SmileDirectClub (NASDAQ:SDC) stock is soaring higher on Tuesday as investors celebrate a new strategic plan from the company.
According to the company, these plans include expanding its SmileDirectClub Partner Network. This will have it focusing on improving its aligner products to reach a new market, enhancing its oral care product business, as well as putting SmileShop locations in areas with strong demand.
To go along with this, the company also announced it will be temporarily halting services in several countries. That includes Mexico, Spain, Germany, Netherlands, Austria, Hong Kong, Singapore, and New Zealand. It will continue to operate in the U.S., Canada, U.K., Ireland, France, and Australia.
SmileDirectClub says this decision was made due to the current global economy caused by the Covid-19 pandemic. To go along with this, the company will reduce its workforce to fit its new operating range.
David Katzman, CEO of SmileDirectClub, said the following about the news boosting SDC stock higher today.
“Though these decisions are difficult and will impact many of our team members who have worked tirelessly with us to deliver on that mission, these changes are the right thing to do at this time for our business so that we may continue to innovate and lead the industry to a better oral care solution for all.”
SmileDirectClub says that it expects its actions to result in $120 million in savings in 2021. The company also reaffirmed its full-year revenue guidance of $630 million to $650 million. For comparison, Wall Street is expecting revenue of $640.56 million in 2021.
SDC stock is up 1.5% after spiking higher when markets opened this morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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