Summary of Earnings Calls: Week of 8/3 – CDW Corp, CVS, Wayfair, Etsy, Square

  • CDW Corp
  • CVS
  • Wayfair
  • Etsy
  • Square

CDW Corp Earnings Call Summary

CDW Corp 8/5 
Summary With the onset of coronavirus, there is a great need to help digitalize across businesses and institutions, in which CDW has and will continue to use their expertise and establishment in the field to be aggresive in pursuing sales
Goals Retain the diverse set of customers and tailor business to align with the new demands of services, products, and price points brought forth by the coronavirus
Strategies/Initiatives Expertise fuels demand in customers who wish for services such as ecommerce and the new format of online education
important CEO Quotes“As the quarter progressed, for some of our customer end markets, projects were postponed and demand declined as the economic toll of the crisis impacted customer set. In other customer end markets, IT investment was prioritized and remained healthy.”With the changing work envoirnment, many projects were postponed, while the company had to rearrange their resouces to counter with these new projects in light of COVID-19
 “Remote enablement, business and operations continuity and security remain top customer focus areas to manage remote environments at scale and to prepare to work and learn from home in some capacity for longer. Customers also focused on initiatives to reduce cost, optimize resources and leverage technology for better customer and employee experiences through digital transformation.”The company realizes the new emphasis that customers place on cost efficiency, which means that they need to offer cheaper alternatives to retain and bring in customers
important CFO Quotes None 
COVID update“Corporate and Small Business both declined double digits. As you know, these channels include our small and medium business customers. The unique nature of the COVID-19 crisis has posed greater challenges for some small and medium businesses.” 
Key hiresNone 
Funding or new fund allocation?Increased investment in cloud, ecommerce and overall digitalization process 
Mergers or acqusition mentions“On July 1, we acquired IGNW, a leading provider of cloud-native services expertise and software development capabilities.”IGNW specializes in digital velocity solutions, including advisory, consulting and development services, and has been a partner of CDW since 2018
Product Release mentions None 
Other major business updates With their diversified customer base which local and large businesses, the government, in education, and healthcare, it sets the company up well for what may lie ahead
Relevant Analyst QuestionsNone 

CVS Earnings Call Summary

CVS 8/5 
Summary Becasue of their positon as the go-to tesing center and pharmacy for so many Americans, CVS has a footprint in many Americans’ homes with their online and in person services. They must expand their online presence and continue working with hospitals and other healthcare units to ensure expoure
Goals Deal with the retained demand for COVID testing and new upcoming demand for flu tesing, while expanding online services
Strategies/Initiatives Increase digital footprint at home
  Retain new customers online who came in for COVID testing and flu shots
important CEO QuotesAs an example, 40% of those being tested at a CVS Pharmacy were not pharmacy customers previously. We’re now connected with them digitally with the objective of making them long-term CVS customers.CVS strategically uses volume of people coming in for testing to try to expose them to CVS’s digital channels in hopes of making them long term customers
 “Our retail prescription home delivery volume is up more than 500% in Q2 versus Q1 of this year, and we continue to focus on increasing our front store attachment rate.”With the digitalization of prescription services and allowing ease in which to acquire them, along with overseeing home visits for medical specialists, CVS ensures customers stay engaged, even at home
important CFO Quotes“And I think we’re going to see a new value proposition emerge that is going to be based on the elements of convenience, cost, quality and trust.”Because the CVS brand is well established and trusted, consumers are more likely to allow aspects of their lives go through CVS, in particular the acceleration of virtual care of telemedicine, along with remote caring, ordering prescriptions, etc
COVID update None 
Key hiresNone 
Funding or new fund allocation?
 Focus on digitalization and penetration into the home market
Mergers or acqusition mentionsNone 
Product Release mentions“Our work also continues in developing our next best action programs including utilizing our pharmacist panel capabilities. As an example, we are launching health advisor to Caremark clients as a new service offering in 2021.” 
Other major business updatesNone 
Relevant Analyst Questions“How much of the new procedures… that you have in place are the type of investments that might continue on a long-term basis? And how does that factor into the thought process and framework you had about where retail, in particular, should grow into 2021 and beyond?With their significant pivot into healthcare services, along with COVID testing, flu season, and iretention from recently added+ new customers, their investments in increased digitalization and home services will continue at least until 2021

Wayfair Earnings Call Summary

Wayfair 8/5 
Summary As more people stay at home, there is a huge incerase in demand for home products, which Wayfair specializes in. Through their digital avenues, they have been successful at engaging with customers and making huge revenure, almost being unable to keep up with demand
Goals Keep up with heavy demand and engage with new customers to make them loyal to Wayfair
Strategies/Initiatives Invest in suppliers and distributors while improving upon their ecommerce to ensure high conversion rates
important CEO Quotes“Consumers deprioritized expenses such as travel and entertainment and shifted their focus and discretionary spending to their homes. We see evidence of this in strong and consistent demand across nearly all of the product classes we sell, not just those directly linked to having to shelter or work from home.”In the midst of the pandemic and less advantagoues economic situation for many, consumers focused on home goods, not just for at-home work, meaning that the company will continue to see high demand for its products
 “Accelerated e-commerce adoption was also an important tailwind in Q2 and should bring longer-lasting benefits to our business. What was, even before COVID, an inexorable shift to e-commerce then became supercharged over the last several months, and we believe much of the step change in online penetration will prove to be sticky.”Threough their mobile app and websites, the company sees that this digital revolution is here to stay
important CFO Quotes“The e-commerce shift remains real and powerful, and consumers are finding high satisfaction as they adopt e-commerce and Wayfair. They also have good reason to remain focused on their homes. Yet recession risk still looms real, the competitive landscape remains fluid and the state of reopening is ever evolving.”However, with the macro envoirnment very uncertain, it is still uncertain to see if this unprecendented growth can continue for years to come
COVID updateAcross our CastleGate fulfillment network, the sheer volume of products moved in Q2 nearly doubled year-over-year…we added approximately 40 buildings and more than doubled the square footage across our logistics footprint to over 16 million square feet. As a result, we are fortunate to have capacity in many places to flex in response to the wave of demand, and we saw enhanced efficiencies as a result.”By investing heavily in their distribution centers and suppliers, Wayfair is able to keep up with the boom in demand fot their products, and even then, they are experiencing delays
Key hiresNone 
Funding or new fund allocation? Funding new distribution avenues to satisfy demand
Mergers or acqusition mentionsNone 
Product Release mentionsNone 
Other major business updatesNone 
Relevant Analyst Questions“So in the markets that are reopening, can you maybe give us a little bit more color on what you’re seeing in terms of trends relative to average quarter-to-date trends that you highlighted?”The company has gained over two years worth of new customers in the span of one quarter, and the question is whether they eill be able to engage with and keep those customers loyal to Wayfair

Etsy Earnings Call Summary

Etsy 8/5 
Summary As a result of the pandemic, Etsy has seen unprecedented growth, with a focus on masks, however with the increase in their other products showing that their rise is not just a reaction to covid but one to the changing macro envoirnment where online shopping is booming. With investments to their advertisng and their product, Etsy hopes to keep up the growth in the future
Goals Grow the Etsy brand as ecommerce spending booms as a result of the pandemic, continuing to bring in customers with mask sales and retain them with the other goods offered by vendors on the site
Strategies/Initiatives Increase investments in cloud mitigation
important CEO Quotes“But the strength of the second quarter was about so much more than masks. In fact, non-mask sales grew 93% in the second quarter”While mask sales on the site grew substantially, the company shows that its growth is not tied to just COVID-19 and the macro envoirnment as a whole with people buying other products through their site
important CFO Quotes“As a reminder, to support our sellers during this difficult time, we made onetime investments, which totaled $12 million in Q2, which predominantly included waiving Offsite Ads fees for a month and providing listings credits to some sellers. Another factor impacting Etsy Ads take rate was increased conversion rate from higher intent visitors searching and quickly finding things like face masks, which reduces page views.”In a show of good faith by waiving fees shows the support and commitment to sellers who drive the company, and also shows that many on the site now have already determined what they want to buy before landing on the page, decreasing the importance of advertising on the site.
COVID update While the future situation is very uncertain, Etsy has confidence that their mask sales will continue to be strong and that the shift to ecommerce will mean that the company will continue to have strong numbers
Key hiresNone 
Funding or new fund allocation?“But we maintain our conviction that we should be investing given the early stage of our growth and the significant opportunity ahead of us. As one example, we made a commitment in 2018 to migrate to the cloud and that took a significant investment of both money and time.”Increased investment in the digitalization and online capabilities mean that the company expects to grow further and wishes to be ready for the immense change in consumer spending online
 “We continue to lean into all of our marketing investments both higher funnel like television, as well as performance marketing in places like Google and Facebook.” 
Mergers or acqusition mentionsNone 
Product Release mentions Launched new feature that allows videos of the product to be uploaded, leading to many uses
Other major business updatesNone 
Relevant Analyst QuestionsNone 

Square Earnings Call Summary

Square 8/5 
Summary Because of the digitalization of financial transactions as a whole during the COVID pandemic, driven by an dexplosion in ecommerce, Square has been able to take advantage of that with their services and allowed for immense growth during this quarter
Goals Feed off of the current momentum to drive unprescedented growth even further
Strategies/Initiatives Launch new products to gain diversifying customers
important CEO Quotes“And in July, we expect to achieve gross profit growth of more than 200% year over year. We saw our customers increasingly use their cash card as their primary spending device. seven million people paid with their cash card in June, double compared to last year. We also saw an increase in people using direct deposit for recurring paychecks, strengthened by stimulus and unemployment checks and tax refunds.”With lockdowns in place, the only means of spending turns to digital avenues, in which Square specializes in. As people utilize this service for more than just consumer transactions, and will continue to do so in the mid-term future, it seems to be pitted for more sucess
important CFO QuotesWhile we’re encouraged by these results, we recognize government stimulus programs contributed to the uplift in growth and spend per customer. If stimulus programs are either reduced or not renewed or if we see an impact to customer — consumer spending, we would not expect cash app’s growth to sustain at these levels. There is a lot that is unknown here, and growth could normalize.However, this growth,as the put it, is unsustainable, and there were many factors that led to huge revenues and profits this quarter, which does not seem likely to occur. Additionally, thees factors are out of the company’s control, so all they can do is sit and wait.
COVID update International GVP growth was 40% the past year over year
Key hires/departures“And finally, we’re saying goodbye to Aaron Zamost, our head of communications and people, who’s been helping us, not only with this call since our IPO, but has been helping us build Square for close to nine years.” 
Funding or new fund allocation?None 
Mergers or acqusition mentionsNone 
Product Release mentions“We launched on-demand delivery functionality, which enables sellers to take control of their fulfillment process by offering delivery to their customers directly from their websites.”Sellers retain more control and are able to work out the economics themselves instead of through a third party
Other major business updates Facilitated over $873m in PPP loans
Relevant Analyst Questions None

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