Charlotte's Web Holdings, Inc. (OTCQX:CWBHF) (TSX:CWEB) announced its first quarter financial results Wednesday for 2024. The Colorado-based hemp extract wellness producer faced a challenging quarter, reporting a 29% decline in revenue to $12.1 million from $17 million in the same period last year.
Q1 2024 Financial Highlights
- Revenue was $12.1 million, falling 29% compared to the $17 million of the same period last year.
- Net loss was $9.7 million, or $0.06 per share basic and diluted, compared to a net loss of $2.9 million, or $0.02 per share basic and diluted, for Q1 2023.
- Adjusted EBITDA loss was $4 million, compared to the $3.3 million in the first quarter of 2023.
- Gross profit was $6.9 million, compared to the $9.9 million of the same period last year.
Despite the dip in revenue, the company managed to maintain a relatively strong gross profit margin at 57%, totaling $6.9 million, down slightly from 58.3% or $9.9 million in Q1 2023. This was supported by improved manufacturing efficiencies and cost controls.
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On the operational front, the company is optimizing its business-to-business segment and has redirected its focus toward the medical channel, which has shown resilience amid market volatility. This strategic pivot is part of Charlotte's Web's broader 'True North' initiatives aimed at rejuvenating its business model and consumer engagement.
The company's selling, general and administrative expenses saw a reduction to $15.3 million from $17.5 million. This is part of a broader initiative to slash approximately $15 million in costs throughout 2024.
Charlotte's Web's efforts to stabilize its financial position are underscored by several strategic adjustments, including the in-house production of topical and gummy products expected to commence in Q4 2024, which are anticipated to improve operational efficiency and cash flow.
Management Commentary
"The first quarter of 2024 started slowly in terms of sales volume. This is being addressed with solid progress in our 'True North' turnaround initiatives," said Bill Morachnick, CEO of Charlotte's Web. "In Q1, we pulled down spend on our paid media in order to evaluate each program and identify the highest performing campaigns moving forward. We are on schedule to launch our new e-commerce platform migration in Q2, enabling more effective tools and agility. Additionally, we are excited about our recent innovation launch, 'Stay Asleep' CBN gummies, which have received a positive response from consumers and showcase the importance of our R&D and innovation pipeline, which we expect to expand in the latter half of 2024."
Jessica Saxton, CFO, remains optimistic about the company's operational adjustments. "Given our current revenue challenges, we continue to act with agility to further optimize cost structures across the company, streamline operations, and eliminate inefficiencies," she said.
CWBHF Price Action
CWBHF's shares were trading 4.31% lower at $0.187 per share at the time of this writing around 11:15 AM ET Wednesday.
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