cbdMD Reports 9% Revenue Growth to $4.75 Million in Q2 Fiscal 2025

cbdMD, Inc. reported its financial results for the second quarter of fiscal 2025, revealing a total net sales figure of $4.75 million for the three months ended March 31, 2025, a 9% increase from $4.38 million in the same period last year. The company achieved a gross profit of $2.96 million, representing a gross margin of 62.3%, up from 59.0% in the prior year. However, the company recorded a net loss of $1.48 million attributable to common shareholders, a significant improvement compared to a net loss of $4.01 million in the same quarter of the previous year. For the six months ended March 31, 2025, total net sales reached $9.86 million, a slight increase from $9.75 million in the prior year, while the net loss for the period was $2.47 million, down from $6.01 million.

The company noted several strategic developments during the quarter, including a focus on optimizing its product portfolio and enhancing marketing efforts. A significant change was the successful conversion of all outstanding shares of Series A Preferred Stock into common stock, which was completed on May 6, 2025. This conversion eliminated approximately $6.7 million in accrued dividends, which the company believes will improve its stockholders' equity and help regain compliance with NYSE American listing standards. Additionally, cbdMD launched its new hemp-derived beverage line, Oasis, which has received positive consumer feedback and secured distribution through major alcohol distributors in several states.

Operationally, cbdMD reported a decrease in operating expenses to $3.45 million for the quarter, down from $4.13 million in the prior year, reflecting ongoing cost-saving initiatives. The company also experienced a decline in inventory levels, which it attributed to conservative cash management and delays in product testing, leading to stock shortages. To address this, cbdMD has increased inventory investments to ensure better product availability. The company’s e-commerce sales accounted for 76.5% of total net sales, while wholesale sales contributed 23.5%, indicating a growing reliance on direct-to-consumer channels.

Looking ahead, cbdMD remains focused on improving profitability and cash flow while exploring international expansion opportunities. The company is also committed to product innovation, with plans to enhance existing offerings and develop new products. Despite the positive trajectory in some areas, management acknowledged challenges in the broader market and emphasized the need for continued strategic adjustments to navigate these conditions effectively. The company’s ability to sustain operations and meet its financial obligations will depend on its success in executing its growth strategies and securing additional funding as needed.