CWEB.TO - Earnings call transcript Q1 2023 | Charlotte's Web Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Charlotte Web Holdings, Inc. 2023 First Quarter Conference Call. [Operator Instructions] This call is being recorded on Friday, May 1, 2023. I would now like to turn the conference over to Cory Pala, Director of Investor Relations. Please go ahead.

Cory Pala

Sergio. you, Thank everyone. Good morning, for earnings joining XXXX you for us call for quarter conference Inc. first Charlotte's Thank our Web Holdings,

press this issued website financial release posted earnings statements. our our along morning on with Our and was

our today. XX-Q we myself Leading call financial EDGAR. on from are QX Tortoroli, Jessica each this SEDAR Jared will COO, locations Jacques our Saxon CEO, join has and initiatives. provide been On is Stanley. and Our call, some on recent CFO, some and review this filed morning's morning Jacques results remote and color strategic

including We at may outlined and company our factors, call detail in differ cause of earnings and a Certain some prepared will be our subject implied call of questions extended details week, will within this through to uncertainties press nature remarks. risks, made forward-looking such release period from will on future regulatory statements surrounding results through to accessible available forward-looking the take actual our next IR answers the from the company's end the this section available in replay expectations.Risks be of webcast for and, accessible is materially analysts certain A today's provide questions, an replay which website. for all include that filings. we performance call, therefore, content may are or to the of could provided statements in

Tortoroli. hand release Please well I'll refer of EBITDA, reconciliation during prescribed description GAAP. a GAAP standardized does the the the any Officer, to Web non-GAAP to a earnings not meaning for Charlotte's now addition, supplemental call accounting financial Jacques to Executive as measures, In Chief measures.With morning EBITDA Jacques? call, comparable which that including adjusted adjusted as that, we over the refer filed will by we this to have

Jacques Tortoroli

reported QX happy expectations. Core, wanted then down selected million, our you initiatives. the revenue this X% joining will in XX% I we below review and on This And an of down market progress thank year, in update with momentarily, strategic financials Friday. our for morning, call. but give our Jessica ground prior modestly you, to volumes $XX you and hank the the versus

the market billion The at category. to Looking XX% Charlotte's XX approximately Web The CBD at $X.X brands CBD top according is with #X. Brightfield. share

than X,XXX we are Therein While brands, some or of category-leading cannabinoid the and market #X to in prize Retail sectors the market, drug That lies of XX% total channels, share. we less with if over sight billion way, roughly we you don't discuss have X% approved which FDA #X is represents of by size share X% share. and #X X,XXX Charlotte's leaves shelf the XX% of market total each regulation, as which formats the the metrics exclude e-commerce, XXXX. retail. brand awareness of X% of represents velocities. Web and today like pharma brands participate in in.We market, $X we the in shouldn't share, from is In over the the quarter. ranked XX% and #X with one down loyalty, XX% lose the we before

to reach a and innovation continue broad-spectrum expand relevance small and when very our the IP spectrum, recreate brand opportunity partnership pipeline of the high this sheet equity, FDA to opens full and happens. Finally, namely for and in position announced our summer, NSF-certified our balance later partnership Web to our you, starting and uniquely strategy substantial D.C., to of Washington, do certainly with value an regulation don't culling brands consumer path enter previously longer with to we market, for and potential our recently of with Botanical framed winning our a wellness. to MLB IND In market over time. products, number given the Charlotte's the the into D.C. fragmentation the growth, see without term expect us significant our Of of IT grow to regulation that and to participate a the botanical returning today.We #X we in of in us part share in unlocking drug competitors the

each briefly you quarter the significant on Let some update pillar. progress in me on

others MLB coincides driven formats partnership largest appointed ReCreate across brand Thyme, trend the a across returning including Officer, sales. Spirits. which Shoppe on MLB when the of growing this out ReCreate sports be of to the of this sports summer Marketing cross-platform our available last logo recently for we'll capitalizes in exclusively leading formulations Andrew Glazer's new First, Philips Edge and work the wellness on well with Recreate month, and early leading young first Supplies, occasions, begin new and formats, professional starting attractive broad-spectrum partnerships.Finally, day millennials important the cultural the they wake us and decades retail multiple the new and who bears our channel, to strategy, with the and than with announced We among make designed less servicing new Botanical MLB vertical of certainly the site interest for digital Verizon CBD-infused Last different distributor also market. and brand gummies, iconic with month his during this making are the the XX,XXX NSF Pet channel Recreate we comes They benefiting and e-commerce XX% activations way, CBD sports marketing, a revenues country. recreate of announced most Food up launch XX% year. up approximately the Chief over our verticals. We Southern on experience, our lifestyle Zers our from traffic And users X this quarter. in CBD.Launching self-care daily today, products Vitamin certification. online need-state that throughout with from seekers retail Daily the to while wellness and Tincture growth. rolling CBD have formulations with secured recently functional Wine we mental to and in among will year guardsÂ across our well of by Shafer, of a launched a drive as well-being, demographic active packaging valuable but brand available pet of and line second retailers, other leading active $XXX half for botanical a in and the Pet as partnership states Andrew is specialty social Fresh Gen multibillion-dollar need with million very site, of as from

level, state in we're of Jared actively a his speak is more pillar our both. critical and and role in leadership progressing strategy remarks. Second has to In increasingly at Washington, taken D.C. we'll these that regulatory. where the initiatives,

over touch our cultivars third an formally the and based remarks.So value pursuing and also I'll of pathway, botanical right that, Jessica Saxon. FDA-approved proprietary on this the each unlocking the pass Jessica through an now with in partnerships company's IND activated We pillar, IP wellness. This our on seeking CFO, the strategic to the call drug structures. Jared their in means the and botanical will

Jessica Saxton

Thank you, Jacq.

EBITDA in reviewed results release in and XX-Q. are Our adjusted earnings detail our financial and

of As on this go call. them all such, I will not through

have declined of any I'm in our However, BXB XX%. answer specific million with XX Net compared year, and to you Q&A questions to down session. e-commerce revenues XX% X% down happy last

for the specifically. to until in our X and quarter, points XX% continues shift growth However, XX% from the versus continued gummies two revenue this drop Consumer represents in revenues, In the up gummy the us single market price given were offsets to for share expect tincture category formats digits more in and our of in year-over-year. XX% the e-commerce the tinctures with mix. declined volumes XX% of tincture the X%. formats X Tinctures principally business Web industry. unit our up declining quarter, respectively. strain and In with on shift a Charlotte's are the largest volumes. high This volumes volumes this to tincture gummy one operates points gummies revenues points of resulted gummies.We mix revenue gummies continue mix only shifts number the in to other than number and

gross media basis by in jewel priced CBD year-over-year recreate generates as of revenue platforms turning XX% attractively revenues business than MLB the and site. we e-commerce Web lifestyles this a packaging. base we've of experience the our attracting company's Charlotte's and business continue the consumers as the revenue our League's and top funnel about into attractive BXC MLB events, be around new one new the XX.X believe which on as we overall more and go previously, well margins. logo activate unlocked we with enormous fan QX remains both number an is to talked and brand, Increasing Our XX.X% educating priority priority, and carries to partnership through lower of was the our against on the MLB leveraging traffic million will seasons trajectory.As lower against

rates strong remain conversion online Our at XX.X%.

from go for bring their of journey approximately account awareness showcasing significant XX% to to subscribers lifetime our subscribers, representing we ecosystem, consumer value. into purchase, becoming Our through ultimately people they revenues, when that

lower food retail QX a our prioritizing working growing channel, team mass was outperforming the year-over-year, We on X.X% on sales experience to have improving and store web cross-functional total down are user our which the category, were traffic the site.In drug XX.X%.

while the a volume overall retail strength. retail the the doors, of FDM, in channel brand and we our number number we speaks number share doors held to one dollar we As a for This saw decrease increased the result, In category. in XX.X% of position.

the XX.X% X% the XX%. on addition, channel. quarter hold natural And spend category saw to down want in channel we lower down In up a QX top in natural was the we last was the XX the the our which interesting. In while year-over-year, SKUs sales four SPM, category What of ARP minute XX.X%. were channel. again was was I outperforming the in

the Charlotte's on with and doors also the carried, shelf reducing grew rate.However, while are formats quarter SKUs taking category and of existing the number Web CBD, selling and tinctures. more two total within we doors First, retailers about and times facings and reducing the customers gummies are principally

Net tinctures of the number higher significant of impacted. than in the number while gummies of the our For negatively category. grew carrying ahead revenues mix us, were doors despite quarter penetration our slightly category, the doors the given incremental carrying declined the

for category the the That velocities. our opportunity highest of grab longer term for bodes an leadership Given well the in shelf. with Charlotte's share Web to and incremental

customer expect the and decline We for as tinctures.Moving well and our further to $X addition of impact market debenture a recreate gummies as other year-over-year, of share revenues gummies SG&A, the rate the MLB and to when first soon quarter with from fall. gain despite eclipses positively growth receptivity amortization the fee pending SG&A was completed rights particularly to convertible XX% launch we VAT lower million noncash last the amortization expense formats,

expense for Going the year quarter the to to be asset, valuable each our reflecting will XXXX include expect additional an we MLB SG&A amortization in the XXXX. three expense, SG&A MLB forward year Notwithstanding to comparable partnership. this full of related

Excluding million, these approximately which in XX% decrease is a our year-over-year. XX.X were items, amortization SG&A than expenses QX more of

first botanical is and Xth, hemp which formation the the party Our year, quarter, property, clinical structure the proprietary wanted to to earlier competitive Web DeFloria also On material the each AJNA studies significantly bulk into is million data. entirely With with to AJNA. and managed set license our BAT regulatory a of and we provisioning, the versus BioSciences drug. cash our moving we AJNA level.Net of million reduces fee BAT in the bit rights of attributable in environment. benefits to last little of the risk the in services, an for consumer existing BAT a of operating fund is was phase Charlotte's and expertise, Web. to reduces our by at financial rationale intellectual $XX BAT more X this manageable and our such collaboration current other with being contributing of Devinsky.Lastly, is certain is parties Web contributing. a contributing MLB. forward, is reduction a and against $XX and operations position discussed are project million the initial advantage use for the increase announced with contributing which QX I IND capital and end the the with to million pursue cash payment cash stable position a expenses XXXX clinical X.X Jac quarterly give Financially, Charlotte's funding which shareholders. for third the insight used the and as laboratory permitting burn fully from X.X potential Orrin Charlotte's Dr. the AJNA April collaboration including

will we the the call However, turn maintain Stanley. co-founder funding though in future to obligated.I COO, rounds, participate to now not opportunity and Jared over

Jared Stanley

Jessica. you, Thank

Before me let update getting Tilray into progress brief our Canada. give with in partner on regulatory a our

progressing on and We late await topical, on track are tinctures, and to approvals. this quarter we tinctures Canada Health formats launch capsules gummy as

focusing final gummies phase. attention our capsules with this Next, we are topicals on and

combined formulations more take gummy Health Our with requirements will Canada time.

been dietary five the XXXX Bill. address has years as since this Since hemp give Delta-X For guidance while FDA front It starting concerns regulatory U.S.Let gummy of to ensuring ensure XX hemp an cannabinoids. the products passage and what lack THC the want supplement the a consistency in to recent was with on to timely me a to choice. great step in states years reason of SKUs in confidence the to bring CBD other state with intoxicating It's is we and manner since the our to the American nearly we of update has produced we X other then, launch introduced specifically you level. been consumers Farm market derived

in requirements accessible that will compounds regulating Florida have like CBD continue in have in of few therapeutic to We where this to preserved the appropriate spectrum intoxicating and and voices we Colorado our been present like THC.We through educate is access Delta-X continue have while impact steps full-spectrum CBD regulatory non-intoxicating Charlotte's to full consumer legislators process. products states sale and that ensure heard states implemented products were will to the take A process Virginia, legislative consumers. Web be will to

is While Company. be of in process end focus an coming ongoing this to the XXXX, an this will

Griffith's previous responded a need month was supplement.Furthermore, state Congress the agency's a the years address more a commitment in earnings, as Congress a regulate and FDA reintroduced Congressman lane in HR-XXX safety last FDA's Jamie on XXXth of H.R.XXXX. together dietary Comer CBD to toxicology is concerns. sent regulate position supplement. are as in This staff Congress in shows our CBD FDA's to Congress January regulatory supporting the and data their Considering DC as to sent Congress regulate by a as letter by than seeing the come Comer, dietary events. for have We position with the to the the and we On dietary federal Congressman to as Congressman to work impactful path. now investigating for engagement letter new with industry a to the intent CBD failure stated clear front, the it supplement. compiling in their in and is we new holding highlight CBD of

We access support. to XXX(c)X political have for foundation established Griffith we through consumer advocacy the support coalition now, a

the studies data uniting of Additionally, to with an industry on addressing we we together objective sharing and safe the firm of reports a tox based are the concerned FDA's a use CBD, Moreover, safety bring engaged science. daily to the recommend over CBD industry Congress.

met actuality one that also industry together participating industry are to every will We provider. path mean the FDA's does the for strategy the is standards find a It be in the approach actively CBD.This size coming to embracing concerns. a all of united the dietary one means supporting fits and CBD must supplement set not progress for under we address

process will warning products Our land statements, goal theÂ Griffith protections stakeholders accurate Bill facilities At minimum, and favorable across ensure through needed for a labeling and are GMP the with require standards amending against to Congress standardized testings false embolden a CBD aligned with industry confidence claims and and the is to credibility legislative registered with market the CBD. this to FDA.

access began industry it industry. essential we voice consumer crucial Recognizing that as focus amplifying through this for in entire is DC.Now, Griffith this of the the support and journey the by consumers' our the synchronize between our our voices, Our coalition year. Bill advance to to expands the served strategy encompass of collaboration efforts now, cornerstone Washington our

we confidence I converging, the full elements vital have achieve. these in With progress will

they of for to A However, with to we're our a traditional but It biotech ingredients a FDA developed, realize understand pharmaceutical is name synthesized not a between for The botanical medication not destiny the waiting potential. simply the venture guidelines Botanical introduced Controlled administration's to IP testament for path and DeFloria. scientific conditions. of drugs the the our removed team this by in the Charlotte's amazing strides yet Bonn-Miller.The made full-spectrum on commitment valuable drug entirely category of drug drug Chief entity the of meeting plant joint botanical has create This strategy and cannabinoid asset into the partnership XX to have of new pharmaceuticals, CBD. Adviser, to by enables and and already we senior The feedback significant XXXX Devinsky, IP mixtures BioSciences experts same leg is and Dr. an formulated natural our process. logic this hold strategy FDA created pre-IND refers with of researcher has investment compound AJNA isolated approved Farm an provided the drugs this adherence meeting It's pharmaceutical derived engaged vast XXXX. FDA. with use.The the partnership of single in research, and to and recent and is the like ensure Bill active drug is led behind demonstrate sources. investigational guidance. expanded botanical has driving of to the specific their the shareholders.DeFloria drug in a are in quality safety, medical was contain to and drug behalf our treating year are new Act market the from regulated DeFloria to recently being Botanical DeFloria's team to made standardized the business AJNA's third They're drug the and to XXXX pharmaceutical Web, the effectiveness drug requirements plant-based is BAT established trials critical botanical agency the Scientific Substances path. and act, and a CBD safety Combining Medical difference inform traditional business. clinical and for first for of development meet appointed in This or guidance announcement clinical Orrin its that completed AJNA Officer Chief to substances. hold from trial efficacy Marcel specific involves botanical rigorous roadmap. development with to

and to continuing And trials investigational the the phase Jac. complete X and has drug BAT we now seed back commencing to new preclinical summer. phase over clinical trials.I'll funding are We this application from the venture X believe enough call the hand

Jacques Tortoroli

Jared. Thanks,

three-pillar strategy of our business. We value long-term about continue of view to of our wellness. in growth, moves returning in the IP to strategic the D.C. and execute and in the botanical unlocking confident winning We're

constructive double category digits. drowned was outcome momentum, reserved. in in growth out. let and which grew a in while rate signs X% should stepping double moment, declines distribution down we FDM, the are back revenues didn't the Yet the or however a mid-single natural of However, at finding digits volumes. remains quarter the for optimism in in There be category short-term, We revenues in regulatory channel. XX% of and grow the the clearly expanding doors slow We in not nearly

average FDM single is retail up Our in digits. price

ineffective revenue strength is will equity, any While muted price.A brands pricing mix to double indicating at BXB by in the the gummies. our turn brand not while digits, fromÂ tinctures growth being is down category

and on will e-com. while into year-over-year e-com gummies working will experience However, platform. new growth our SKU pending it our on traction spring user We're the recreate this and with pass improving brand customers bringing new help sales, grow return particularly incremental will worlds the our

cost balance regulatory second sharing half we All-Star MLB levels. and where call have are and in control. we and a making want in balanced the the year win.I of starting of over the I'll sure heading, both we're We off federal have in July. And game state with Cory. and of on view to to sheet a We're the for progress to kicks us we're the where base Seattle turn make back the

Cory Pala

open call we Thank questions? you. Sergio, can to the

Operator

Â [Operator Scott MKM. Instructions] from from question comes Your Fortune first ROTH

Scott Fortune

first want a competitive, stores, provide you can capital, focus at starting Jac shelves as your you little Is you and moreÂ color what their on market market continue I and store from brands the you will little X,XXX more can competitive, Web up shift appreciate competitors, kind forward? the the mentioned, shelf pick more but be provide here, comments, come at you're A value see times And mentioned You share, bit the many support here. activation to But seeing very moving but how and of this and down self be and on Charlotte's to limited the with share? it's in with liitle here, to rationalization the to on color? pay market small you more obviously, discount level, then color? in system? SKUs the the the fragmented on

Jacques Tortoroli

continue in Look, culling even most now, that to for said "competitors" could question, before to clearly expected X,XXX dramatically, the but I regulation. and probably that regulation, Â Thanks the remarks, I think X,XXX, see we Scott. after

little competitive not Charlotte's a and credentials, You brands Web the with or environment bear. so that can undercapitalized small bit frame certainly brand equity science the many to bring

category that declined and last clearly that can to grow according a optimistic are. we're So year, share Brightfield in we we

incremental velocity retailers provides competitors CBD same with shelf, because philosophy seeing an highest the that clearly seeing of than delisted. less every and for think by moment I shift on I But grab we're space that, real doing opportunity grow mix a as the that is, growth are element that share, shelf gummies to to factors are Although opportunity not to one including what clearly, contracting for the were to has we're think, predominant there then as brand the tinctures in as it us industry, it. at the

brand we retail brand, affordable, look that of can year as at for I real really would a smaller to, when to point brands, and so the by opportunity the we perceive looking once be packs first stay, people try.And that for also for make at, afford lifelong them beta know us Jessica this into time a through us. leverage the at formats e-com because a the is at price consumers value the consumer alluded And be the they other which we'll they they of on become SKU coming our later bring statistics brands throw introduction into that our that more what we to at personal the recreate basis, and for

think So ourselves and a forward going overnight It's to additional retail the point share view, to from from a position a here we we're and be e-com market. doing opportunity. I the as from about we're gain branding, not in of but pricing right, everything to excited go

Scott Fortune

meet -- gets standpoint? get high the of regulatory So to as we win timing that in can things do these can do regulatory left that on that, say we the Farm what's of be high seems meet number sense and regulatory any as occurs? And momentum expectations standards the standards that for closer expected Bill Kind -- or coming then of brands DC is kind it your get from the just H.R.XXXX, that quick it brands of that will board. on let's follow-up you side on a the of

Jacques Tortoroli

more you'll timing my better but have and I answer think and have. now do to brands. perspective they we've to it's much and you'll then invest have and competitors get Jared view it of this then capital going able of behind don't a don't to that. see compete a on lot to suspect brands many I fall and the the I we as brands to XXXX the pivot. have? he'll away start be certainly between FDA they I --Â won't to But about see have talked whatever And piece think gate, can't have know, at more is, not don't Â I'll look, And XXXXs the hand brands. How than the obviously through

have think market and add think anything number compared I to I competitors will we the the limited So what do very to you in a calling post-regulation, Jared, see continue there? today. want you'll of

Jared Stanley

how the Scott, it going are there's industry not to together, hey, passing restrictive to mean, bill I to get has look, that's we're Yes, you? a industry. support, come

the and and I this starting meant seeing calling that bill, amend what on is in guarantee gives corners which two legislation had reflects best the is where the will where come four the ensure this what what strategy. passing then final process, ultimately, this to FDA access. the supports by engage start that process, it's and industry for there's called But just hearings, legislative committee with the comments is see, technical drafting approach regular on for to process in concerns. focusing and to very which it'll unite, and have legislation, best we're have you industries we'll regular my in to you're the the you we're here industry, the we And committees because committees really, important order, order So consumer that jurisdiction.And there's and really strategies, we've we're the markup, their you in focusing really consumer, be the through the of

for So the on amend we important as corners. we made the next very come call to through bill process the, referred got is also is as to the the FDA this concerns address together order.The four to regular what part industry you've a by focusing

legislation corners, CBD politically and move a By in four which to ranking legislation so Health on members the Committees is and pass as we a using the processes, narrow House bit call House XXXX, we XX this very a going must piece what there's the know, the FDA environment, Congress like these bill. happens be and and process it's you will a ranking And a these majorities and right XXXX make of cosponsors can year. all other four spending Does H.R. very on now. have ride charged pricing chair with very instead Energy committees In and markup at not on get focusing we Commerce where Senate the really in a that we're words, it committee What of strategic. previously or we the President's Senate more on and members and look meaning catch Congress. can have on we pieces the and where but legislation the of desk hearing will of the freestanding that your corners, to at few the by support by You question? to this little where a drug is focusing groundwork focusing And in that fall, we realize see XXXX the bill. is this answer in the is bill, is

Scott Fortune

great Â Yes, that. that. I here. detail appreciate just last follow-up for And no, my That's

ReCreate, want kind of mentioned to I You lifestyle that brand follow-up launch. on just

SKU color here Kind a little for the the League but in You one of but second really to now positioning look provide opportunity with the product should kind half second summer drive that recreate of of here SKU towards fall? in brand thing how bit kind at mix roll rollout of and events -- the marquee head the there this the availability of the we half? growth or it, Kansas and of their Major Baseball

Jacques Tortoroli

just a was the And to pipeline then then in in you But let with that Jared I'll need states to game tinctures into recreate formats the the of and sort Sure, have the launching were first, Scott.Â to through kind additional SKUs some and I of the in launched we're in market say, the year. think, going take going pipeline what's should be initially I we concert ahead, come. retail and additional in July. see later Jared. formats Go to All-Star going we've and

Jared Stanley

at the the sleep. needs we're in states. were where wellness as ears. to wanted I new is we if consumers know needs they was we your our the targeted between alike, and what for we looking we X athletes But game to states played brand were recall, even inches saying the process, support really mental So don't engaged And and further. really took MLB

sleep you a Lions current Mane which to market. or and and then years number CBD or with SKUs gummies wellness the category, contend gets we've Charlotte's passionflower. market our hits really and in compare selling growth.And four CBD mushrooms the it one functional that So at SKU, is its look a legacy which us our a sleep built We the mushroom which we ago would the what functional but Web got melatonin product was what into support in that have a CBD whole in could brain uses it's today is I product, botanical but it five new mental is

to this get even a us gone then we lifestyle your botanical, So everyday for with active sleep to also to a allows product further functional more consumer. have get support

tart hit endurance a powder. well cherry, we've recovery as so as with a with muscle And deep

then So coming support states are tinctures that format. what as those to focusing are out. on innovation need are the to And in we're really more tinctures the new decline that also refer I spray behind an these

be energy this early soon to next also would formats. year. gym. endurance, in then your year throw So late and we're these powders and think on And focusing which sleep, working the grab opens or on Which powder come door innovation likely to states formats, are multiple also need go

Jacques Tortoroli

I we think, space us, consumer I think Millennials, Charlotte's that add for be against I white opportunity could well, groups, you just Gen going is into when an if really ReCreate the clear brands. need about positioned as the is Web in a targeted is think demographic Scott, the Z, to which

how the terms of foremost, mentioned it, consumers, to So the relative as in brand how more first basis for position I affordable and a we price Charlotte's Web. earlier approach and very targeted we on lifestyles, different brand,

we I and after, are targeted typically incrementality demographics think of running support cannibalization going MLB what risk. the see would and the through opposed within a deal us formulations, pricing, amplification and term fact need the the as the states, the more for So as go positions to the really that you as the of

with an is demographic the us a can who So for of consumers ongoing. we're very different more recreate comfortable the have relevant also that ability much but availability to brand, come into this unlocks be

they're our the rest Charlotte's needs and For the what their on platform shopping example, and e-commerce Web what depending looking on specific for. of portfolio,

new it's feel, really that a it's will, very today. a looking if as new messaging, you don't not at extension, different, this brand formulas, look but new address we're targeted and So product, line, consumer new we new states a new at

Operator

Canaccord. from Your next from question comes Derek Dley

Derek Dley

I bit difference just Is notable there tinctures. any impact margin difference the to about talk wanted and to the revenue? on a little gummies between Or is there? P&L the mostly

Jacques Tortoroli

really portfolio it Coleman, turn which produce -- margin. negative across pretty are a more produce -- of for mix do Jessica We or over but we today much than margins to whether revenue the in-house we I'll say that any is it's through tinctures gummies I'd healthy our and it it's spectrum. start color,

margin So up that put first seen a it's is mix with you've impact the it really quarter. of revenue margins the we impact, in than as the more

Derek Dley

And or that to the be point that then your make bring that co-manufacturing, where able the SKUs would gummy of potentially a guys you it higher mean, Do mix to have there overtime? that on a sense percentage in-house? is they to as capability revenue I do capacity

Jacques Tortoroli

capacity, question. for have yes, it minus. years more about, we Yes, XX% capital put And where few and the million answer call at capacity. The importantly, plus Derek, that you're is facility made state-of-the-art a I'll ago, we've thanks we into or recall, a investment operating $XX the

in-house gummies, And the there. will economics turn we your the to time. we've the well opportunity point, have only by that, invested we So the other over to have things the I looking favor, and come not as bring And we more capital. be our mean, at capacity, in to way, when certainly

execution to forward So, certainly we more of in come. one but strategic our of looking things the as plans, at look we're

Derek Dley

revenue volumes just however I can overall or is us it, you what your want sales or of product give versus And about your, focused? color days maybe premium then value on guys to percentage you these some think mix, put focus when more

Jacques Tortoroli

Jessica a the formats competition. but Charlotte's across in, of say priced Web I'd the all be of continues let come to premium rest I'll at our to Again,

that equity. about we're brand very concerned And keeping so

at we continue look to our standard set Web what moment. that's at? always we with new bring the of into premium complement in deserves we believe to kind a ReCreate we -- So to have And is we're do doing brand and a another that spot question appropriately still product pricing for relative much it's how the of overall, a SKU that where's consumers to But world, price then at to more Charlotte's opportunity continue premium competition. our sweet look pricing, we sort the of, index portfolio and for which

Derek Dley

you the of, of pricing, all? some these change start to that see time. XX XX or and starting dynamics mentioned Have just around there guess, hopefully I Is in the to you scale smaller brands stabilize? X,XXX, Yes, to terms industry in just over you couple I that of as Any over away then at go it seen think have changes you last pricing quarters? pricing going

Jacques Tortoroli

a seen our impact overall we grown relative in average has we've pricing, mentioned earlier, the Yes, down. mixed on as price stability as well. categories pricing But retail there's when come

so, the do that's only And don't equity, down. don't product products brand pricing on promotions. you and retail, when And there's you less to have relying price one then can we've and move been a turn thing at

protect the versus I'd set pricing need appropriately at for we of that to competitive brands us say, level remains, done index look So, again, But constantly we premiumization. to and stability of relative our pricing. to but the have we as that think

Operator

time. There no are further questions at this

proceed. may You

Jacques Tortoroli

we to first everybody you. in August. participating again our forward after quarter look in Â Well, for thank I'd and you quarter Thank our like second to to speaking results call,

Operator

gentlemen, you and your thank for you. participating and ask today. this conference concludes you for Thank that lines. call your please We Ladies disconnect

Charlotte's Web (CWBHF) 12 May 232023 Q1 Earnings call transcript