Digital Brands Group, Inc. (NASDAQ: DBGI) is currently experiencing a remarkable surge on the US market, with its stock soaring by 207.85% to $8.82 as of the last check during the current session. This notable upswing in Digital Brands’ stock value coincides with the company’s recent strategic initiatives and fiscal projections.
DBGI has officially reaffirmed its fiscal year 2024 forecast, anticipating revenue figures ranging between $27 million to $30 million, internal free cash flow in the range of $6 million to $7 million, and EBITDA between $1.5 million to $2.0 million. Moreover, the company has made a commitment to refrain from equity offerings throughout the entirety of 2024.
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Digital Brands attributes its revenue scalability to the successful acquisition of Sundry, while simultaneously achieving operational cost reductions of an additional $1 million for the fiscal year. Remaining steadfast in its dedication to shareholder growth, DBGI underscores its commitment to abstaining from equity offerings in 2024, coupled with an ongoing evaluation of strategic alternatives.
This evaluation is particularly pertinent in light of the company’s assets and operational forecasts vis-à-vis its public market valuation. With a view to maximizing shareholder value, Digital Brands retains various options which it intends to pursue should the current market dislocation persist.
In a parallel development, DBGI has recently disclosed its intention to establish 50 retail outlets over the forthcoming years, with funding secured through internal free cash flow. Rigorous assessment of store locations and leases is currently underway, in collaboration with prominent retail developers.
These forthcoming retail establishments are anticipated to significantly bolster brand visibility, curtail customer acquisition costs, and elevate both average transaction values and customer retention rates for DBGI. Projections based on metrics from similar retail ventures suggest that each store is poised to yield annual revenues exceeding $1.5 million, alongside positive cash flow at the store level.
With the planned launch of 50 stores, DBGI forecasts an aggregate annual revenue of over $75 million, coupled with substantive store-level cash flow. The impending inauguration of these new stores not only marks a pivotal phase in DBGI’s retail expansion strategy but is also anticipated to catalyze revenue growth across its wholesale and e-commerce channels, drawing upon insights gleaned from comparable brands that have embarked upon similar retail endeavors.
