Freshii Inc. (TSX:FRII) stock fell 2.48% on November 13. Shares have plunged 35.7% month-over-month and are down 62% in 2018 so far.
Apart from some early momentum gained after its initial public offering in January 2017, Freshii stock has been an unmitigated disaster. The release of its third-quarter results will not give investors much hope going forward.
Freshii released its third-quarter earnings report on November 7.
Adjusted EBITDA fell to $1.4 million compared to $1.5 million in Q3 2017 and it reported negative 0.8% same-store sales growth over 5.1% in the prior year. This motivated the company to withdraw its outlook for all measures effective immediately, which shook its market price.
Freshii stock experienced major turbulence in late 2017 after it adjusted its outlook following some setbacks overseas. It is not uncommon for newly listed companies to adjust outlook early on, so analysts were not ready to push the panic button. However, the company has demonstrated that its reach exceeds its grasp when it comes to domestic and international expansion.
The company has plans to buy back up to 10% of its 25.6 million shares over the next year as it believes the current share price does not reflect its true value.
Freshii leadership continues to project growth going forward, but its credibility has been severely damaged since its IPO. The stock has veered into oversold territory but those seeking long-term growth should look elsewhere. Freshii has a lot to prove in 2019.
