Why the Mosaic (ASX:MOZ) share price is rocketing 23% today

The Mosaic Brands Ltd (ASX: MOZ) share price is up over 22% after the company reported its lastest results for the first-half of FY21.

| More on:
rising retail asx share price represented by excited shopper holding lots of bags best buy

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

Shares in Mosaic Brands Ltd (ASX: MOZ) are entering the stratosphere today after the company reported a positive trading update for the first half of FY21. During the first 30 minutes of trade, the Mosaic share price hit an intraday high of $1.19.

Some profit taking has, however, since led the company's shares to retreat to $1.08 (at the time of writing), up 22.73% for the day so far.

What's driving the Mosaic share price?

The Mosaic share price is shooting the lights out today after the clothing retailer advised it has returned to a path of profitability following a robust performance for the first half of FY21.

For the period ending 27 December, Mosaic delivered online sales growth of 31% on the prior corresponding period. This was attributed to the company seeing its largest ever lift in online trading over the Black Friday event. Sales jumped up by 100% compared to last year's annual shopping day. Mosaic also reported it now offers more than 350,000 products online compared with 250,000 three months prior.

A strong Christmas trading period also followed the Black Friday event, leading the company to remain resilient despite COVID-19 renewed fears. While December sales were 4% lower than the  prior comparative term, Mosaic advised that its ongoing focus on improving margins resulted in only a 5.6% margin drop for the entire first half, when compared to the same time last year.

As a result of the improvement in trading conditions, the company expects earnings before interest, tax, depreciation and amortisation (EBITDA) to exceed market forecasts. It revealed that EBITDA is likely to come in between $40 million and $45 million, reflecting a 22% to 38% increase over the first half of FY20.

Mosaic highlighted that at the end of the calendar year, it had a healthy net cash balance of $65 million. This represents a huge uptick on the previous $4.5 million registered on the company's books last December and is likely helping to drive the Mosaic share price higher today. 

What did the CEO say?

Mosaic CEO Mr Scott Evans hailed the favourable result, saying:

As stated in 2020 we are seeing profound and permanent shifts in the retail sector. We have moved swiftly to embrace this by realigning our rental costs, store footprint and rapidly building our online offer.

Mosaic share price in review

The Mosaic share price has been on the road to recovery over the last nine months. In March, Mosaic shares fell to an all-time low of 19.5 cents, after reaching as high as $1.84 in February.

Based on the current Mosaic share price, the company commands a market capitalisation of around $85 million.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

3 small-cap ASX healthcare shares 'with strong prospects'

Fund manager IML discusses why these 3 ASX healthcare shares are likely to rise in value.

Read more »

Magnifying glass on a rising interest rate graph.
Share Market News

Will the RBA finally cut interest rates next week?

Let's see what economists are saying about the central bank's meeting.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a rough Friday to close the trading week today.

Read more »

a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.
Broker Notes

7 ASX All Ords shares elevated to 'strong buy' status in October

The brokers turned bullish on these ASX companies last month.

Read more »

A businessman compares the growth trajectory of property versus shares.
Share Market News

How ASX shares vs. property performed in October

The national home value rose for the 21st consecutive month while the ASX 200 dipped.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
52-Week Lows

Why is the Woolworths share price at its lowest point since 2020?

We haven't seen Woolies shares this low since COVID.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

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

Read more »