Aterian Inc. (ATER) stock prices plummeted by a massive 39.55% some time after market trading commenced on August 9th, 2021, bringing the price per share down to USD$4.98 early on in the trading day.
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Challenging Q2 2021
The second quarter of fiscal 2021 proved to be a challenging quarter for the e-commerce sector, having been plagued by a global supply chain crisis, inflation, and an extreme shift in consumer behavior. The change in consumer behavior as a result of the gradual opening of brick and mortar stores as regulations and restrictions related to the pandemic eased up. This proved to be a difficult environment that resulted in ATER stock reporting a significant increase in product variable cost.
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ATER Stock Staying Afloat
Nevertheless, ATER stock reported an average 20% increase in sales on a proforma basis across all fourteen brands as compared to the second quarter of 2019. Early July of 2021 saw supply chain constraints turning into a global crisis as the costs of containers skyrocketed by 500%, as compared to the prior year. This presents a significant risk as compared to the prior year’s manageable levels.
ATER Stock Setting the Stage
The company is keen to leverage its network of relationships with various large logistics companies to carve a path forward in the securing of an adequate number of containers for the upcoming year. The company will be doing so with a focus on sustainable reduced costs as compared to current spot rates. ATER stock is taking steps to leverage its shipping relationships, but changes to operations over the upcoming few months will be required to maximize their benefit.
Limited Visibility
With the global supply chain crisis affecting ATER stock’s ability to forecast its shipping costs and its capacity to secure inventory, the company decided to withdraw previous guidance for 2021. As the coronavirus pandemic continues to result in drastic shifts in consumer behavior, predicting patterns is difficult. The company revoked its net revenue and adjusted EBITDA guidance until it reports improved visibility and forecasting confidence.
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Future Outlook for ATER Stock
With the world hurtling towards universal immunizations, ATER stock is keen to set the stage for its recovery in the post-pandemic economy. The company is taking steps to ensure it stays afloat during the current challenging economic landscape. Investors are hoping for significant and sustained growth in shareholder value once the economy returns to normal and the global supply chain is restored.
