Arezzo

What’s happened? Arezzo announced Q2 FY21 results after market close
yesterday, with gross revenue growing 208% y/y, 44% above revenue in Q2
FY19, in line with estimates. Adjusted EBITDA grew 37% versus 2019 (beat: 7%),
driven by positive results in the U.S., and an increase in digital sales. We
recommend that investors hold positions and wait for the stock to retreat to its
50-DMA.

Celsius Holdings

What’s happened?  US Focus List constituent Celsius Holdings reported solid Q2
results. Revenue grew 116% y/y, beating estimates by 22% while adjusted EPS
grew 150% y/y, beating estimates by about 100%. We recommend that
investors hold the stock and add to positions if it breaches $83 on strong
volume

Relaxo Footwears

Commentary:
The company reported Revenue growth of 36.7% y/y to ~INR 5B, missing
estimates, mainly due to weaker than expected demand in southern and
western regions. Gross profit margin expanded 460bps y/y but declined 230bps
q/q and missed consensus estimates. Rise in raw material prices continued to
weigh on the company’s margins. After a strong EBITDA beat last quarter, it
declined 240bps y/y in Q1 and missed estimates by a huge margin. This was
driven by higher raw material prices and increased operating expenses,
particularly with respect to branding.

Varun Beverages

What’s happened? Emerging Focus List constituent Varun beverages reported
strong Q2 FY22 results. Revenue from operations grew 49% y/y, beating
estimates by 11% while EPS grew 119% y/y, beating estimates by 19%. We
recommend that investors hold onto positions and add more once the stock
breaks above INR 918.

Tata Consumers Limited

What’s happened? Emerging Focus List constituent Tata Consumer Products
reported mixed Q1FY22 results. Revenue grew 11% y/y, in line with estimates,
while Adjusted EPS declined 43% y/y, missing estimates by 20%. We
recommend that investors hold on to the stock and trim positions if it breaches
below its 50-DMA.

Emami

What’s happened? Emerging Focus List constituent Emami reported a solid Q1
FY22 print. Revenue grew 37% y/y, beating estimates by 3%. Adjusted EPS grew
99% y/y, aided by a weak base. Compared to the June 2019 quarter, revenue
grew 2% while domestic business grew 5% y/y, despite supply chain issues
arising from second-wave-induced lockdowns. We recommend that investors
add to positions as the stock is bouncing off its 21-DMA on high volume and is
actionable.

Fox Factory Holding Corp

Commentary:
Revenue grew 79% y/y, with growth accelerating from that in the previous
quarter. The specialty sports group (SSG; +64% y/y) and PVG (+92% y/y; 60%
growth compared to 2019) segments led gains for the company, with the latter
beating estimates by a huge margin. PVG posted excellent growth this quarter

after being affected by supply chain constraints in the last quarter. Channel-
wise, aftermarket sales (~50% of total) grew 63% while OEM sales grew 96%. On

the regional front, revenue in North America (66% of revenue) increased 86%
y/y, followed by those in Asia and Europe.

Medifast

What’s happened? US Focus List constituent Medifast reported strong Q2
results. Revenue grew 79% y/y, beating estimates by 10% while adjusted EPS
grew 120%, ahead of consensus by 20%. We recommend that investors hold
onto the stock and add to positions if it breaks above $337.

Bellring Brands

What’s happened? US Focus List constituent Bellring Brands reported strong Q3
FY21 results. Revenue grew 68% y/y, beating estimates by 17% while adjusted
EPS grew 167% y/y, ahead of estimates by 10%. We recommend that investors
add to positions as the stock has traced back to its 50-DMA.

O’Neil Consumer/Retail Weekly

Freshpet (FRPT; $5.91B marketcap): We removed Freshpet (FRPT) from our U.S. Focus List because of technical and fundamental factors. The stock has been under pressure recently, losing ~12% over the past month, and is clearly in a downtrend. It has broken below its 50-DMA and 200-DMA on high volume. RS line is trending downward with very weak technical ratings. Fundamentally, the company reported mixed Q2 results. Management raised FY21 revenue guidance, but successful execution is dependent on how quickly the company will be able to ramp up capacity given tight labor conditions in the U.S. market. The firm is also set to increase prices in the second half, which could impact demand for its products. See our report