Alliance Entertainment Holding Corporation (NASDAQ: AENT), a global distributor of entertainment products, announced an exclusive distribution agreement with Arcade1Up, a leader in home arcade consoles.
The deal focuses on retail and website fulfillment across North America.
Arcade1Up, known for its home arcade consoles and digital board games, claims to hold over 95% of the market share in the retro gaming niche. Its product lineup includes popular titles such as PAC-MAN and Mortal Kombat, as well as the Infinity Gaming line featuring digital versions of classic board games.
For the fiscal year ending June 30, 2024, Arcade1Up's sales through Alliance Entertainment exceeded $74 million. Jeff Walker, CEO of Alliance, expressed enthusiasm about the exclusive partnership, emphasizing the potential for sales growth and expanded distribution.
Alliance Entertainment has successfully marketed Arcade1Up products through various major retailers, including Best Buy (NYSE:BBY) and Amazon (NASDAQ:AMZN), by offering direct fulfillment services. This strategy has reportedly led to significant sales without inventory risk for the retailers.
Dora Dvir, CEO of Tastemakers, the parent company of Arcade1Up, praised the partnership with Alliance, highlighting the distributor's role in expanding retail relationships and managing supply chain challenges.
Arcade1Up's product range attracts a broad consumer base with its blend of nostalgia and modern connectivity, featuring Wi-Fi-enabled machines for online play.
Alliance Entertainment, with over three decades of distribution experience, aims to leverage its distribution capabilities to enhance Arcade1Up's market presence and fulfill consumer demand throughout North America.
InvestingPro Insights
As Alliance Entertainment Holding Corporation (NASDAQ: AENT) cements its relationship with Arcade1Up through an exclusive distribution agreement, it's important to consider the company's financial health and market position. According to InvestingPro, AENT's stock appears to be in oversold territory with an RSI suggesting it may be undervalued by the market. This could indicate a potential rebound opportunity for investors looking at the company's recent performance.
InvestingPro data reveals that AENT's market capitalization stands at $115.12 million, with a high P/E ratio of -49.1, reflecting the market's anticipation of future earnings growth. Despite experiencing a revenue decline of -5.62% over the last twelve months as of Q3 2024, the company's strong free cash flow yield, as implied by its valuation, suggests that AENT is generating sufficient cash from its operations.
Moreover, InvestingPro Tips highlight that AENT has been trading at a low revenue valuation multiple and has suffered from weak gross profit margins of 11.9%. These insights could be crucial for investors considering the stock's potential for long-term growth, especially in light of the company's strategic moves to expand distribution and sales.
Investors interested in Alliance Entertainment's detailed financial analysis and additional InvestingPro Tips can find more information on InvestingPro. There are 11 more tips available, providing a comprehensive look at AENT's financials and market position. To access these insights, consider using the promo code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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