cbdMD Reports Q1 Fiscal 2025 Results with $5.1M in Sales and Net Income Turnaround

cbdMD, Inc. reported its financial results for the first quarter of fiscal 2025, ending December 31, 2024, revealing total net sales of $5.1 million, a decrease of 4.9% compared to $5.4 million in the same period last year. The decline in revenue was primarily attributed to a $0.5 million drop in e-commerce sales, offset by a $0.2 million increase in wholesale sales. Despite the year-over-year decrease, the company noted a sequential revenue growth of 12%, marking the first time in its public history that revenues increased from the previous quarter. The gross profit margin improved slightly to 66.5%, up from 66.2% in the prior year.

The company reported a net income of $15,095 for the quarter, a significant turnaround from a net loss of $996,501 in the same period last year. This improvement was driven by a reduction in operating expenses, which fell by approximately 26% to $3.5 million from $4.6 million year-over-year. The decrease in expenses was attributed to management's ongoing efforts to optimize the cost structure, including cuts in marketing and staff-related expenses. The operating loss narrowed to $86,272 from $1,065,835 in the prior year, indicating a positive trend in operational efficiency.

In terms of strategic developments, cbdMD launched a new line of hemp-derived ready-to-drink beverages under the Herbal Oasis brand during the quarter, aiming to capitalize on the growing beverage category within the hemp industry. The company also expanded its product offerings with reformulations of several sleep products to enhance effectiveness and taste. Additionally, cbdMD has been actively pursuing relationships with traditional retail accounts and distributors, including recent partnerships with Sprouts and DoorDash, to broaden its market reach.

Operationally, cbdMD reported a total of 5,543,124 shares of common stock outstanding as of December 31, 2024, an increase from 3,939,057 shares at the end of the previous quarter. The company’s cash and cash equivalents decreased to $1.97 million from $2.45 million, while its working capital deficit widened to $2.8 million, primarily due to accrued dividend payments. The company continues to face challenges related to its capital structure, particularly concerning its Series A Preferred Stock, which has implications for its compliance with NYSE American listing standards.

Looking ahead, cbdMD remains focused on improving profitability and cash flow while exploring additional funding options. The company acknowledges the substantial doubt regarding its ability to continue as a going concern within the next twelve months, contingent on its ability to enhance operational performance and secure necessary capital. Management is optimistic about the potential for future growth, particularly through product innovation and market expansion, as it aims to stabilize its financial position and achieve compliance with regulatory requirements.