Digital Brands Group Inc (NASDAQ: DBGI) recently announced its preliminary estimate of financial results for 2Q2021 ended June 30, 2021. The company projected 100% sequential revenue growth, backed by six and half weeks of revenue contribution from Harper & Jones, LLC. The news helped Digital Brands’ stock rally 13% during Thursday’s trade. However, the sequential revenue growth can also be attributed to its 1Q2021 financials, where it reported an 84% YoY decline in revenue. Digital Brands is expecting to see strong operating results for the 2H2021.
Highlights of the preliminary financial estimates
Digital Brands Initial Public Offering (IPO) in May 2021 strengthens its balance sheet with cash for working capital, which the company management believes in supporting significantly improved levels of operations in the coming quarters. The company reported an increase in wholesale booking orders in line with pre-pandemic wholesale levels, with a shipment of Bailey 44 products to wholesale customers starting 2Q2021. The company also reported inventory shipment, with the majority scheduled for an arrival between July and September for DSTLD. Digital Brands also noted significant development with an Amazon marketing strategy and overall marketing and advertising plan, with most of the spending starting fall 2021. The company is likely to report its 2Q2021 financial results by mid-August.
Digital Brands’ product portfolio
The company operates in the apparel industry with DSTLD (Premium Denim & Luxury Essentials), ACE Studios (Performance Luxury Suiting & Sportswear), And Bailey 44 (Contemporary Womenswear) being its key brands. DSTLD positions itself as a contemporary brand offering t-shirts, jeans, and other luxury-level basics that no individual can live without. Bailey 44 offers a sophisticated ready-to-wear, on-trend designer clothing range, with beautiful, luxe fabrics, for women. Inspired by Los Angeles’ urban architecture and iconic landscapes, the brand positions itself for classic elements, feminine designs, and modern details.
Digital Brands operate through both wholesale channels and a direct-to-consumer basis. Through its digitally native vertical brand, the company leverages consumer data and purchase history to offer personalized, targeted content and looks for the specific consumer cohort. In addition, the company also offers its portfolio clothing range at selected wholesale and retail storefronts, which allows it to drive new customer growth.