What happened
Shares of SmileDirectClub (SDC) were soaring 17.3% as of 11:20 a.m. EST on Monday. The big gain came after the company announced earlier in the morning that it was launching oral care products available exclusively at Walmart's (WMT 0.62%) U.S. stores and its Walmart.com website.
So what
SmileDirectClub stated that its deal with Walmart makes it "the first provider of clear aligner therapy to offer oral care products in mass retail." But those products don't include the clear aligners for which the company is best known.
Image source: Getty Images.
Instead, SmileDirectClub will introduce an electric toothbrush and a premium teeth-whitening system through Walmart. The company plans to launch additional products exclusive to Walmart in the first quarter of 2020, including toothpaste, a water flosser, and an ultrasonic UV cleaner for sanitizing dental care products such as aligners, dentures, and retainers.
This strategy enables SmileDirectClub to broaden its product lineup and boost sales by partnering with the nation's largest retailer. It also should increase brand awareness of its clear aligners that aren't available in Walmart stores.
Now what
SmileDirectClub was one of the worst-performing healthcare stocks last year, plunging nearly 48%. The deal with Walmart could help make 2020 a better year, but it's too early to know how the launch of new products exclusive to Walmart will go. Meanwhile, investors will want to see how the company's core business performed when SmileDirectClub announces fourth-quarter 2019 results within the next couple of months.
