Even Snoop Dogg couldn’t light a fire under Solo Brands (NYSE:DTC) this holiday season.
The company’s shares limped into Monday’s open more than 38% lower from Friday’s close to set a 52-week low of $3.59 after disappointing direct-to-consumer sales this holiday season led the company to lower its FY23 revenue guidance and replace its CEO.
With bottom-line revenue for FY23 cut by 6% and the share price in a freefall Craig Hallum downgraded Solo Brands (DTC) to Hold from Buy and dropped the price target to $5, 15% below Friday’s closing price. The firm also revised its forward revenue estimates for Q4 to $165M (vs $201.1 estimate).
Solo Brands (DTC) which makes the namesake Solo Stove, had a rough time this holiday season despite a clever, and more importantly viral, ad campaign featuring Snoop Dogg which generated 7B impressions but did little to drive sales.
Given the “lack of visibility and uncertainty” and poor execution transferring inventory to retail channels in time for the holiday shopping season, Craig Hallum is now neutral on the stock, but remains optimistic that there is still a “long runway for retail expansion” with new and existing partners,” as well as meaningful value in its assets.