Grove Collaborative faces potential removal from the New York Stock Exchange
In a recent development, eco-friendly home essentials company Grove Collaborative has received a notification from the New York Stock Exchange (NYSE) stating that the company is no longer in compliance with the exchange's continued listing standards around minimum average share price.
The issue arises as Grove Collaborative's shares have fallen significantly, with the stock currently trading at 25 cents as of press time. The NYSE requires companies to maintain an average closing share price of at least $1.00 over a 30-day trading period.
This delisting notice comes six months after Grove Collaborative began trading on the NYSE following a merger with Toffler Energy Acquisition Corp. In 2021, the company had also inked a deal to go public with Richard Branson's Virgin Group Acquisition Corp. II.
Despite the challenging market conditions, Grove Collaborative has managed to post a net profit in the third quarter of 2022, swinging from a loss of $37.5 million in the year-ago period to a profit of $7.7 million. The company's operating loss also decreased, from $36.2 million last year to $22.6 million in Q3 2022.
However, the company's net revenue fell more than 18% year over year to $77.7 million in the third quarter. In response to these trends, Grove Collaborative has recently cut its long-term growth targets by nearly half, citing macro trends like inflation and consumers reverting to pre-pandemic behaviours.
Despite the challenges, Grove Collaborative has expanded its retail presence through wholesale partnerships with major retailers such as Target, Kohl's, CVS, and others. The company's shares will continue to be traded under the ticker "GROV," but will be designated with ".BC" to represent that the company is not in compliance with NYSE's listing criteria.
It is worth noting that other publicly traded direct-to-consumer brands, including Wayfair, Allbirds, and Warby Parker, have also struggled with reaching profitability. Grove Collaborative has six months to regain compliance with NYSE's listing standards, according to a Tuesday filing with the Securities and Exchange Commission.
In a positive note, Grove Collaborative raised its guidance for the full year, now expecting net revenue between $313 million and $320 million. The company's future plans and strategies to address the current challenges and regain compliance with the NYSE will be closely watched by investors and industry observers.
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