The USA appears to be turning a corner in its fight against COVID-19 and several ASX stocks are reaping the benefits.
While some firms such as concrete additive maker Eden Innovations (ASX:EDE) kept thriving thanks government stimulus, many consumer focused businesses faced tough times with consumers cutting back on spending.
But the success of the USA in its vaccination program has led to consumer confidence and spending rebounding. In March it rose 4.2 per cent and 10.7 per cent across the entire quarter.
A McKinsey survey released last week showed that many spending categories depressed by COVID-19 are recovering and over 50 per cent of US consumers expect to spend extra in the months ahead – particularly higher income millennials and people who are vaccinated.
Which ASX stocks might benefit?
The McKinsey survey named a number of categories that may benefit. Two of these relevant to ASX stocks in the USA include out of home entertainment and apparel.
Stocks in the apparel space in the USA include plus size womens outlet City Chic Collective (ASX:CCX) which owns a handful of ecommerce assets with a US presence, including 2019 Avenue Stores and Evans.
Another is Kathmandu (ASX:KMD) which owns US outdoor footwear company Oboz, having purchased it in 2018.
Turning to out of home entertainment and there is only one pureplay ASX stock in this space – Ardent Leisure (ASX:ALG).
Although it is arguably better known for its Australian theme parks, this company owns 44 Main Event bowling centres in the USA.
Only yesterday it told shareholders its revenue was surging in recent months to the point where it was even higher than 2019 – up 23 per cent in March 2021 compared to March 2019 and up 40 per cent in April.
BNPL players in the USA
Other stocks that would benefit from increased consumer spending in “apparel” are ASX BNPL players with a US presence.
The most obvious are Afterpay (ASX:APT) and Zip (ASX:Z1P) which were founded Down Under and have begun to make inroads into the USA.
The former of these stocks is considering listing on the NASDAQ – a move the company wants to make to raise awareness among investors and that might lead to its delisting from the ASX.
In fact North America is now the largest contributor for Afterpay – beating Australia to being the first region to record over $1 billion in underlying sales in a single month.
But there are another two ASX BNPL stocks that were founded in the US – namely Sezzle (ASX:SZL) and Zebit (ASX:ZBT).
While Sezzle is a pure-play BNPL company, Zebit is a ecommerce business with an inhouse BNPL solution that targets consumers unlikely to pass traditional checks for mainstream credit.
Similar to Ardent Leisure, Zebit is doing better than it was 12 months ago, reporting US$18.1 million in revenue in the March quarter of 2020 but US$26.9 million in the March quarter of 2021 as well as a steep drop in bad debts.
Rounding out the list of ASX BNPL stocks in the USA is Openpay (ASX:OPY), although it is at an earlier stage in its US journey than Afterpay and Zip having begun last December.
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