Some interesting moves with BBN this week. Has captured the...

Some interesting moves with BBN this week. Has captured the momentum of the retail sector pretty well, but had some strong downward pressure the minute the market turned flat.

Lots of short term traders on the radar pushing it up, but the question is will they hold come the earnings report due ~Aug 11. The organic demand doesn't seem to be that high given most orders end up disappearing by the end of a given trading day.

Still not convinced it's bottomed out enough to close my short. With respect to their claim on remaining inventory being at 100 million, this would be underestimating their accumulation rate over the last 2 years which averaged an increased inventory of 21.5% from the previous year. Using this figure you would get 117.49 Million in inventory left. This also ignores the fact that their key June sale appears to have failed, which could contribute to an even higher number.

Their claim of 509-513 million in sales would put them up YOY by 1.1% (513 divided by 507.3 million).
Sounds good by the sales numbers, but when you look at their expected pro forma NPAT of 15 mill, then this would be a decline of 50.7% YOY (15 divided by 29.6). Hardly anything to be cheering about and still excludes "employee incentive expenses and SIGNIFICANT costs associated with business transformation projects and the effect of week 53 trading in FY23."

Given this decline in earnings, you would expect to see a substantial decline in the dividend payout which some may see as an incentive to buy. They have already decreased their first dividend to 2.7c and their final dividend may see a sizeable decrease given their earnings drop.

As an aside, people don't tend to have kids when financial struggles are likely to impact them and their ability to raise kids and high interest rates definitely ticks that box.

One to watch for sure, but I think the rally will be short lived. The short demand is still increasing and my broker went from over 1 mill available units to 0 in the last 1-2 weeks and as such I won't be closing my position just yet.

Data credit - https://www.shortman.com.au/stock?q=BBN