Else Nutrition Expects Q2 Revenues To Climb As Much As 38% Due To Baby Food Shortages

Else Nutrition (TSX: BABY) appears to be one of the few beneficiaries of the ongoing baby food crises in the United States. The company this morning substantially improved its guidance for the second quarter as a result of sudden demand amid product shortfalls from its peers.

The company is currently anticipating second quarter revenues to amount to between $2.0 and $2.2 million. The figure represents anywhere from a 25% to 38% increase over the firms performance in the first quarter of this year.

We see a strong acceleration in sales on Amazon.com, and other channels, driven by new and existing customers. While revenues on Amazon.com already increased by 40% QoQ in 1Q22, our Amazon.com daily sales doubled in the last few days. In addition, the number of Else subscribers on Amazon.com grew by 20% over the previous four weeks, reaching more than 1200,” commented CEO Hamutal Yitzhak.

The growth comes amid a baby food crises in the US, which is the result of shipping and supply chain problems caused by the pandemic, which was then compounded with a major recall by Abbott Laboratories, the manufacturer of Similac and other major brands, earlier this year. As per Bloomberg, 43% of formula was out of stock at retailers across the US for the week ending May 8, and the shortage is expected to continue to get worse before it gets better.

The guidance follows the company yesterday reporting its first quarter financial results, wherein it reported revenues of just $1.6 million for the period ended March 31. Comparatively, the firm had seen revenues of $1.3 million in Q4 of 2021. The low sales figure comes despite the firm having a presence at 1,300 retail locations, as well as at several prominent online retail locations such as Amazon and Walmart.com.

The company reported a net loss for the period of $7.2 million, while its cash position currently sits at $18.6 million.

Else Nutrition last traded at $1.25 on the TSX.

Information for this briefing was found via Sedar and Else Nutrition. 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.

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