RYU Apparel Inc. (CVE:RYU) (OTCMKTS:RYPPF) Rising From The Dead On Revenue And Gross Profit Boost

A positive trend is developing around RYU Apparel Inc. (CVE:RYU) (OTCMKTS:RYPPF) price action after a roller-coaster first half of the year that saw the stocklose more than 40% in market value. The stock has started bottoming out from all-time lows, at the backdrop of renewed investor interest.

A spike from all-time lows comes hot on the heels of the company delivering stellar second-quarter financial results. The earnings report has helped underline the company’s core business as well as long-term prospects.

Revenue and Gross Profit Growth

Robust revenue growth and gross margin expansion are some of the catalysts that continue to strengthen the company’s sentiments in the market. For the three months ended June 30, 2019, the urban athletic apparel retailer saw its revenue skyrocket to $1.5 million, representing a 31% year over year increase. Revenues for the first six months of the year were also up by 32% to $2.7 million.

Operating expenses in the quarter were down by 30% to $803,026. The reduction benefited from cost controls implemented by the management as part of an ongoing restructuring drive. Further cost reduction, as well as improved efficiencies, is expected in the second half of the year.

Revenue growth supplemented by a reduction in operating expenses helped drive the company’s gross profit margin to 49%. The financial results marked the fourteenth consecutive quarter that RYU Apparel has registered revenue growth.

Some of the key milestones achieved that position the company for an impressive year on earnings results include the opening of a new retail location in Newport Beach, California. The company also closed a non-brokered private placement consequently raising more than $5 million in gross proceeds.

The strengthened balance sheet should allow company to carry out its phase II strategy that seeks to enhance brand awareness in new markets. RYU Apparel has already inked a partnership with actress and author Elisabeth Rohm who is to act as the company’s global ambassador. Ms. Rohm’s influence and connections should allow urban apparel retailers to reach a higher number of people going forward.

According to the Chief Executive Officer, Marcello Leone, the second quarter financial results stems from an aggressive Phase II strategy that has continued to drive brand awareness.  The focus going forward will be on achieving greater productivity from current retail locations. Management is also planning to enhance RYU Apparel digital marketing presence and e-commerce business as a way of creating new sales channels.

 Stock Outlook

A solid earnings report is one of the most important update that any investor would have wished for, as RYU Apparel seeks to reinvigorate its prospects in the market. While the stock has taken a significant hit, the earnings report paints a different picture when it comes to operational efficiency and growth in the core business.

RYU Apparel has already started to pick up some exciting investors’ support depicted by a bounce back from all-time lows in recent weeks. That said, the stock looks set to continue climbing the ladder from current lows as investors take note of its tremendous potential in the urban apparel business.

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This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

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