Starco Brands Announces First Quarter 2024 Results and Business Update
Reported Net Revenue Increased by 39% to
Company Updates Net Revenue Guidance to be Between
Conference Call to be Held at
Management Comments
Starco Brands’ exceptional rise from inception a couple of years ago to now with over
Year-to-Date Business Highlights
Whipshots®
- Whipshots has landed distribution in Kroger with new authorizations that will go into effect in the fall of 2024 with the potential for the brand to be in 57% of Kroger’s spirits-licensed locations.
-
In
January 2024 , Whipshots announced a nationwide partnership at Museum of Ice Cream’s three US locations inAustin ,Chicago andNew York to celebrate the launch of its limited-edition Strawberry flavor. -
In
February 2024 , Whipshots expanded intoMaine ,Mississippi , andNew Hampshire . This marked a significant milestone as Whipshots extended its presence across 41 states, reinforcing its position as a trailblazer in the spirits industry since its national retail debut inFebruary 2022 . -
In
April 2024 , Whipshots expanded intoAlabama ,North Carolina (completing coverage in theSoutheastern U.S. ) andPennsylvania . The brand is now available across 43 states and theDistrict of Columbia as a result of direct consumer requests for Whipshots availability in their states.
Skylar
-
Skylar bolstered its executive ranks with the hiring of
Alex Alston as Vice President of Sales and Marketing. Alston brings a wealth of experience honed over two decades in the realms of beauty and luxury e-commerce. After a distinguished tenure at L’Oreal, whereAlex Alston was groomed for leadership roles, he spearheaded the successful launches ofCharlotte Tilbury and r.e.m beauty (Ariana Grande ). Alston also held senior marketing positions atNET-A-PORTER andRose Inc. -
Skylar continues to be successful at
Sephora , with new authorizations to enter the rapidly growingSephora @ Kohl’s channel. There are currently over 850Sephora @ Kohl’s locations. -
Skylar secured distribution in both Anthropologie’s online and brick-and-mortar retail locations beginning in
June 2024 . -
Skylar rolled out the Hair & Body Mist format of its popular Boardwalk Delight to skylar.com and sephora.com, as well as
Sephora brick-and-mortar retail locations.
-
In
April 2024 ,Soylent rounded out its protein portfolio with the launch of Soylent Complete Protein Powder, making the brand a serious player in the protein supplement market. Industry experts project this rapidly expanding sector will grow to$47 billion by 2032. The brand’s science-backed nutrition formula debuted in two flavors, Chocolate and Vanilla, and contains: 30g of complete protein, 0g of sugar, 28 essential vitamins and minerals, 5g BCAAs (branch chain amino acids), 3.5g MCT and 65mg DHA supporting muscle recovery and bone health and contributing to a cholesterol-lowering diet. -
Soylent executed its first-ever Walmart Featured Space and Sales (FSS) display program inMay 2024 . -
Soylent will be rolling out its Complete Meal Ready-to-Drink and seasonal SKUs to Kroger in the third quarter of 2024. - AWG shipping new distribution into the corporate Plan-o-Gram (POG) program, with potential of 4,000 stores.
Winona Popcorn Spray
-
Winona Popcorn Spray Butter flavor continues to expand retail distribution due to its uniqueness, incredible sensory experience, repeat purchase both online and in store and price point. Currently, Winona is distributed at Walmart, HEB, Meijer, AWG and Big Lots. The following depicts the brand’s 2024 growth path inclusive of the launch of Winona’s new Garlic Butter popcorn spray flavor, which is scheduled to roll out in the third quarter of 2024:
- Walmart nationwide in 1,800 stores, increasing to storewide 4,200 stores in fourth quarter of 2024 for Garlic Butter popcorn spray flavor;
- Meijer storewide in 260 stores;
Albertson nationwide in 1,500 stores in fourth quarter of 2024;- Target nationwide in almost all 1,900 stores in second quarter of 2025;
- HyVee chainwide in 280 stores;
Stater Bros chainwide in 169 stores;- Big Lots’ 300 stores;
-
Sobeys in
Canada nationwide in 1,400 stores in fourth quarter of 2024; and - American Wholesale Grocers in 500 locations, with the potential of growing to 4,000 stores.
Art of Sport (AOS)
- The Company re-launched AOS on Amazon in the first quarter of 2024 focusing on the brand’s best-selling personal care SKUs and scents. The new product line consists of the following SKUs: Antiperspirant, Deodorant, Shampoo & Body Wash, Daily Face Wash and Daily Face Lotion.
-
In the second quarter of 2024, AOS broke into new categories launching its cutting edge AOS Sunscreen and AOS Protein Powder.
-
AOS Protein Powder will begin distribution chainwide at Kroger’s 132 Fred Meyer stores in
October 2024 , with full distribution in all divisions in 2025, equating to over 1,700 stores.
-
AOS Protein Powder will begin distribution chainwide at Kroger’s 132 Fred Meyer stores in
- In the third quarter of 2024, AOS has plans to launch more products in the over-the-counter pharma space, furthering the brand’s goal to “own the locker room”.
First Quarter of 2024 Financial Results
Reported net revenue for the first quarter of 2024 was
Gross profit improved to
As the Company grows, Marketing, General and Administrative expenses were
Reported unadjusted net loss for the first quarter of 2024 was
Non-GAAP Adjusted EBITDA
Adjusted EBITDA, which is net loss adjusted for stock-based compensation, gain on disposal of property and equipment, gain on settlements, interest and other expense, net, depreciation of property and equipment, amortization of intangible assets, (recovery) provision for doubtful accounts, and provision for income taxes and certain other items that impact the periods presented. Adjusted EBITDA is provided so that investors have the same financial data that management uses to assess the Company’s operating results with the belief that it will assist the investment community in properly assessing the ongoing performance of the Company for the periods being reported and future periods. The presentation of this additional information is not meant to be considered a substitute for measures prepared in accordance with
Adjusted EBITDA was a loss of
Adjusted EBITDA is a non-GAAP financial measure. See the supplementary schedules in this press release for a reconciliation thereof to the most directly comparable GAAP measure.
Q1 24 | Q1 23 | |||||
Net Income |
(4,270,556 |
) |
(1,663,130 |
) |
||
Interest expense |
199,173 |
|
97,313 |
|
||
Other expense (income) |
76,779 |
|
(66,871 |
) |
||
Depreciation & Amortization |
706,271 |
|
7,463 |
|
||
Fair value share adjustment loss (gain) |
1,921,949 |
|
1,179,154 |
|
||
Stock comp |
483,466 |
|
482,805 |
|
||
Adjusted EBITDA |
(882,918 |
) |
36,734 |
|
Balance Sheet
As of
First Quarter of 2024 Segment Review
Skylar:
Segment reported net revenues of
2024 Updated Outlook
The Company projects between
The Company has made the strategic decision to reinvest and reallocate capital towards further accelerating the growth of its high-potential brands. This increased investment, along with bolstering the Company’s operational infrastructure, will temporarily impact profitability. However, this strategic reallocation positions the Company for stronger long-term growth. The Company will provide an updated fiscal year 2024 Adjusted EBITDA range by the third quarter of 2024 once it has better visibility into the demand trajectory as it ramps up production and expands distribution into approximately 10,000 stores cumulatively across its portfolio.
The Company continues to scale its brands and at this stage of the Company’s life cycle will be cautious yet deliberate about investing and focusing its free cash on its businesses in order to build valuable enterprise and shareholder value versus conserving growth capital for short term earnings esthetics.
Conference Call
The conference call to discuss these results is scheduled for today,
Forward-Looking Statements
Any statements in this press release about the Company's future expectations, plans and prospects, including statements about our financing strategy, future operations, future financial position and results, market growth, new product launches and product growth, total revenue, as well as other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "target," "will," or "would" and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The Company may not achieve the plans, intentions or expectations disclosed in the Company's forward-looking statements, and you should not place undue reliance on the Company's forward-looking statements. All forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time. Therefore, readers are cautioned that actual results could differ materially from those expressed in forward-looking statements. The Company undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. This cautionary statement entirely qualifies all forward-looking statements in this document.
Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements the Company make as a result of a variety of risks and uncertainties, including risks related to the Company's estimates regarding the potential market opportunity for the Company's current and future products and services, the impact of the COVID-19 pandemic, the competitive nature of the industries in which we conduct our business, general business and economic conditions, our ability to acquire suitable businesses, our ability to successfully launch new products and seize market share, the Company's expectations regarding the Company's sales, expenses, gross margins and other results of operations, and the other risks and uncertainties described in the "Risk Factors" sections of the Company's public filings with the
About
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Investor Relations
ICR
646-277-1254
John.Mills@icrinc.com
ICR
646-277-1283
Deirdre.Thomson@icrinc.com
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