Argus Updates Equity Research Report Coverage on Dogness (DOGZ)
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Highlights, as conveyed by Argus Analyst
- In our view,
Dogness'successful execution of its business plan led the company back to profitability in fiscal 2021, which ended on June 30, 2021. Dognesshas benefitted from a surge in demand related to increased pet ownership during the COVID-19 pandemic and increased momentum for its core product line, led by higher-margin smart pet products.
- We are encouraged by the company's 27% revenue growth in fiscal 2021 and demand trends for the smart product portfolio. The smart line made up 32.1% of revenues in fiscal 2021, up from just 8% in two years. Given its higher margins compared to the traditional pet product line, fiscal 2021 gross margin rose to 37.6%, levels not seen since 2018.
- During fiscal 2021,
Dognessexpanded availability across multiple sales channels, including online, specialty stores, big box warehouse clubs, and general retail. We expect this momentum to continue, as Dognesshas established new and expanding partnerships with leading U.S.retailers including Target, Petco, IKEA, and Walmart, and online platforms including Amazon and Chewy.com, which we think should ease customer concentration risk.
- Thus, we expect
Dognessto continue its evolution into a higher-margin technology-focused pet product company with a diversified global footprint, and to capitalize on favorable long-term global trends in the pet care industry as pet owners return to offices and require mobile pet monitoring and care.
- As of
June 30, 2021, Dognesshad $5.5 millionin cash and short-term investments on its balance sheet. Subsequently, the company raised $4 millionin gross proceeds from an equity offering in July 2021. With its favorable outlook for sustained positive operational cash flow, we believe the company is capitalized sufficiently to execute on its business plan and build value for the company and shareholders.
INVESTMENT THESIS (Click here to view full Argus Equity Research Report & Investment Thesis)
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the "safe harbor" under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding lingering effects of the Covid-19 pandemic on our customers' businesses and end purchasers' disposable income, our ability to raise capital on any particular terms, fulfillment of customer orders, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in
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David Pasquale, Global IR Partners, New York Office Phone: +1-914-337-8801, DOGZ@globalirpartners.com