2024-02-21 08:30:00 ET
Summary
- BARK, Inc. is facing challenges not dissimilar to those of Procter & Gamble during its turnaround phase.
- Though much smaller and with a different set of problems, BARK must navigate equally difficult hurdles, but against market sentiment more than anything.
- Sales growth is still negative on a YoY basis but has shown signs of reversal in the last two quarters.
- The company is implementing strategies to improve revenue growth and profitability, but a full turnaround is still uncertain.
My Thesis for BARK
Turnaround opportunities are often disguised as poorly performing, seemingly distressed entities that no one wants to touch. These entities can take on different forms. At one time, analysts and big media houses seemed convinced that The Procter & Gamble Company (PG) had " big problems " with its long-term future and that the goal to turn the company around was " a drastic attempt " by PG to "become more nimble and speed up growth."
Even if you weren't one of the more critical cynics of that time, you probably didn't see it as the perfect opportunity to invest in the turnaround of a globally recognized, recession-resilient , double-centenarian. You would have been right because, during the tumultuous years of resizing and restructuring their brand portfolio, the stock practically went nowhere, starting at about half its current price in July 2014 right before the brand consolidation announcement the following month, and moving sideways all the way through Spring of 2018. If you'd held on, however, you'd have seen the stock price double from there in just 5 years....
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For further details see:
BARK: Turnaround Stories Don't Always End Well, But I See Hope