cbdMD Beats Revenue Estimates, But Misses Earnings Estimates

cbdMD, Inc. (NYSE: YCBD) reported net sales of $10.6 million in its third fiscal 2020 quarter ending June 30, 2020, which beat the Yahoo Finance analyst’s estimates for revenue of $9.57 million. This was a 13% sequential increase over the second quarter and a 33% increase over the same time period for last year.

The company trimmed its net loss to $8.9 million from last year’s net loss of $29.2 million. The company said this was “mainly due to a non-cash expense of approximately $7.58 million in the Company’s contingent liability which is associated with earnout shares which may be issued under the terms of the December 2018 acquisition of Cure Based Development.”

The loss per share fell to $0.18 from last year’s loss per share of $1.19. This missed the average analyst’s estimates for a loss of $0.03. Two analysts cover the stock with an average price target of $3.56. The stock was falling by 7% in early trading to lately sell at $3.30.

“cbdMD reported its single biggest quarterly net sales in its history. Our decisions to concentrate on building brand equity for award-winning cbdMD and Paw CBD brands, as well as and focus on our e-commerce strength, has paid off. We have separated ourselves from our competitors and demonstrated that we can grow market share and be fiscally responsible at the same time, with our GAAP and non-GAAP operating results improving by 80% and 96%, respectively, from the comparable periods in fiscal 2019. With $15 million in cash on hand at June 30, 2020, we believe we have more than enough financial strength to grow our operations for the foreseeable future, absent any additional unforeseen impact from COVID-19,” said Martin Sumichrast, the Company’s Chairman and co-Chief Executive Officer.

Sales Highlights

cbdMD reported quarterly e-commerce, direct to consumer (DTC) net sales of $8.2 million, an increase of 77% year-over-year and a sequential quarterly increase of approximately 21%. The company’s e-commerce, direct to consumer (DTC) sales accounted for in excess of 77% of total net sales in the June 2020 quarter, an increase from 58% from prior year’s quarter. The company’s CBD pet brand, Paw CBD, reported an approximate 64% increase in net sales from its March 2020 quarter of approximately $750,000 to approximately $1,229,000 for its June 2020 quarter.

The company is hosting a call after the market close.