LSF - Earnings call transcript Q3 2024

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Operator

Hello, everyone. Thank you for attending today's Laird Superfood Third Quarter 2024 Financial Results Call. My name is Sierra, and I'll be your moderator for today. [Operator Instructions] And I'd now like to turn the call over to Trevor Rousseau with the company. Please go ahead.

Trevor Rousseau

afternoon. good and you, Thank Welcome to and Earnings Call Quarter Superfood's Third Webcast. XXXX Conference Laird call Laird Financial On Chief Jason are today's Vieth, and Hamill, Executive Superfood Anya our Chief Officer. Officer; and President have access filed was market By now, after everyone to company's release, today separate the close. which earnings should Laird It of Relations is www.lairdsuperfood.com. at Investor the website available on section Superfood's

are that current of Before forward-looking to statements and make and we uncertainties risks management federal laws. and call, securities may begin, today's management's differ please this from those a filings could and with note for these based These release of uncertainties. risks involve to statements refer materially detailed the expectations cause actual that discussion SEC the context on results described. press during other Please within

the With over that, to turn call I'll Jason.

Jason Vieth

you, afternoon. Thank Good Trevor.

As our want to Today, Laird of to of outstanding the just for by investors and results be share thanking and joining business. that you to usual, all support to Superfood again thrilled follow all am once Laird welcome are Superfood to I able begin that I our continue journey.

more also by growth. once quarter In commercial strong XX% XXX%, impressive XX% activities. business, we growing sales both positions our superior again straight by wholesale Day a execution or and grew the once led e-commerce strong again double-digit our XXXX and and Amazon inventory grew efficiencies increasing channels an which holding increasing Prime we the while quarter, the even our another by execution. and where across way, driven third was are both outstanding net an sales by third trade sales QX bolstered in by marking quarter led net growth stronger marketing than marks sales teams promotional by across we net our year-over-year. This our top sales spend where solid also with delivered e-commerce line and

a XX%, even X% QX our very internal while the by all promotional by lap given also order XX%, with sales up of and platform XX% DTC ago. in level in by metrics challenging from net green the revenue quarter. executed up size e-mail subscription a of up grew again Our year against Virtually, we increasing average flashing by that were DTC productivity

we driven coffee soon and Wegmans to stores XX-week in nearly including in that a and retailers across we several of to expanding our as growth grew I'm in by in including sales Similarly, our the in measure, MULO, conventional and were growth the XX%, acquisition cautious country, strong faster, year-over-year. sales the double-digit all XX the business measured channel, channel, XX% powder instant our lattes. creamers, sales, to by top nearly liquid This Albertson tell X, X, split creamers, period our gains growth buy to XXXX. the customer net the new you by more. strategically products be that by in wholesale remain you'll on box rate grocery Kroger, pleased October XX% the going of Safeway, more spins, find natural in winning that able products of was Amazon And sales core October In our in equal by for In increases ending gains from driven line weeks for I'm was our while driven in by QX new XXXX, ending same even also velocity. report up increased increases distribution products. subscription and we

Moving into operations.

supply business. supporting chain to team growing Our of do a our continues solid job

was XXXX. XX% driven third focus continue XX-point quarter quarter fourth where versus and that during have a at to the large of which will margin a by margin. increase XX%, During achieved straight ingredients, in to we top This marks part we least QX, we expanded the XXXX strategic our our improvement sourcing of gross represents the gross

the Our our Because shelves have in the our our change quarter frankly, available been biggest growth the been e-commerce in operational product and exceeded keeping we supply challenge has and, to targets consistently few in has a third consumers. throughout during chain throughout last on quarters, retailer XXXX perpetual year.

there essentially done season. game a we been as buying from inventory to a fully expect be juggling they've XXXX, and job event And the strong moved mole Black The and to stock of has supply team admirable whack issue. playing remain a Friday minor have in an back some important ingredient of out-of-stocks manufacturing position while in issue during holiday and availability, for

also share building we a to more making have of want in progress business. sustainable that been some environmentally I the

our past able is or to have year, and as XX% bars. and nutrition post-consumer are This and material we for more the creamer incremental into been and recycled goals significant multiyear a of business. additional a program. of the our any to sustainability During ambition in all well to our cost without protein have meaningful done consumers, we introduce outlining process creating this we pouches as our Impressively, our team

time, margin high At gross to to to increase that premium want from word which be you asking during you with we are into business XX.X% strong couple able solidly to points, us it, the Laird to it nearly dimensionalize gross XX.X% Superfood XXs. over were ahead past it. the the the But net margin can our going of gross of far of our years, high-growth for of moment well same margin I'm to turnaround grown is by my I bit a with gross executed and a by rather Many a XX.X goal able branded pleased now margin. in our assert into you to have take been take XXXX, in internalize we that the transformation so to that we've financial Thus XX%. than sales maintain

$X.X a $XXX,XXX $X actually balance million the less And year. XX, nearly XX of last is to last XXXX. versus million, $X.X improvement time more as $X.X the September million year of from period million net loss increased quarters this Our for same by months, been cash the than which our X has during shaved than

And Laird versus opportunities QX historical entire the performance we our been brand are even improvement business. for Superfood, future at XXXX performance financial excited our the tremendous has and a while more and about

we out business consumption. health, relevant the channel them into other in we Laird behind and content the wellness, our engaging build and have and As their we from shared distribution to a white natural foods, not e-commerce channel, as massive growth of to is fitness. we grocery fuel the food space positioned remain really our founders channel confident on-premise natural expand expand even before, have or sales still our and tremendous and amount have drive within consumers conventional can Superfood and portfolio velocity more seek begun to healthier We into nutrition continue And journey. to increasingly that influencers within perfectly for

will it quarter in discuss Anya I our more to turn that, detail. to results third over With now

Anya Hamill

Thank you, Jason, and good afternoon, everyone.

in a am strong period the continued grew second to our the earlier we delivering $XX.X that As to momentum prior significant you year the articulated quarter, year. of strategy growth every to year, were make pleased compared the and XXXX. executing is quarter period sequentially same the year versus up building the . Net third quarter progress profitability. sales the while in on were this million XX% of business $X.X to million improvements record noted, by $X.X the half first million Jason I prior and in improving results we share on return to which to key have with third metric, versus

and e-commerce Amazon a far for platform of execution XX% outstanding the total also efficient by best shift was well led promotional by net in spend. subscribers orders. XX% an driven XXX% platform new net XX% order growth had by timing commercial steady Sales better strategic increase in-stock growth, driven growth grew in Our value driven the offset more position. and increased distribution quarter spend. to and contributed of acceleration This orders, of due discount channel our by and rates from in XX% year-over-year a velocity the partially company's retail XX% inventory as lower net history, XX%, by sales, increasing year-over-year total by and sales. cross-channel on promotional channel repeat in company's the Wholesale and delivering as Direct-to-consumer by sales impressive accounting higher

by I a XX% spend. These in initiatives, XXXX the the margins supply have inefficient to last quarter the in reduction of fourth achieved highlight Gross chain for shift points well reaching am driven this to incurred the saving margin the for least high we gross margin to as threshold. further third promotion as came is coming with settlement at new in with quarters. that expectation procurement consecutive or XX%, XX in at event pleased cost high expanding a trade in recover was raw expansion previously direct XXs key above sustainably materials, at our the supplier year. margins strategic costs from the achieving specifically This support where in quality gross results connection quarter and versus experienced

improve expenses the third stock-based in programs. which third focus order than by $X.X marketing general part and prior as improve expense quarter by to million the quarter driven loss administrative points Operating higher as the compensation, to is were This to Operating for noncash year, of costs of lower management as in during sales by a expenses our quarter period. the expenses driven prior is $X.X on better year expense. third professional was the which quarter compared million line. ongoing and fees XX year marketing compared sales decreased by efficiency the percentage Net we lower $X.X in higher we offset bottom our last a net was and million,

first second in a in Turning $XXX,XXX to $XXX,XXX that excluding quarter report pleased am I in sheet. decreased reflecting cash. revenue was to X the our ended capital, while improved row, we the of growth million driving of XX%. positive delivered which year, cash, for performance year-to-date of totaled our year-over-year, the months quarterly have And and $X.X our balance management a working quarter with flow, the and particularly QX, cash which We for disciplined

no need We on expected line no and debt outstanding draw of credit. also our to have

we as fund profitability. and improvements operations that we grow We to drive project towards our have cash continue enough breakeven us make that and business our to

feel remainder of we the confident XXXX. Overall, about

business executing in our strategic We on segments expect remain as continued priorities. we focused growth our core

are XX% to represents to to XX expand XX which to XXXX, year improvement expected is versus margin XXXX. prior growth full to approximately gross XX% to representing And net versus in the XX% gross net year. we expect $XX to XX%, point both be increasing full sales on now $XX such, million for year the margin. As million We guidance our sales of range and

to Looking and to P&L focus decision so, to ahead strategically XXXX, growth positive cash our growth. flow achieve expect made And EBITDA. to XX% on doing top XX% in we to and we a to line manage

And discussion Jason now I will turn back remarks. for any to closing the over

Jason Vieth

Thank you, who Superfood. Laird Anya, thank at journey all our of and to are once you again you supporting

an Our the last our one shored business X up only finances returned also quarters not we rates in where in have to have demonstrate our incredible industry. turnaround but business, our growth best-in-class

Operator, remarks, this questions. we to to and open our the now are prepared ready call concludes

Operator

comes [Operator from Hallum. Instructions] Fuhrman Alex today Craig question Our with first

Alex Fuhrman

to really that XXXX. for little about growth to Congratulations more bit to really where see outlook is Wanted Nice quarter. initial going a on from. a ask strong come strong

see prepared your a remarks coming. I that we're in think, number to of doors likely other Jason, mentioned retail you

going biggest the been online XX% business. You little growth? driver XX%, be Obviously, accounts that named maybe more of bit this national Curious growth to different. looks really next Is to impressive how your it's driven that year, coming. that if year, some get by you the a

Jason Vieth

you good Alex, to again hear today. here

Alex Fuhrman

to good you hear well. from Jason, as

Jason Vieth

repeat marketing we're The had spend It's online knew in of And the as pressing we we bit heard the number we've subscribers. is very thing but go purchasers into sticky of great performance as great pulled and we on. on hit Alex, the purchases to were it we we surprised year. next year. is unexpectedly. lot repeat reality purchasers this about year Thank pleasantly great really to question our And you. were quite this, Yes. a that And e-comm year tactics, a We we business, our with the this a have and that one better had a number team a out. revenue a the business, -- result, a

about we so our And great really still ability grow to feel DTC.

playbook latent at And growth have that in just fire, time, same that of has And been on the the saw. as executing Amazon Amazon we've we been we lot you a still running. know

even we we that, though, we expect the up as going being of I Probably, very is as more with. the a next accounts, selective did well. think We that and look to retailers pick strategic business. business working So we're would really And mentioned. at wholesale year continue number that e-comm growth to with do we're just

had I couple previously with in Target mentioned think that been I looks we've and the of into entering categories, there. good performance a

retailers too, as the including velocity gained have I our distribution that gains with fairly been velocity we a reality is well distribution, that had and that And gains. combination I been been a channel And and But behind other additional year these the equal, sales that, this lot we've they've year. as the this as mentioned, same on thing had natural fire, it's of mentioned.

same that's hitting at the kind that's and Anya making to everything about the year case a to invest same And with that our point the everything point. time. really regards I'm hitting it's -- the kind is sorry, And in business. going at really of sorry, how hitting next We're -- to growth. of So was for think

as in of they're consumers opportunities of physical stores. right with and consumers guests retailers online and have at their their us as front where in well a We -- lot out shopping now

make And we're as with that marketing prices we consumers the on have. database database, getting have extra that but and to to really the brand display very new and promotion much sure as want leveraging we strong behind we also sharp can that we

database incredible over loyal are we channels. mentioned, new and launch have very our the products million we've with, ability an X.X brand, as that have consumers to We to into

across categories. Alex. strong to come see you're going going next So these you're our And it year, of to see growth frankly, all across of across, channels all

is our And it's green the up I it's winning is the green, look right same lighting report, on year. thing way everything We in and e-comm at Everything all categories. are of been When platforms Amazon of that and the spins now. this DTC.

and we're [ grow ], XXXX very So to build just going this and business use reinvest just carefully.

very really spend the So right and we're we position in as where ROAS carefully. stewards and ROIs been marketing But can we've with watch you very know, a effectively. dollars, good now we

go going that, going in so growth we're all our forward see across to you're as really And to do great and channels opinion. we these

Alex Fuhrman

then up. And Jason. could helpful, I just really That's follow if

of type having categories into mainstream in retailers they As more some you think helpful. have towards more which about more mainstream, on been foods well your as open as move have expansion as you creamer which retailers, been your long-standing you're your the natural of resonating big-box you doors bigger grocery SKUs? Or color more success just and any as for these gravitating opting products are powder products retailers be would partners, X core those really

Jason Vieth

Yes.

that do continue a productive Our as space creamers. never will legacy really creamers, the continue is -- to to that they is as dry liquid the well. we powdered those, and that's grow a space But shelf and be

QX but it typically that A and we're top or where metrics the markedly and or by we we per of sales we X distribution, QX, of somewhere those. but QX. creamers that the we're at. point look And at the couple call so between at in top of assessment, When we what into go stand, in large, are where well liquid quintiles we're shelf quintile these always analyze look doing break at all we both stronger, on of products look into and performance a stragglers, quintile are measure that go from maybe ourselves and performance velocity

run year the there's more don't it And distribution really them creamers consumer. to liquid had of little X as to they powder we're really And good growth, a a size, a creamer going value which play buy you out ago, and do be bit large velocity give have whenever had as so at look those. is years what a nice is. to this to The they It's seen to that we often convenience in more as XX% consumption upsizing, a so up year good rough home. we've but pricing. a and year. over creamer There's incremental both a that. just And But well flipping growth really, XX%

We've into liquid excited really we're some that year. great on as about So creamer we had next distribution go wins also.

So both great. looked of those Alex, categories,

products ago, growth And then lot just me They've about driven great X.X and when a -- years latte the I the the online. our real on instant versus surprise this in of to fire in where came been grocery. -- have They're coffee year.

launching those year, We are We're just of of and seeing categories. of bigger And launched past those lot so And in and sold of of now items, going this batches a to out couple off that. continue. times that we a both SKUs our both creamer protein a new we're we've in new of we're running success. blew expectations

We rather SKUs. coming in sorry, functional of that launched the latte coffee couple and those products through -- we've out and that's are are have to creamer then out consumers instant the instant bring specifically mushrooms, market gravitating functionality latte to really coming more I'm new And or and a new that's in adaptogenic retailers a continuing space.

all the has been product into I to that really are next going areas you're go think exploding those green, addition see on to X year for us. as So in year we fire which

Operator

Partners. Our next comes JP from ROTH question Wollam Capital with

John-Paul Wollam

continued of a the that touching activity. to kind just to like the more. of about prepared on if sounds it's growth a with want go be next going Jason, margin. remarks And year kind investing of kind promotional to some focus I of It little Great. bit specifically start, and could discounts maybe I

talk of kind of activity. about and what promotional seeing just and discounting really about was next you're the you're in success, thinking And terms finding you most promotion of resonate hoping so could where I you are just how kind kind of year

Jason Vieth

question. want that I'll cords workout, And to as jump you a for Thanks well. jump in if can then, you in. give your Anya, And vocal

recall giving you bit a So it's that, to year, really in We entice much And first-time found we purchases, line, consumer last gave away. well. brand to their ago, overspent were interesting, we too our invested especially really trying probably we what felt into purchases. pricing. and really equity the much little we JP. as doing year the is them consumers A on we is we trade were shaky and too and And away

So a QX, we lot in the carried it's forward pivot at been strategic of year and really, year made less and pricing we've end to do last very effective. this promotion, a

As price selling the out has see full year, a that from we've increases you for lot can at this sales us. better net had worked

that's that And cachet really heard fewer let what do us to it's is is brand are now keep the we specifically We see us on as we deeper a our up done we What online. we the from year. premium last consumers as were sale and surprised run premium sales brand. of often

to are need functionality the for this and the at promotion. the in internally believers because they're of that's Days. large, point price are Friday in Amazon then at leverage consumers DTC. that And lot And benefits the out really big leverage for they're pay Prime it brand don't working we giving Laird have sale promotions. DTC on And Almost that the run the of well We none, and are a us what business. really them -- willing we fact. So other really for without Black then it's one the on buying we at by food,

We so promotion, of back that pulled grocery really course the on So back you. trade that year. as XX we've and well. extends cash or pulled the of the into points backed over We pricing away

Anya Hamill

XX.

Jason Vieth

Yes. XX points. Yes.

so really getting focus getting grocers a at strategic very And display. or made the quality feature And that call of display a and into we merchant. that's quality function a promotions, circulars around and decision, JP, called what's to secondary we that's

really where see next that's so And year. poking you'll us

secondary that lot introduce tight of or a in will your We promotions products pick And of a way up to couple a that's have to new display. time a big just planned committed frame. tremendous consumers

promotion concerted pick And just more to drive do. year. efforts is marketing going I so But really the of awareness build terms about There will that's where the as think next be and would to pricing of the to that more we're in be up really consumers. and same brand it going our more focus

the found fitness number especially We've share nutrition have tactics months, that general those tips. of food and leverage the that and over a marketing health, last functionality and worked the XX of well founders wellness, our really

platforms, And see effort bases. media you'll grow so across much bigger to a consumer us subscribership, more various build those and awareness a where we've and or the more to continued invest drive making our and concerted

John-Paul Wollam

Great. of and kind customer set kind about -- of the helpful. a another now, actually customers, jump beyond then think are kind thinking with customer bit that base are made a you the a thinking kind of just you you you've wellness-focused just we have whether of on kind whether step new made touched ago little bit give health could very you there, some next of how a that where you growth, of Like think, very That's And -- Or maybe strong about of year kind kind new little us year but of you into customers? into of guys it and versus strict next there? of Jason, about set? of I extended jump just customer projected maybe if out the sort -- are how and a you

Jason Vieth

to used that's data Yes. the we question, it's a as great of smaller and extrapolate data of Well, much as some us against quite that some one that is one often. having, company that's a are without

diagram. this couple were an years set I'd here had really consumer our got largely we tell what of ago, think we kind first of look, in I -- circle So I was expanding -- you, a of when and

have, launched we're leverage layering we've -- there were and establish just groups through Gabby's knew, Laird Instagram and what And Laird and their or we into the accounts. family. to that So in it at essentially own Or of people. leveraging we if we're been of whether to just they followership was some who the Gabby core, able really friends off

some some the up the one West Coast, in specifically so those the that's -- but with onetime go it's the was expensive, And one up was and in. it, who health what community we point circles, this had of down really exception. into our done executions wellness and we were was and and was some done few And right launch great ago, influencer exception shoppers at years server and throw a found down you then the that at that hits and and with we And product that is had consumer but for extremely would consumers. aisles whenever

fell away. Laird largely and left ultimately, folks followers. we those And So with were and friends Gabby's

to In the diehards. so, that really focused we months wellness when on and getting I health next or here, got XX

of make a including a reasons of targeted score score didn't lot and Hamiltons. are I really just or lower have health the for the think really of bit in of it little of we wellness enclaves Dallas core Coast. And and to it that Q folks Laird that, East Minneapolis, awareness enclaves, And kind and Specifically, about Gabby, area, that would that you Coast Austin, geographically Chicago, there parts a West really, and the on Texas, are specifically, wellness. focused some Colorado, health some like say, of

can concentric we've better, of that from tell I that in pushing People the into about need why functional they because careful I the inefficiently. kind remain circle that doesn't or know hearing next that's and health are pushed -- careful we're to very you as our and the wellness you, out very you eat foods. start isn't in last and know watching we're ROAS spending year, the moving diehards interests, now to once And marketing our the call dollars a group that aware. as wellness diehard are what foods, health trying those aligned well spending the And where as to would that start -- you we're so next

And we've of sets. our the team say pulls people. been into holding job specifically, we've I'd in And on I'd question last to marketing of consumer those great say and has that's tapping -- to in an putting into their very you've in where had -- the returns couple finding carefully incredible your a of had success and new done really toes year, just

we're we're so consumers expand. we're into altogether. because I And expand. the of of geography find push think now our And the watching watching going our another set -- channel, We're to set finding now consumer conventional

So yes, the answer is yes.

certainly we're with but expanding, it are and We doing spend modest very carefully.

John-Paul Wollam

done a this to a certainly to And a want sort just need And operation of have growth. you of inventory little Yes, to more about have inventory your liquidity to want to, current maybe or one Great. you last more a given think -- how I bit managing about in, I I get kind great how wishing feel or just talk one to goes know maybe balance. you're liquidity, you're if there. thinking times, of could want return question maybe position guys have I just a job sneak a and a little the at have kind I If given cash sense there. this little really you please? talk just X bit I And inventory. of maybe to tight Can bit out-of-stocks sort the of

Anya Hamill

that for Thank JP, question. Yes. you Anya. this is

were ABL line a we in put credit an So place of in know, you place, put QX. in as

to not our capital finance drawn expansion. have on we We it, working but if we it have available do need

AP sales efficiently and we balancing that next So AR, should year, to really we far, to it to have capital. this able we order our ABL available it draw and in need been if refining our perfecting manage need operations grow working to it. efficiently, manage we forecasting, But our inventory, have really upon

Jason Vieth

Yes.

so And JP, more a to little let that. bit me add

in additional we're need we We've astutely out, been very year. pointing inventory. to invest a position, you're running So all as into where tight

now a that's right of to under-inventoried as bit learning little got like how We're a and where be. also chain. a probably to well supply team, very lean we've really we'd we're just-in-time type team so And a versus operate

anticipate that have very inventory a big we'll don't need. I So

As mentioning, in use was previously, we a as could. just in something extra don't little of as Anya mentioned we it. a bit we do It's to have We place, we that cushion backstop plan put that because ABL.

But and to Anya, generate sitting year-over-year. it, we here. the up, And million you able cash. to year, know, we're almost to right is be continue we're expect cash, we've I mean as $X.X million and last increased around still what in $X.X

Next continue growth at increase investment cash But year, same now at looking our next we'll fact, I our to time, in mentioned to, the shrink year. we're not all. into

will but XXXX. anticipate once we're balances guys year now, would in So talking fluctuation as back we you how that quarter-to-quarter, again be XXXX we that about coming just there and in from a cash to done have from I increased now normal our

the have is only right see, acquisition just opportunity that found business, don't differently. then So far want our a And if as of to in confident an a really don't cash P&L we to we take that or see feel We're we new don't nature operate as business. we we'd reason amazing that business. we We anticipate to. believe it the we now. that reason it our have now. changed we we need business and -- -- maybe incredibly have solid raised saw if like to the We we cash for now us, But our product any incredible investment this of can well operate fit we felt taking cash very

-- in just continue a doing. have we're just go to we're able to anticipate play And so we we -- as we doing forward, what great we

Operator

your for all questions There in are queue. longer no you questions. Thank the

I'll So any team back pass the further conference remarks. to the management for or closing

Jason Vieth

Yes, I'll just close.

couldn't same year been than We've think agree. be have just heard in where been we you are. position that to are I for from as and Laird saying be great excited We're by pointed cash very previously in more got, a position Superfood. all call, And the year me any year we a at I'll to close guys balance where while future. point XX% in XXXX, you Anya fun our continuing got to of about we're more the this sheet. here. next the our balance for hopefully, we've expecting today, on about or And great in we for general out a add grow I've enough at excited time, and but this We've at can't we more balance

one. in for thank forward with hopefully joining We of quarter all front lot to that another like us getting So look a looks you this back you today.

Operator

conference today's your all you conclude will Thank for call. participation. That

disconnect You may now lines. your

Laird Superfood (LSF) 6 Nov 242024 Q3 Earnings call transcript