I don't think low barrier to entry is the risk to worry about...

I don't think low barrier to entry is the risk to worry about with DSK. While its a low barrier to start a small candle store the investment in a brand, a retail network, stock, online platform and distribution is all the moat here.

The main risk as I view it are

1. How do sales cycle i.e. can it grow or even keep on par with sales at the 1st-2nd quarter of this FY.
2. Once all the government stimulus stops flowing around the system how does this effect sales.
3. Does the ability to travel again or higher interest rates impact customers spending at DSK.

My view on these risks are:

• With the addition of new stores, all retail stores being open, improved online platform, move to higher margin products and stickiness of rewards program they can at least match these last year sales.
• They are currently being priced in my view as if the sales are going to drop back to pre covid levels. Even if they don't match sales as I say above I find it hard to think they would be any worse then say 20% behind this years sales which would still mean shares are mispriced currently.
• The other ace up the sleeve they have is a great opportunity to grow by expanding overseas. With no debt and great free cash flow it would seem silly not to make this move.

DYOR The above is not intended to be financial advice