LSF - Earnings call transcript Q1 2024

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Operator

Good afternoon, and thank you for joining the Laird Superfood First Quarter 2024 Financial Results. My name is Kate, and I will be the moderator for today's call. [Operator Instructions]I would now like to turn the call over to Trevor Rousseau.

You may proceed, Trevor.

Trevor Rousseau

Thank you, and good afternoon. first earnings Superfood's webcast. call Laird to quarter conference XXXX and Welcome Officer. today's Laird Anya Officer; Financial Vieth, are Hamill, President Chief On Jason Executive Superfood's call and Chief our and the By company's today now, market close. have everyone access after first earnings release should quarter filed to we available of www.lairdsuperfood.com.Before this within may forward-looking please is call, website Investor on the section during statements federal the management of It note securities context Superfood's that Laird Relations at begin, course laws. of the make on based risks could actual from are These expectations involve results forward-looking current materially statements beliefs and these management's and and differ in uncertainties cause those statements. that described to the Please other discussion call filings Jason. refer a and and detailed release of for today's to with these the turn uncertainties.With over press to SEC risks I'll that,

Jason Vieth

Good officially another who again. growth excited to you to afternoon us Today, Superfood Trevor. Laird become has the thank and turnaround I everyone again. big story a share am joined has once Thanks, story that

we sales first the year the impressive of ago. same period the versus an by quarter, XX% During business X our grew net

was quarter growth XX% rate in by those product in sales driven and management. Amazon across effectiveness our marketing inventory period way sizable grew led despite astounding this during which spend our e-commerce decrease the led continued improvement periods. with XX% year-over-year an Our this segment, another by growth availability, marketing

is where buyers subscribers. made our to XX% up subscription buyers repeat DTC into our growth will the buy our biggest to convert of driving unauthorized our industry business to in Amazon viewers out sales. hone by of being now continued execution, ensure into brand are filled business, we to continue demonstrate buyers, team.Perhaps impressive to Laird ability box half DTC buyers the be We that observers the sales repeat and and platform have winning surprise our resellers into Approximately of Superfood our our own our products on DTC

tips orders leverage on focused with retail encouraging base, that scanner e-mail giving website. our can of without And our arrival branded during the quarter, and their appreciate the at where to remain price that QX, Even 'XX. last for team the we health have able Reece, Over increase we creating up brand for stories consumers months. a interact than is share them year-over-year best-in-class even wholesale highly to our XX-week Laird competitive platform during it lifestyle and consumer reported the XX our the more XX% relevant, since to is a months, continually is sales been Superfood plus of a original grew sales ending benefit our was door.On create past done to March the wife and his and U.S. by net and period we and food were with website sales this across reason nutrition Hamilton a for as more our significantly during their by Gabby authentic and continuing Net thereby from our wellness, provides customer and care our brand. website and handle XX% interaction Scores Promoter Laird with content which clearly recognize their impressive advantage we service side which our more business, net Further,

sales, internal our retailer large distribution inventory deloading discrepancy rate between X growth scanner and of there a was the across clearly data Given our LSF' partners.

products, led our and retail. move by across our expect combined both channel at latte strength category our during instant see we Within units as this which measured our in terms largest QX business to and grew coffee wholesale, so, business forward. categories of continued to of And now be all in we dollars

velocities we product by supply behind continue also event.On driven to Our extremely following results year's business the strong procurement, as operations chain our last and our across in trade as continues our sales healthy, spend. our demonstrate side, see improved team in execution club remains production favorability to well quality distribution, growth and

behind able gross to. supply own better internal marketing high that activations. were able it our expect we the in we expense our for point, XXXX.As team planned previously, first said, we write-down margin increases to which are we strategic points XX% a during fund positive various by the year activities as during write-down to been have was in for was a subsequent rate the QX, ahead is executing able milk value offset chain cost a was to previously ingredient at to significantly than be to better powder. driven be procure do several able able Our coconut our again we more shared and that QX quarter quarter as a this effectively actually level, projections execution throughout we the investment to leveraged at With was and recognition us our are early at quarters. commodity That largest had of That a efficient reduce us our despite now planned the marketing able year-over-year been of during result once so

which was dramatic quarter of Our a from marketing XX% expense years. represents over decrease sales, for obviously just prior the net

press solid with into this move the quite eventually return we our first to and this brand midterm forward, are in the where in single quarter, and a high opportunities down us is the stands. of continue the with front low-teens digits. into we pleased to growth As to goal But currently

it this time from our quarter over Laird one for sales on next turn pleased very With XXXX. in over base now to to mind, project consumer ourselves I In and and think various that, growing pace our more which Anya internal expansion.With exceed now our are I we in in XXXX detail. stated fact, to are chapter where quarter we to preparing it's growth for results to results story, storyline the we will discuss goals first a a our across on channels executed our the turnaround of plan are change first the with Superfood

Anya Hamill

everyone. and welcome, Jason, Thank you,

sales work has team's last every positioned our $X.X exceeded on transformed XX% for pleased grew of sequentially the the growth. of plan the were results months business the key million I quarter over prior and financial foundation our up period fourth first in $X.X am that operating metric.Net you in our XXXX. to to quarter XX with and have to versus share million first compared our Our by $XXX,XXX quarter year XXXX

sheet. XX% E-commerce team sales to subscribers XX% distribution growth and Jason net growth higher driven platforms XX% strategic by DTC quarter, the expenses Amazon XXs Versus shift to order As on contributed our indicated, and gross gross fourth lower was second the rates XX% margin the in grocery, continued the period, total and of in sales. Amazon spend.Now, growth. third-party to by coming million and our expanded quarter spending. QX which of XX% the sales by XX% year-over-year million compared was to QX With total growth conservatively is in quarters.Operating spend.Net This XX-point reflecting quality our DTC last our transitioning and driven year. a both spend.Gross expansion net $X.X primarily expense year. supports repeat lapping $X.X by due driven of driven our in was and impressive inventory lower year-over-year spend. investments spend. timing of improvements was and continued in club, margin broad co-manufacturing was in wholesale to on the value row continued positions, sales and first by million, expectation in Wholesale discount We sustainably loss and costs, or turning increase XX%, in and G&A the net ended orders, better of respectively. net debt platform above gross growth channels increase event by platform people period as related net accounted of a quarter G&A where as the contributed drive manage able marketing increased around continue for the reduction first XXXX, efficient marketing delivering planned to last margins at the and in discipline strategic and sheet. with promotional balance least increased execution stepped-up of box velocity quarter same to as fueled as product which of our and first improve higher reduction is versus of a sales sales, our our due e-commerce of a in for our and media win steady This quarter QX the no well we well the in achieving higher decreased is balance the in year-over-year quarter margin, cash improvement quarter model which million percentage the to $X.X distribution lower buy prior a XX%, by for tremendous more was benefit efficient promotional the and as loss was year $X.X upper basis XX% to and was the first

up or by Also, it. XX% expenses XXXX, $XXX,XXX, last as investment inventory was to entered payout $X in our our This burn In the rate, higher due marketing the our was but reduced credit is will historical first better to additional burn and to cash sale which Our $XXX,XXX just allows stepped-up agreement compared significantly obviously of liquidity receivables. to supporting access QX due during than utilize quarter than us is by we continued while XXXX.Our company to in improving facility rate in should million discipline been the including revenue cash choose operating expensed of we fully and working source that accounts a bonus, capital, XX% quarter, also which have cash into reductions growth. of the significant to inventory. consumption managing our create steadily year-end in backed

to enough confidence operating X our We XX $XX XX point of cash team now to now strategic XX any our I improvements the now, turn million initiatives implementing closing that these least which to Overall, margin our have representing results At XX% upper intended of Jason the gross XXXX. XX%, profitability. the XXXX been growth million, represents that point, net into XXXX.And end business last grow And XX are this breakeven year. make results. our our to drive months and versus to over has will strengthen are to during we discussion back increasing guidance for are sales versus to the and points projecting continue continue achieving remarks. at we we that us full of to we improvement a fund our as project operations prior towards We for $XX year expect

Jason Vieth

and to that satisfying past listening for we us ready been good now has our to is who hope LSF that the far, I everyone while during years. been to these on you'll you yet the supporting even results we've so quarters. agree what we prepared And remarks. during more team motivated thank and to achieve we Anya, outlined questions. made Operator, it's expectations you, Thank X those for our to excited are extremely come.This concludes open call and to the are

Operator

from question line [Operator with Canaccord comes Bobby the Instructions] Burleson Genuity. The of first

Bobby Burleson

story. Ozempic Congratulations. bigger is within there's first is definitely this dynamic whether Laird question understand shifting not and a health growth food And, this trying food play my and It medicine role to is things kind like that for sounds just I phase. are growth to or to guess, of

Jason Vieth

Bobby, eat convinced us it's truly impactful a certainly, medicine. be niche. the -- the that's smaller craze are think nation, consumers Jason. because out, today. that's for going it's take to would And I not kind at very taken us. it's say, Ozempic to whatever what cure sizable seeking want, Yes, growing always you pill jumping still the the it's niche. not Thanks afterwards of a just to did mainstream than you it's yourself. And mainstream and they Ozempic that a to are We But all this largely the

opposite to the consumer We ultimately would trying much are determines to my going or the very they the my fate direction future put be body on what the I that's to into focused that say, to says what create. I consumer, problems solve very going as relevant is opposed

direct because it detached competitors So that to we Laird at direction. with Superfood frankly, going coming but our on. watch in in interested portfolio regards it, and are food own from a what's very from consumers interested really our different it the We're are and

Bobby Burleson

Fair Yes. question guess, I probably of the enough. narrow in I a asked too sense.

have of the people to on CPG, greater I a a see there's are food promote paying maybe people greater what and ingredients, trends to to is getting driving attention a we're medicine to consumers but think was, is starting mistakes kind making, result you health awareness I these not of as awareness lot where dynamic vanguard greater connection. are audience of a was outcomes where receptive part a fixing more there maybe there, guys things you're where within a degree because you at can in that of of a the

Jason Vieth

came I then the change I for that come expound a analog forefront long I've came that brands that talk not an for honest, I'm big bigger at who really question. little the leading this been food, have say from for food I I to have the after I and eat or love really would appreciate but who and interesting. in not been frankly this companies industry. at Superfood understanding It's at as from I I'll But really Foods -- use couple and -- Bobby, understanding, charge some way I twist. came it, came other the I Laird I'll of time. as give eloquently in us. the been really I Yes. have people better. and from hours And placed came of of When forefront of either on not in they could on if bit. you the guardrails that, been Gabby, didn't Laird but to a the WhiteWave a

natural That's I a we Why we can lot flavors?" taste to we food started where food man, not taste is, And said, a by the aren't a as make make to like in we are flavors poison bodies space, better. I'll put flavors have here. they here, when natural many so, really "Oh, natural actually that food and example, the to down flavors, over is product, chemically you dirty really our using I they're going food reality And hitting got supposed are so, food all and the nerve almost this into. an food with And they better natural just example. to tastes chemical passed among -- And amongst a is this on give the maybe a of natural And but food is me bad one little especially and the cases, big frankly, that, natural. decades the now.And extracted path, they all. taste go derived from were that you're into using go secrets that in bit residue reality

of a of now. tomato. residue a grow, You to take certainly you times many but during week, many as over your day is might health on, comes of small that the but broadly a And body increasing suddenly, was little you understanding that the back specific on amount it's to there don't month, that problems, call and of those really And recognition many you your And as me day that's your Laird down can't the flavor that you tomato at you you more other over bit a a and across why. it ingredients put chemical times your pack was chemical to your every we're naturally you you Hamilton in and of from explain used but issue days able extract an more flavor", in around discussions the can small a life, early a flavor several these that but told that "and bit road, and understand. we year decades had weeks flavor, amount, have products that it starting chemical got awareness the natural natural and extract -- derived because of marketing look

that over When at the and look using Greens our always recognize that the you vegetables, not a with you the competitors, and you not there, competitors, talk you Greens, we're our we're at would pack, a doing that's case.So you If ingredients look with it about food. we relative all head-to-head turn starts supplement, we're marketing. expect, that fact what in are fruits we're and of to and the as

be to careful, to with -- with diet in regards to and the to fact, don't preached people always have to consuming. their they usually You don't like they're that be regards products

the a and dietitians So we're more doing that see more researching And others receptive I they've you is beginning finding question a and podcasters that that number more And ills think to in And Rogan in just a the that of and great the from space, nuanced neuroscientists we're are the this issues. is fashion. and of these foods. and But of are searching more certainly really Bobby. such we're people There secret. the at recognition eating your about getting been as and Joe people one. it, food people receiving vocal revolution are more and their

of go lot research, in there's of the secrets into of. food people to what aware industry putting that become a to whole starting body your are you're You the

Bobby Burleson

doing growing your conventional, maybe if inflection when like I see curious At fantastic. conventional but and quick growth follow-up has in there, baton in up in to a e-commerce they big point a to Obviously, wanted of get there a picked momentum wholesale. channel. space distribution what just of do you're a handed you some you particular on grocery that expanding on potential guys and kind the That's shelf have see I we channel? a lot work ask way. have know Amazon maybe

Jason Vieth

of this at to strategically question. it's way great looking because -- expensive we is been we're this conventional at way Yes. destination last That's a that The kind play. as looking our really we've follow-on the --

lot smaller for of challenges there There's and obviously margin Your turns are companies. a to need competition, come quickly.

we've into couple So over the space years, of Bobby. tiptoed that last

As us. natural good been you know, the very channel to has

attributes with have Our us as quickly a product That in the of space we consumers identify kind that and shop. mind.

question. well in seeing quarters And put say still recognize sitting away expanding big us so, not -- And we full really nice throttle at space an I'd throttle, the exact and What year But that there a of type pie at and to a asked the tremendous want turned up exactly really was of natural strategically, being right. do trend is a DTC ready we you that out even mainstream growth space. of there. go that consumers you're medicine asked turned do corner is to us your more We come least still up because to piece catch has on to if couple rapidly. doing and you on channel the to to implemented really we're those that there.The you're us and to food conventional of little the bit incredibly increased begin about about the as from with for last allow in in identify initiatives Amazon. let that consumers mentality want

say starting really So from to that in make particular out headway major I we're would year a still channel.

Operator

The next with from George of Partners. Capital question comes line Kelly the ROTH

George Kelly

really another on quarter. nice Congrats

rapid reported could growth we just bit little start, there? inventory in XQ? has So expand a of you confused been that I fill driving curious if you growth on could Amazon. a just if maybe was been component really that a what's on And still maybe I'm

Jason Vieth

we're excited thanks Amazon. really It's hear for you. from about good Yes. the George, Yes, question. to

that to have at half for channel Amazon. strong growth an opportunity expected that first the we in we And year. the know relative nausea in we year, rate. growth the I was about there inventory. where you of know last [ half that this pull it knew we quality last had of Honestly, we We planned about at to year ] talked all the to event had And

a only but So detail, we as the having on I won't slow products, into up pull to so much ended creamer inventory our creamer pull products. out

growth opportunity that are on we an of year, we quarter.We is expectations lapped as was strong in number saw of this but -- what our there really a knew this it across well we platform excess segments. we different in So

couple creamer products doing our as the did was And well asked you things everything well, now. really our happened. just of back got our but coffee, only One Greens, not right mushrooms, that about. into our place a So is really bars, inventory on performance we Amazon

job an a light of the done exceptional say I reselling a out DCs. restock their especially So products little job gone had our resellers. because But to space. to into -- for buy in Team excellent and team we've where would there's surging they've micro in we our won an has managing, done demand back has and lag of also bit done of box that

game with you another happen a at You're price little sale. pops your X a up they one as -- pick It's or product and local always resellers. on of whack-a-mole, bit one to products fighting honestly, where then down grocery X a at of discounted up knock their one

at same and of that we've got -- we operationally. really on we've found the So we've that that And down. some hired I We've help created executing ads been been returns with some to that. doing some really a to well invest, really say agency of nice execute. been strong job that did And just an we've we time, would channel the able search the of knocking that we've -- we

and And so, quarter. commercial for really there execution operational we've great had the last

George Kelly

I be helpful. how behind then you're a the I'm -- So sort from like question, like business of of that's you what's going That's if And continue that's to to case, continue how your would broaden the going plan your year-over-year. I'm wondering anything that lot to I'm kind is, are to next expectation me keep there to driven it? pushing Greens growing hydration product? the about wrong. wanted If helpful. grew just My sense -- maybe And ask Correct product.

Jason Vieth

Yes.

to the created Daily country Reds, a of product And stay X Greens and I kind a that for George. that, of what with I'll of for heart category, best tasting, to moment They are out our similar those market the just the the been to we're largely vegetables. a fruits both health cost I is finding and Greens, products the product the significant Greens of is called say on that growth. our the best there marketing in And has the if which has been And us. we intuition providing the Greens, is made we're as cost Your space. product. And Greens based such. finding be some the is lower been than more.And from It competitors. that the that's because structure, exactly started for is of the that, a a efficacy probably getting product that's we're a lower exclusively cleanest on are in that's them reds, just We're market price not there's launched opportunity XX our each this sister can on Daily -- And would a the right, have market. or to -- product. at And -- think than the what turning we ancillary tremendous

We a them. is daily have that's great consumers us with over marketing we're that that they on And relationship we're finding that strong on subscribers activations some really product, great really flip really stick basis it, some a turns that, become once with doing. into to what long-term coming behind

George Kelly

online? sold product And is that exclusively

Jason Vieth

reward our website, DTC own started. I We we Laird where It's Superfood to generally our first offering early a it's -- on and that this is by is our from and would not. launch But exclusivities take say launched It's those launch learnings consumers the broaden website. use as shopping also on pattern that We as for way there. behind it to our site. we a then all

in fact, retailers, into of a space. have And food launched it we natural in growing we've number Amazon. of retailers the So out in number now it

George Kelly

a should then map to much that And comes annual last getting to just for The now. Great. guidance your year I'm it Okay. sort out while look of influx quarterly? when question revenue been seasonality? there trying and has kind your of business Is me. little for to how

sort just appreciated. on what's the any I'm any But to Maybe out in mapping like out so, there trying that mode. now seasonality? normal be of And still map would help growth kind normal you're back seasonality of year isn't

Jason Vieth

going to she dying ask question I'm that George, to answer. Yes. someone could for She's a give Anya. to been

-- Anya. I'm going to this that give So is to

Anya Hamill

yes. George,

So yes, there some is our seasonality to business.

with So season and also creamers big creamers the for peppermint then pumpkin are fall us. seasons the holiday with

ahead happen times, So of QX. those those so in shipments

to that's we the see second seasonality that's where or actually prime in be e-commerce, something So going course, that. I There day maybe most we pronounced was the a to in X say happening. by quarter.No, days is that And --. our happening expect seasonality with prime also, expect delay must of half, higher driven

Operator

The from Fuhrman Alex line with of the next question comes Craig-Hallum.

Alex Fuhrman

Really less look and good to time items specific targeted been most Congratulations or your wanted to promotions noticed quarter done, you've been any like on type I site. another ask very pretty year activity on your really either limited I substantially about direct-to-consumer discounts. discounting sales here. for of this they've sales. very, now, has there

this. it for just the changed there year. a sales? lot may been But you've talk about has out as pulling go your get periodic become raising harder behavior a any discounts too churn bit And have these some revenue promotional? have as meaningful you're little wondering customer down? of can if us as just customers of you've if to have less these ordering Obviously, yours back you considering without aren't of and customers your customers how new Or had So if result guidance less to maybe been come much all a customer at

Jason Vieth

to found, the DTC good We any a in, recently this our really quite draw we in. order we years we was this couple and sales had is I as had from our and Yes, on question. brand downmarket. when we bunch busted -- came lot changes sales because of had A a -- was ran at a that we not good had this we discussion iOS content. hear this And Alex, more side. ran Facebook, really platform. DTC deeper this shift strategic essentially the you, of is, really consumers big I we just the of had discussion that ago what result a look after what products to in taken listed, in big to came And site increasingly

And going an seeing the enhanced what there go e-mails, of where we into last XX the our that [ that, shift stand a is we been for have to see ] have now strategy. manifestation DTC underway content is, you're site, to what so, now has months you'll you're strategic to a

news, that make of bringing aware cultivating wellness really and it. sure of health overall consumers there and around regards we're and nutrition, we're are that So fitness our out we of aware some lifestyle that to wellness and are want the and stories with to

we content. behaviorally so, subscription cultivate there.And larger of allowed left what back. level us this up be give consumers include on to specific promotion. and some nice to a in we your feel a take the Laird price We link But back of that is We much to Gabby pulled And promotion, our in the set other question really content reason did to to those. doing advantageous to and we that up that, We able has subscribers. pick benefit. a also channel back we've pulled bring them we're We a done on it's while but is,

their that's I we're really kind in subscribers. cycle consumers virtuous of that into do a buyers mentioned and And period able repeat and are we've to of they that turned consumer So as more into repeat buyers trying buyers funnel in buyers for that lock longer people to improve into we and the that prerecord into a and we usually time, obviously, health, products. pull And through. that,

us consumer All when -- sales XX% it's and our we're the win-win And total subscriptions DTC are for now harmonious for a are coming do of able a that.So really about at right to around so, those subscriptions. discount.

So event. plus of typically -- getting you're of to receive. subscribers a but We our we free going very couple our with what we best essentially is through best sales, that be sale XX% year few very now that do just it's events run off a couple sales, big do that the shipping a

to execute image to try premium of those. is So that we're those have. we brand really that so retain very one seeking we're Black that able minimally Friday And to

Alex Fuhrman

on continuing the just one direction helpful. you've had right driven report results you moving Okay. looks It there that improved and returns of quarter. that expect year? about the That's in should And category. your your by here, particular and Is see anything really like this sales in lowest throughout of returns as last And to on kind the we in years, the X.X trend that's numbers discounts then discounts, rate sustained really improvement?

Anya Hamill

and And the Yes. I'd say yes, that trade Alex, of strategic and outcome we Thanks our so the take question. this one. also strategies. how is this Anya. was I'll shift, for promotional about think

trend, also is the that to that our of to promotional the specifically, throughout and cut consumers inefficient wholesale impact out try our drive DTC club business we approach rest year. just there directly to at this contributing reinvented have Yes. continue we trade about business to and focus So velocities you but our retail that certainly talked any with and expect really shelves. And programs really on

Operator

this Thank [Operator the no team, in questions right, there do we questions further you. Instructions] queue. registered registered are not have At in queue. All further any the time,

will back remarks. turn any I over concluding for the So final call

Jason Vieth

to want I for thanks on you call. joining again us just the all once of say to

the For story coming quarters more it's we're exciting big has really us, given. some it's bear And in been last really had that this still guidance growth previously the we it but This on that of to numbers more nice through clearly And quarter, X out, that in and this that the the very over has much was be a business. or this a cusp turnaround. quarter. able indicate line that gotten with think each putting been so to first and be I to against has

So like doing we to I continue feel do, that quarters said same story. excited in really we bring next the we're and aiming were to what and

joining. for everybody, thanks, So

Operator

That disconnect concludes your your today's call. for Thank lines. and you participation, all may you now

Laird Superfood (LSF) 8 May 242024 Q1 Earnings call transcript