Why Bark (BARK) Stock Is Falling Today

Petr Huřťák /
2024/06/04 11:04 am EDT

What Happened:

Shares of pet products provider Bark (NYSE:BARK) fell 20.4% in the morning session after the company reported first-quarter earnings results and provided weak guidance. Specifically, revenue and adjusted EBITDA guidance for the upcoming quarter and the full year came in below expectations. Revenue was also underwhelming during the quarter, down 3.6% year on year. The weakness was attributed to "fewer total orders in the most recent period, largely related to the Company carrying fewer BarkBox and Super Chewer subscriptions into the quarter." The weakness mostly affected the Direct to Consumer (DTC) segment. On the other hand, Commerce revenue rose 20.9% year-over-year. Overall, this was a weaker quarter for BARK.

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What is the market telling us:

Bark's shares are very volatile and over the last year have had 40 moves greater than 5%. But moves this big are very rare even for Bark and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 4 months ago, when the stock gained 16.3% on the news that the company reported a "beat and raise" quarter. Fourth quarter results slightly beat analysts' revenue estimates, driven by better-than-expected Direct-to-Consumer sales. Bark also topped Wall Street's free cash flow projections and lifted its Q4 revenue guidance. On the other hand, its operating margin missed analysts' expectations. Overall, the results were positive.

Bark is up 72.8% since the beginning of the year, but at $1.30 per share it is still trading 20.6% below its 52-week high of $1.63 from September 2023. Investors who bought $1,000 worth of Bark's shares at the IPO in December 2020 would now be looking at an investment worth $104.84.

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