Charlotte’s Web Posts Flat Quarterly Revenues of $25.1 Million

Charlotte’s Web (TSX: CWEB) posted its third quarter financial results this morning, posting flat revenues on a quarter over quarter basis of $25.1 million. The firm had posted revenues of $25.0 million for the second quarter of 2019, resulting in the firm showing minimal growth on a quarter over quarter basis.

Gross profit declined slightly relative to the second quarter, with the firm posting $17.8 million before fair value adjustments in the third quarter, compared to $18.4 million in the second quarter. Expenses however were up, with the firm spending $19.6 million versus $16.2 million in Q2. General and administrative expenses came in as the highest line item, with $13.0 million in expenditures, followed by $6.2 million in sales and marketing.

Charlotte’s Web posted a net loss of $1.3 million for the third quarter.

Looking towards the balance sheet, cash decreased by $16.4 million to that of $34.9 million during the quarter. Receivables also decreased to that of $6.6 million. Inventories and prepaid expenses were up however, to $57.6 million and $15.3 million respectively. The prior quarter saw $34.5 million in inventories, and $9.5 million in prepaids. In terms of liabilities, payables declined to $4.0 million while accrued liabilities grew to $16.1 million.

During the third quarter, Charlotte’s Web placed an emphasis on improving its distribution lines. The firm saw its products enter 787 new retail locations for large distributors of food, drugs, and medicine, while also entering 296 new retail locations of regional chains. While this expansion occurred in the third quarter, minimal increased sales were exhibited during the period. The justification of which may be that it takes time for retail sales to commence at new retailers, with better flow through potentially being seen in the following quarter.

Charlotte’s Web closed yesterdays session at $13.28 on the TSX.

Information for this briefing was found via Sedar and Charlotte’s Web. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.