Better Choice Company, Inc. reported a net loss of $964,000 for the three months ended March 31, 2025, a significant improvement compared to a net loss of $2.83 million during the same period in 2024. The company's net sales decreased by 9% to $7.16 million, down from $7.90 million in the prior year. This decline is attributed primarily to the closure of its direct-to-consumer (DTC) channel in June 2024, which had previously contributed to sales. Despite the drop in revenue, the cost of goods sold also decreased by 10% to $4.78 million, leading to a gross profit of $2.38 million, consistent with a gross margin of 33%.
In terms of operational efficiency, Better Choice has made strides in reducing its operating expenses, which fell by 32% to $3.47 million from $5.08 million in the previous year. This reduction was driven by lower marketing costs and a decrease in employee compensation expenses, reflecting a strategic shift in the company's focus. The company reported a loss from operations of $1.09 million, a notable improvement from the $2.47 million loss reported in the same quarter last year.
Strategically, Better Choice has undergone significant organizational changes, including the acquisition of SRx Health Solutions, which was completed on April 25, 2025. This acquisition is expected to enhance the company's portfolio by integrating a specialty pharmacy business, thereby expanding its operational capabilities. Additionally, the company has exited certain retail partnerships, including Petco, to streamline operations and focus on more profitable channels. The company’s employee headcount has also been adjusted, contributing to the reduction in operating expenses.
Geographically, the company has seen varied performance across its sales channels. The digital sales channel accounted for $2.73 million, while international sales reached $3.99 million, indicating a shift in focus towards international markets. The company has also reported a significant reliance on a few key customers, with four customers representing 96% of accounts receivable as of March 31, 2025. This concentration poses a risk but also highlights the potential for strong partnerships moving forward.
Looking ahead, Better Choice aims to leverage its recent acquisition and streamline its operations to achieve profitability. The company is focused on new product innovations and expanding its market presence, particularly in international markets. However, it acknowledges the ongoing challenges posed by inflationary pressures and market competition, which may impact its financial performance in the near term. The company remains committed to improving its operational efficiency and exploring new growth opportunities to enhance shareholder value.