2020 is a bad year for XpresSpa Group (XSPA) company.
The company temporarily closed substantially all global spa locations due to the categorization of the spa locations by local jurisdictions as non-essential services during the coronavirus pandemic, which greatly reduced the company's revenue.
XpresSpa's revenue was $10.9 million in 2019, but it was only $0.3 million in 2020. So, the company's stock has continued to fall since it released its Q4 and FY 2020 earnings report at the end of last month, but the stock rebounded slightly last week.
The company launched the XpresCheck brand under its subsidiary to address the urgent needs caused by COVID-19. Including a rapid molecular COVID-19 test, a Polymerase Chain Reaction test, a blood antibody test, a rapid antigen test, and a rapid PCR test. The rollout of COVID-19 rapid testing which brought some revenues to the company over the past few months, but that's still too small.
However, the company also mentioned that the XpresCheck’s gross profit margin for the past few weeks is higher than even XpresSpa’s peak business performance during the pre-pandemic era, that's not only benefiting to existing XpresCheck operations, but also for its ongoing investments in new business.
If the company could resume its revenue to pre-pandemic levels, it needs to reopen all of its global spa locations as soon as possible, but the company did not give the timeline for that. The company said it will re-evaluate possible re-openings of select spas in the future on a location-by-location basis, based on the economic viability of each such location. This is a pressure test for the company's finances and its stock.
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