Total
0
Shares
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Buy now pay later giant Afterpay’s (APT) underlying sales for the third quarter have almost doubled compared to this time last year, up 97 per cent
  • March was the group’s third-largest underlying sales month on record, up roughly 12 per cent on January and February
  • Despite reporting a minimal virus impact, Afterpay has tweaked its business model to protect the company from the long-term effects of COVID-19
  • Spending limits have been tightened and Australian customers are now expected to pay the first instalment of their payment upfront
  • Transaction approvals for luxury goods will be further scrutinised
  • So far, the company has seen positive growth in April, with average daily underlying sales up approximately 10 per cent on the second half of March globally
  • On the market at midday trade, Afterpay is up 19.6 per cent and is selling shares for $26.32 each

Buy now pay later giant Afterpay’s (APT) underlying sales for the third quarter have almost doubled compared to this time last year.

Sales are up 97 per cent to $2.6 billion, mainly due to growth in the U.S., which is up 263 per cent.

The company’s active customers jumped to 8.4 million, up 122 per cent on the year prior and representing an increase of 15 per cent from the 7.3 million reported in its interim results.

Spending limits

Despite reporting a minimal virus impact, Afterpay has tweaked its business model towards “low-risk” shoppers to protect the company from the long-term effects of COVID-19.

Spending limits have been tightened and customers in Australia are now expected to pay the first instalment of their payment upfront.

Transaction approvals for high-risk products, such as luxury goods, will be looked into as it focuses on limiting high- risk purchases from new customers.

March trading performance

The $5.8 billion fintech said it is difficult to identify any trends due to COVID-19.

March was the group’s third-largest underlying sales month on record. Underlying sales across all markets were strong, with average sales up around 12 per cent on January and February.

Afterpay Day showed an increase in sales — especially in Australia — showing customers can’t resist a good sale; even in this pandemic. However, our shopping is benefiting the current environment.

Online sales in March represented 88 per cent of the total global underlying sales. But the company said the second half of March was four per cent lower compared to the first half of March.

So far, the company has seen positive growth in April, with average daily underlying sales up approximately 10 per cent on the second half of March globally.

Merchants

Around the globe, Afterpay had over 48,000 shops signed up at the end of the third quarter, a 78 per cent growth since this time last year.

New merchants for Australia include eBay, Samsung, Lancome, YSL Beauty, Kookai, Pet Food Australia, Salt and Pepper and more.

eBay Australia

A partnership with eBay was launched on April 3, providing Afterpay with access to eBay’s 40,000 Australian small and medium businesses and their customers.

Afterpay customers now have access to new items such as everyday essentials, homewares, tech and even pre-owned items.

Global expansion

The company says its expansion into Canada is progressing well. While it hasn’t provided a date to enter the region, Afterpay maintains it’s targeting a 2020 launch.

Meanwhile, Afterpay is still preparing to launch in stores in the U.S., but is waiting for the recovery from this pandemic.

“I am very grateful to the entire Afterpay team who have responded so effectively to protect the interests of our customers and merchant partners, while also dealing with the impacts of COVID-19 on their own lives,” CEO Anthony Eisen said.

“Our dynamic business model and strong balance sheet means we are well-positioned to respond and adapt through this period. We are confident that our customer-centric model, which encourages budgeting and responsible spending, will be even more relevant in a post-COVID-19 environment,” he added.

On the market at midday trade, Afterpay is up 19.6 per cent and is selling shares for $26.32 each at 12:26 pm AEST.

APT by the numbers
More From The Market Herald
ISX (ASX:ISX) - Managing Director, John Karantzis

" iSignthis (ASX:ISX) completes demerger

Software company iSignthis (ISX) has completed the demerger of its European business ISC Financial EU (ISXFEU).

" Northern Star Resources (ASX:NST) recaps Q1 FY22

Northern Star Resources (NST) has recapped its September quarter, announcing it sold 386,160 ounces of gold for the period.
BHP Group (ASX:BHP) - CEO, Mike Henry

" BHP’s (ASX:BHP) iron ore production drops amid labour shortage

BHP Group’s (BHP) iron ore production has slipped by 3 per cent amid a shortage of available labour.

" Aristocrat Leisure (ASX:ALL) to buy Playtech for $5b

Aristocrat Leisure (ALL) is looking to purchase online gambling software and content supplier, Playtech, for $5 billion.