cbdMD, Inc. YCBD YCBD reported its quarterly and full fiscal financial results on Friday for Sept. 30, 2023, revealing a 27% year-over-year drop in fourth-quarter net sales to $5.7 million.
The company attributed the revenue decline to "industry trends, a reduction of marketing spend and lower wholesale pricing initiatives with our new high-strength products that launched mid-September of 2022."
Total net sales amounted to $24.2 million in fiscal 2023, down from $35.4 million in the prior year's period.
"We knew it was going to be a challenging year while we reset the business and are proud of the way our team executed on the challenge,” said Ronan Kennedy, cbdMD’s interim CEO and CFO. “Despite barriers at retail due to our category, we continued to invest in developing new strategic relationships for the cbdMD brand and are excited to announce that cbdMD launched into 160 Sprouts Markets stores across the nation this month."
See also: cbdMD Reports Q3 2023 Performance: Net Loss Improves, Focus On Cost Management & Strategic Growth
2023 Financial Highlights
- Gross profit totaled roughly $15 million, down from $22.3 million in fiscal 2022.
- Gross profit as a percentage of net sales was 62%, as compared to $63.1% in the prior year.
- Net loss amounted to approximately $23 million, down from $70 million in 2022.
- Operating expenses totaled $24.2 million, down from $40 million in 2022.
- On Sept. 30, 2023, the company had a working capital of approximately $3.4 million and cash on hand of approximately $1.8 million as compared to working capital of approximately $10.7 million and cash on hand of approximately $6.7 million on Sept. 30, 2022.
Q4 Financial Highlights
Gross profit as a percentage of net sales was 62.1% compared to 63.8% in the prior year's period.
Operating expenses totaled $5.5 million, down from $7.9 million in the same quarter of 2022.
Non-GAAP adjusted (loss) from operations was $572,125, compared to $2.2 million in the same period of 2022.
Now read: cbdMD Q2 2023 Results: Net Loss Improves, Costs Plummet
Other Highlights
In 2023, the company launched hempMD and ATRx brands, expanding its product channels into Amazon US and other more traditional consumer products channels that have historically precluded the sale of CBD products.
"The ATRx brand is designed to provide functional, non-cannabinoid health and wellness solutions to our customers, with an initial focus on the emerging functional mushroom market," Kennedy explained.
cbdMD also intends to launch these new brands into the Amazon UK network in 2024.
"We are already in discussions about expanding the ATRx line in multiple brick-and-mortar retailers. Both of these new brands provide opportunities for us to expand beyond current distribution and marketing channels furthering, efforts to reach new customers," Kennedy said.
YCBD Price Action
cbdMD's shares traded 7.11% higher at $0.7333 per share during the pre-market session on Tuesday morning.
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