A view of atmosphere at the launch of SmileDirectClub’s Smile Kit at Macy’s Roosevelt Field Mall on June 30, 2018 in Garden City, New York.

Gary Gershoff | Getty Images

SmileDirectClub posted a bigger-than-expected quarterly loss on Wednesday and said it expects to operate with a smaller shop footprint going forward, with the company focusing on dental impression kits business amid the COVID-19 lockdowns.

Shares of the company were down 3.5% at $7.45 in extended trading.

The online dental company sells clear plastic aligners prescribed by doctors by taking an impression of customers’ teeth either at one of its over 400 SmileShops or through impression kits that customers can purchase online.

However, with government agencies requiring non-essential medical and dental procedures to be delayed due to the coronavirus outbreak, SmileDirect temporarily shut most of its SmileShops across the world in March, expect those in Hong Kong.

The company now expects the kit business to be a stronger percentage of the overall business, SmileDirect Chief Executive Officer David Katzman said on a post-earnings call.

The kits business may grow from less than 10% now to over 30%, the company said.

SmileDirect, which last month announced plans to slowly reopen its SmileShops in May, said it benefited from operations at its teledentistry platform and its remote kit business through the initial setbacks due to the virus.

For the first quarter, the company reported a 12% year-over-year increase in aligner shipments at 122,751.

The company withdrew its previously issued 2020 view in April, on account of COVID-19-driven unpredictability.

Total quarterly revenue rose nearly 11% to $196.7 million, but fell short of expectations of $219.5 million.

Adjusted for the impact of Covid-19, revenue would have been over $235 million as SmileDirect only shipped aligners for 87% of the quarter and increased its reserves by over $12 million as a result of the economic uncertainty, the company said.

Net loss attributable to the company widened to $29.3 million in the first quarter ended March 31, from $20.5 million a year earlier.

The company also reported marketing and selling costs of $142.3 million for the first quarter, up from $95.7 million a year earlier.

On a per-share basis, the company reported a loss of 28 cents versus analysts’ expectations of a loss of 19 cents, according to IBES Refinitiv data.