Find out the details of the card’s CEO cut spending with trips down 99%

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It is clear that Americans have slowed spending considerably, as many industries have essentially stopped in the midst of the coronavirus pandemic and job losses. But the head of the credit card company Discover Financial Services offered insight into the severity of the current situation.

Discover’s spending by cardholders in different categories this month in the midst of the coronavirus crisis was discussed by CEO of Discover Roger Hochschild in a conference call on results on Thursday.

“As of April, daily sales have dropped 14% year over year,” said Hochschild. “Discretionary spending is down 33%, driven by the travel category, which, although only 8% of cardholder spending, is down 99%, and by retail, which is down 11%. “

Discover’s breathtaking data points have raised eyebrows on Wall Street.

“Yeah, it’s so bad,” wrote Christopher Harvey, equity strategy manager at Wells Fargo, in a note Friday citing Hochschild’s comments. “It shouldn’t be surprising, but we still gasped during this conference call quote from the CEO of Discovery Financial. “

With companies closing from coast to coast to slow the spread of the coronavirus, retail sales in the United States fell sharply last month. Total sales fell 8.7% in March, the largest drop since the government started following the series in 1992.

Comments from Discover’s CEO on April indicate that these official numbers are likely to get worse.

“As long as home orders remain in place and many businesses remain closed, we expect the weak trend in sales volumes to continue and future trends will depend on the pace of recovery,” said Hochschild during the conference call.

The travel industry – including airlines, hotels and agencies – was the hardest hit by the government’s publication of stay-at-home notices, while the events had to be canceled, in the purpose of containing the deadly virus. Air travel has dropped more than 95% as the Covid-19 pandemic spreads to the United States.

Discover said there was an increase in grocery spending when people were in a rush, but daily sales were offset by a 60% reduction in oil spending in April. Gas demand is at its lowest level since 1968, with the majority of the country avoiding going out to slow the spread of the coronavirus.

Discover announced a surprise loss of 25 cents per share for the first quarter compared to a profit of $ 2.15 a year ago. Stocks fell more than 50% this year.

– Michael Bloom of CNBC contributed to the report.

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