Real Good Food Q4 Sales Miss Expectations Reflecting Pullback In Promotional Expenses

The Real Good Food Company, Inc. RGF reported fourth-quarter FY22 sales growth of 39.2% year-on-year to $35.65 million, missing the consensus of $49.26 million.
The company attributed the higher revenue primarily to strong growth in sales volumes of its core products, driven by greater demand from existing retail and club customers.
Gross profit more than doubled to $4.9 million, with the margin extending from 5.0% to 13.7%, driven by a decrease in the cost of raw materials, improved price realization, and productivity initiatives.
The loss from operations considerably narrowed to $(9.3) million from $(41.1) million last year. Net loss decreased to $(11.9) million from $(44.9) million in the prior year.
The company held $7.6 million in cash and equivalents as of December 31, 2022.
Adjusted EBITDA loss for the quarter was $(0.7) million versus $(3.9) million last year.
"While sales came in below our original expectations, this was driven by the strategic dialing back of promotional expenses on a non-core product in the unmeasured channel that would have diluted margins," said executive chairman Bryan Freeman.
Outlook: Real Good Food maintained its FY23 sales guidance of $200 million. It expects an FY23 adjusted gross margin of at least 24%. Adjusted EBITDA in the mid-to-high single-digit million range.
Long-term, the company continues to expect net sales of approximately $500 million.
Price Action: RGF shares traded lower by 2.58% at $4.90 on the last check Monday.
allotted

Earnings Calendar