SmileDirectClub was one of the worst-performing IPOs of 2019. But the stock surged Monday after the company announced an exclusive deal with Walmart.
Shares of SmileDirectClub, which makes clear plastic teeth aligners, surged more than 25% on the news that it will offer a line of oral care products to consumers. They include an electric toothbrush, a tooth whitening system, toothpaste, flosser and an ultrasonic UV cleaner designed to sanitize retainers, dentures and more. The toothbrush costs $24.98 and the whitening kit is $39.98.
The products will be available at Walmart’s nearly 4,000 American stores and its website.
“We are proud to partner with Walmart, and look forward to disrupting the oral care aisle and category with an easy-to-use system of affordable, premium solution-oriented products for maintaining a better smile,” said Amy Keith, vice president of retail for SmileDirectClub, in a statement.
For Walmart, the partnership adds another brand that’s familiar to younger consumers — a demographic Walmart is increasingly targeting through its own web site as well as digital-only retailer Jet.com, which it bought in 2016.
SmileDirectClub is known primarily for working with dentists and orthodontists to sell clear aligners online as an alternative to traditional braces.
The company’s stock, which went public last September at $23 a share, has plunged because of concerns about intense competition in the dental care industry. SmileDirectClub has never posted a profit, according to its prospectus, and analysts expect it to lose more money in 2020.
Even with Monday’s pop, shares of SmileDirectClub are still trading more than 50% below their IPO price.
The company faces competition from Align Technology, a much larger and profitable firm in the S&P 500 that makes Invisalign braces, as well as from numerous privately-held upstarts such as Candid and Byte.
SmileDirect Club’s move into the toothpaste and toothbrush business also puts it in the crosshairs of subscription oral hygiene services such as Burst, Goby and Quip as well as established consumer products giants like Colgate-Palmolive. Quip also has a retail partnership with Walmart rival Target.