on ROIC)

NameMkt. Cap. USD mn.Return 5YROICP/E
Kimberly-Clark Corp51,26354.5633.3519.96
Colgate-Palmolive Co67,51234.3832.7926.13
NVR Inc16,099177.1231.3820.91
Reynolds Consumer Products Inc6,49430.50
Lululemon Athletica Inc44,038523.3930.2380.60
Monster Beverage Corp41,75474.4328.0037.08
Clorox Co/The26,828101.1627.8328.91
Booking Holdings Inc73,24937.1526.0430.97
Persimmon PLC10,82180.8925.4412.36
Herbalife Nutrition Ltd7,50682.8223.3316.76
Hermes International93,936134.3622.9071.06
boohoo Group PLC5,487928.0922.2647.98
Moncler SpA10,956132.3321.9735.51
Deckers Outdoor Corp6,873294.5621.7123.89
Hershey Co/The29,85366.9721.4224.51
Taylor Wimpey PLC5,720-14.8020.809.93
Levi Strauss & Co6,18020.6534.59
Pandora A/S7,707-25.7120.6333.46
Garmin Ltd18,766216.7120.4922.82
adidas AG65,358285.7620.0096.78
Brown-Forman Corp35,992100.4519.8643.31
eBay Inc36,450121.3418.3918.28
Royal Unibrew A/S5,062194.1818.2628.90
Boston Beer Co Inc/The11,233307.6417.5780.90

Source: Bloomberg and Saxo Group

High growth consumer goods companies (ranked on 1-year revenue growth)

NameMkt. Cap. USD mn.Return 5YRev. growth 1YP/E
Etsy Inc16,651928.30136.75113.83
HelloFresh SE9,326122.6538.20
Delivery Hero SE22,54694.53
Wayfair Inc29,006670.7783.71
Fiverr International Ltd5,45281.88
Farfetch Ltd9,07574.27
Beyond Meat Inc12,07668.536738.21
MercadoLibre Inc57,6821138.9561.10
Chewy Inc24,19747.36
boohoo Group PLC5,487928.0944.5147.98
Boston Beer Co Inc/The11,233307.6442.0080.90
Grubhub Inc6,817146.6041.29
Amazon.com Inc1,598,113498.4240.23122.67
Ocado Group PLC23,486596.4934.98
Zalando SE26,790188.3827.38189.13
Clorox Co/The26,828101.1621.8828.91
Prosus NV148,70818.9738.78
Campbell Soup Co14,6369.8418.4316.30
eBay Inc36,450121.3418.2418.28
Conagra Brands Inc18,19729.8112.0614.69
Nomad Foods Ltd5,01950.0611.3822.14
J M Smucker Co/The13,36114.6510.8414.73
Church & Dwight Co Inc22,540125.3010.6432.09
ASOS PLC6,82783.2210.2698.92
DR Horton Inc28,263169.559.8614.47

Source: Bloomberg and Saxo Group


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992