MyDeal (ASX:MYD) share price falls despite record November sales

The MyDeal (ASX: MYD) share price has struggled to hold onto its gains this morning following the release of a positive update to the market.

| More on:
flat asx share price represented by investor shrugging

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

MyDeal.com.au Pty Ltd (ASX: MYD) updated the market with record November sales and an expanding private label business on Thursday. The MyDeal share price opened 3% higher on the news, but has been unable to hold onto its gains. At the time of writing, MyDeal shares are down 1.53% to $1.29. 

What is MyDeal?

MyDeal is a pure-play e-commerce business with an online retail marketplace specialising in household goods. According to the company, it offers consumers a vast product range from independent sellers at competitive prices. MyDeal recently raised $40 million from its initial public offering (IPO) at an offer price of $1.00 per share. 

The MyDeal share price went as high as $2.20 on its first day of listing. However, its shares have drifted lower in recent weeks to their current $1.29 level. 

Trading update with record performance 

November was a record trading period for MyDeal with gross sales of $30 million, up 192% year on year and 63% month on month. The company's active customers grew to a record 778,867, up 236% YoY. Furthermore, 52.9% of all transactions were from returning customers, up from 49.7% in the first quarter of FY21.

The business delivered gross sales of $105 million for the first five months of FY21, which exceeds gross sales for the entirety of FY20 ($103 million). 

Private label business to drive margin expansion 

MyDeal's private label business, Duke Living, also achieved significant sales growth of 71% month on month, or $1.2 million, in November. The company's private label business sources products from manufacturers and/or wholesalers and sells them directly on the MyDeal marketplace as well as other marketplaces. 

MyDeal founder and managing director, Sean Senvirtne, believes that the higher margin private label is in its infancy with under 200 products as at today's date. He expects Duke Living to grow as it rapidly expands its product range. Expanding its private label product offering and sales is expected to deliver higher margins for the greater business while offering competitive prices for customers. 

Australia enters 'COVID-normal' 

The announcement highlighted Australia entering a period of 'COVID-normal', with easing of social distancing and lockdown restrictions. Despite these changes, MyDeal is continuing to see strong website traffic from all states and territories. The company's website visits from Victoria and the rest of Australia were up 174% and 168% respectively in November 2020 compared to March 2020. 

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »