Why the Ecofibre (ASX:EOF) share price is surging 30% higher this week

The hemp company’s shares have been on fire lately…
The post Why the Ecofibre (ASX:EOF) share price is surging 30% higher this week appeared first on The Motley Fool Australia. –

The Ecofibre Ltd (ASX: EOF) share price has continued its impressive run today following an interim sales update.

During early afternoon trade, the hemp company’s shares are fetching for $1.15, up 6.98%. This brings Ecofibre shares to a gain of around 30% over the last 4 trading days.

How is Ecofibre performing?

Investors are snapping up Ecofibre shares in light of the company’s impressive sales figures for its Ananda Professional business.

Ecofibre’s Ananda Health division is the number one provider of hemp-derived CBD for retail pharmacies in the United States. The business produces nutraceutical products, topical creams and ointments. There is even a CBD oil specifically for pets such as dogs and cats.

In its announcement, Ecofibre advised that its Ananda Professional CBD products have recorded their highest revenues since September 2020. The strong result has seen the business achieved sales of around $800,000 for the month of May. September 2020 sales attained roughly $900,000.

Management noted that while the sales rebound is positive, monthly results may fluctuate in the short term.

Ecofibre CEO, Eric Wang touched on the company’s progress saying:

This result reflects a combination of trading conditions improving in our core independent pharmacy channel, ongoing investment in new products and direct engagement to support our pharmacy partners.

As we enter a post-COVID environment, we are beginning to see many of our pharmacy partners begin to return to normal operations. Whilst there is still a lot of focus on COVID related activities such as vaccines, it is pleasing to see signs of recovery in our core channel.

Additionally, sales of the new Ananda Professional Chewable products and Women’s Health range have been encouraging. We also launched Ananda Professional’s new direct-to- consumer e-commerce portal with 70 pharmacies in early May, and the business is now focused on building momentum through positive early-adopter experiences.

Ecofibre share price snapshot

While today’s update has lifted Ecofibre shares even further, yearly share price performance has not been so kind to investors. The company’s share price has fallen more than 50% from the past 12 months and is down almost 40% year-to-date.

Ecofibre has a market capitalisation of approximately $397 million, with approximately 341 million shares on issue.

The post Why the Ecofibre (ASX:EOF) share price is surging 30% higher this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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