Last night I mentioned JB stores are low on stock again and that makes it difficult to estimate sales for the second week of Feb after surprisingly strong numbers in the first week. We need to keep in mind that this method only gives us a rough guide on JB bricks and mortar sales, is only a small sample of 13 stores (that I use) , excludes JB online, Spark, Leading Edge and Allmytribe sales. So any peaks and troughs of JB B&M sales numbers in 13 stores, especially when affected by store stock levels should not be impacting overall sales to the same degree. This morning I had a look at Applyzer and I am seeing some very positive trends. The Download Rankings chart (Australian Navigation) gives us info about how the Allmytribe app downloads is ranked against other apps in the navigation category. Downloads would be proportional to how many watches are sold. So an upward trend most likely represents an increase in watches sold (or it could mean that all other apps on average have had fewer downloads and that seems less likely). I have added a few vertical red lines to the chart showing dates and brown horizontal lines showing a rough average rank position for each month. The first part of the chart shows what I'm sure we all expected. A big jump in rankings (in line with a big jump in watch sales) in December relative to November. December had a big spike into Christmas and then a sharp drop immediately after Christmas. No surprises there either. What has surprised me is what has happened in January and February. I expected the sharp drop post Christmas but I didn't expect that the download ranking position for January on average would appear to be at least as high or a little higher than it was in Dec. That could be partly explained by the discount offered in January but even with that discount I thought Jan sales would not be able to match Dec. The biggest surprise though is that so far for Feb (and we are now half way through the month), average ranking position for Feb is looking at least as good as or slightly higher than Jan. That's after the discounting has ended with the price of the watch back up to RRP. I see that as a big positive and it is now looking to me that even if we see a moderate decline for the remainder of Feb and then remain stable through March, we will still see quarter on quarter growth from the December quarter to the March quarter. I think that will surprise the market. If March sees an improvement again on Feb, that will obviously be even better. From company releases we know that 9,000 watches were shipped to B&M stores for Nov and Dec and we know JB was very low on stock by Christmas. If you allow for some smaller sales in Leading Edge in Oct, and three months worth of sales for Allmytribe (would have been at least 1,000 watches IMO for the Christmas quarter), around 10,000 watches were probably sold in the Dec qtr to consumers. If the March qtr is a little ahead of that and we then see growth each qtr after that, then sales in Aust/NZ should be at around 40-50,000 per year starting from the Dec qtr 2018 and through to the Sep qtr 2019. Then we should see a big step up in the Dec 2019 qtr for this years Christmas period. I.e. this calendar year is shaping up to be 50,000-60,000 watches sold in Aust/NZ alone. UK and Europe could at least double that number (UK alone could do that) and we could realistically be at around 150,000-180,000 watch unit sales this calendar year, all based on current trends to date and the relative population of UK to Aus/NZ. On these numbers, this is a very realistic potential for at least a 5 or 6 bagger over the next 12 months. Risks remain as with any stock but this is shaping up very well.
