Shares in Afterpay (ASX: APT) are up 26 per cent today after the buy-now-pay-later (BNPL) powerhouse reported March was its third-highest underlying sales month on record, up 12 per cent on January and February.
The group claimed it was "difficult to identify any sustained trends" in any region as a result of Covid-19 impacts, and has benefited from digital exposure as 88 per cent of total underlying sales were online.
The daily increase was particularly marked Afterpay Day on 19-20 March, illustrating "customer appetite notwithstanding the new and sudden impact to their work and living conditions".
On the day of that particular online sales event, CEO Anthony Eisen released a letter to shareholders emphasising Afterpay's business model, balance sheet and customer base offered protection in times of economic uncertainty.
His calls were not heeded though and market hysteria got the better of investors, with APT shares closing at $9.90 on 19 March. Today they have reached $28 each - a level not seen since 10 March.
In today's announcement, Afterpay explained underlying sales moderated by 4 per cent in the second half of March as governments enforced lockdown and isolation protocols. The falls were more pronounced in the UK and the US compared to Australia.
"ANZ online sales showed a marked uptick in the second half of March (up 8 per cent on first half of March), while in-store volumes were significantly impacted (down 29 per cent on first half of March)," the company said.
The initial skew and increase in online sales were weighted towards necessity, personal care and homeware categories, however this trended back somewhat towards lifestyle and luxury categories.
"We have experienced positive growth in April month-to-date in all markets with average daily underlying sales up approximately 10 per cent on the second half of March globally."
Afterpay has also held up the mature ANZ region as a "blueprint" for the path to profitability in other markets.
"Estimated profitability on a YTD basis has increased relative to H1 FY20 and for the month of March relative to the pcp," the company said of the Australian and NZ markets.
"Gross Losses (Group) for the month of March is estimated to be approximately 1.0 per cent (unaudited), in line with H1 FY20, notwithstanding increased contribution from newer markets that are initially higher loss early in lifecycle."
For the March quarter underlying sales globally were up 97 per cent at $2.6 billion, with a 40 per cent increase in ANZ and a 263 per cent jump in the US.
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Updated at 3:15pm AEST on 14 April 2020.
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