cbdMD, Inc. (NYSE:YCBD) announced its financial results for the second quarter of fiscal 2024, ending March 31, 2024. Despite an increase in operational losses from $1.4 million in Q2 fiscal 2023 to $1.5 million in Q2 fiscal 2024, management remains optimistic.
"Transformation is not always linear, and while our second fiscal quarter 2024 results fell short of our ambitions, we believe the operational changes we've enacted are set to propel us forward," Ronan Kennedy, CEO & CFO of cbdMD, stated.
Cost-Cutting Measures And Financial Projections
cbdMD reported implementing cost-cutting measures projected to save approximately $2.4 million annually by August, including staff reductions, renegotiated vendor contracts and consolidation operations to save $0.6 million per quarter.
These efforts aim to position the company for positive cash flow in upcoming quarters.
"Our shareholders have spoken: profitability is imperative. Their input has further fueled our commitment to making tough yet crucial decisions, setting us up for success by the fiscal year's end," Kennedy added.
Key Financial Metrics
- Net Sales: $4.4 million for Q2 fiscal 2024, down 30% from $6.2 million in Q2 fiscal 2023. For the six months ended March 2024, net sales were $9.8 million, down from $12.3 million in the prior year period.
- Net Loss: $4.0 million, or $1.35 per share, in Q2 fiscal 2024, compared to $2.3 million, or $1.74 per share, in Q2 fiscal 2023, largely due to a $1.4 million non-cash contingency liability increase.
- Gross Profit: 59% in Q2 fiscal 2024, compared to 64% in Q2 fiscal 2023, impacted by a $0.44 million credit issued to a wholesale customer.
- Wholesale Net Sales: $0.75 million in Q2 fiscal 2024, down 44% from $1.3 million in Q2 fiscal 2023.
- Working Capital: $3.2 million (excluding accrued preferred dividend) and $2.1 million cash on hand at March 31, 2024, compared to $4.1 million working capital and $1.8 million cash on hand at September 30, 2023.
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Outlook And Future Prospects
cbdMD is optimistic about revenue growth in the third fiscal quarter of 2024, expecting it to surpass the March 2024 quarter. The company's ATRx Platinum line's national rollout at GNC is seen as a key growth driver, expanding its market presence into functional mushrooms.
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