Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Better Choice Co Inc (BTTR, Financial) reported a significant improvement in gross profit margin, increasing by over 600 basis points to 37% for the full year.
- The company achieved a 78% year-over-year improvement in adjusted EBITDA loss, reducing it to approximately $1.9 million.
- Fourth quarter revenue growth was impressive at 26% year-over-year, driven by a 32% increase across key digital platforms like Amazon and Chewy.
- Better Choice Co Inc (BTTR) successfully reduced SG&A expenses by 22% year-over-year, contributing to improved profitability.
- The company strengthened its balance sheet by extinguishing debt and accounts payable, resulting in a $6.2 million gain and a healthier working capital position of $7.9 million.
Negative Points
- Annual net revenues decreased by 9% as the company strategically exited non-core sales channels, impacting overall revenue.
- Despite improvements, the company still reported an adjusted EBITDA loss of $1.9 million for the full year.
- The company faced a net cash outflow from operations totaling $4.4 million, driven by paydowns of supplier obligations.
- Better Choice Co Inc (BTTR) had to rely on a $4.7 million equity offering in the third quarter to improve liquidity.
- The company reported a net loss of $168,000 for the year, although this was an improvement from the previous year's loss.
Q & A Highlights
Q: Can you elaborate on the strategic shifts that led to the 26% revenue growth in Q4?
A: Kent Cunningham, CEO: The growth was driven by a 32% increase in sales across Amazon and Chewy, supported by our participation in Black Friday promotions. This strategy helped us attract new-to-brand consumers, contributing to our best quarter with Amazon since Q1 2023. We also launched Halo on Chewy Canada, which further boosted our sales.
Q: How did Better Choice manage to improve its gross profit margin by over 600 basis points in 2024?
A: Nina Martinez, CFO: The improvement was due to operational efficiencies, including a 40% reduction in inventory and a 4% decrease in direct cost per pound. These were achieved through better demand forecasting and favorable supply terms with manufacturing partners.
Q: What are the expected benefits of the transactions signed for Halo's Asian operations?
A: Kent Cunningham, CEO: We signed a definitive agreement to sell Halo's Asian operations for $6.5 million in cash and a 3% royalty on sales over the next five years. This will provide consistent returns to shareholders and allow us to focus on North American and ex-Asia operations.
Q: Can you discuss the financial health and liquidity position of Better Choice as of the end of 2024?
A: Nina Martinez, CFO: We ended 2024 with $3 million in cash and $2.4 million in borrowing capacity. Our net working capital position increased over 200% to $7.9 million, reflecting our efforts to stabilize the business and improve our balance sheet.
Q: What are the anticipated outcomes of the SRX Health acquisition?
A: Kent Cunningham, CEO: The acquisition, expected to close in April, will position Better Choice as a leading global health and wellness company. It is anticipated to yield operational efficiencies and synergies, providing both near- and long-term growth opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
