Better Choice Company ((BTTR)) has held its Q4 earnings call. Read on for the main highlights of the call.
The latest earnings call from Better Choice Company painted a generally positive picture, emphasizing significant improvements in profitability measures such as gross profit margins, net loss, and EBITDA. While revenue growth was robust, particularly in the fourth quarter and international markets, the company faced challenges with a decline in annual net revenues and ongoing EBITDA losses. Overall, strategic pivots and enhancements in financial health contributed to an optimistic outlook for the company.
Improved Gross Profit Margin
The company reported a gross profit margin of 37% for the full year, marking an increase of over 600 basis points. This improvement reflects Better Choice’s strategic focus on enhancing operational efficiencies and cost management, contributing to a healthier bottom line.
Significant Improvement in Adjusted EBITDA
Better Choice Company saw a remarkable 78% year-over-year improvement in adjusted EBITDA loss, reducing it to $1.9 million. This significant progress underscores the company’s effective cost control measures and strategic financial management.
Fourth Quarter Revenue Growth
The fourth quarter was particularly strong for Better Choice, with revenue growing by 26% year-over-year. This growth was primarily driven by a 32% increase in sales across major platforms like Amazon and Chewy, highlighting the company’s successful e-commerce strategy.
Debt Extinguishment and Financial Health
The company achieved a $6.2 million gain from extinguishing debt and accounts payable, which significantly contributed to a healthier balance sheet. This financial maneuvering resulted in a working capital position of $7.9 million, enhancing the company’s financial stability.
International Growth
International revenue grew by 18%, with notable contributions from the Asia Pacific market. This expansion demonstrates Better Choice’s effective penetration into international markets, bolstering its global presence.
Improved Net Loss and EPS
Year-to-date GAAP net loss improved by 99% year-over-year, with EPS improving to a $0.11 loss per share from a $32 loss per share in 2023. These improvements reflect the company’s successful efforts in reducing losses and enhancing shareholder value.
Decline in Annual Net Revenues
Despite various successes, Better Choice experienced a 9% decline in annual net revenues. This was attributed to strategic exits from non-core sales channels and the closure of an unprofitable direct-to-consumer business, which were necessary steps for long-term profitability.
Ongoing Adjusted EBITDA Loss
Despite improvements, the company reported an adjusted EBITDA loss of approximately $700,000 for the fourth quarter. This ongoing loss indicates areas where further financial optimization is needed.
Forward-Looking Guidance
Looking ahead, Better Choice Company is poised for continued growth, driven by its focus on e-commerce channels and strategic acquisitions. The company anticipates further expansion through the acquisition of SRx Health Solutions, expected to close in April, which will strengthen its position in the pet health and wellness sector. With profitability improvements and strategic exits from non-core channels, Better Choice is well-positioned for future success.
In summary, Better Choice Company’s earnings call highlighted a positive trajectory with significant improvements in profitability and strategic growth initiatives. While challenges remain, particularly with ongoing EBITDA losses and a decline in annual net revenues, the company’s strategic pivots and financial health improvements offer a promising outlook for the future.