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01/15 10:38
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings report shows significant revenue growth (88%) and strong retail expansion (206%), along with a positive acquisition premium (64% to 102%). Despite a decline in gross margin, the strategic acquisition by ETI and the financial improvements suggest a positive outlook. The Q&A section didn't reveal any major concerns, though management's lack of clarity on ETI's U.S. strategy could be seen as a minor risk. Overall, the financial performance and acquisition terms are likely to drive a positive stock price movement.
Net Revenue $21.6 million, an 88% increase over Q3 '24. This growth is attributed to the expansion of distribution, accelerated marketing efforts, and advancements in the innovation pipeline.
Gross Profit $8.9 million, an increase of 76% versus Q3 '24. This reflects the growing strength of the TRUBAR brand and execution of the company's strategy.
Gross Margin Percentage 41%, which was down compared to Q3 '24. The decline is due to continued investment in trial and awareness programs with retail partners to build the brand.
Adjusted EBITDA $1.4 million, an increase of 39% versus the year-ago quarter. This improvement is a result of the company's strategic initiatives and operational efficiencies.
Retail Revenue Growth 206% increase in the quarter, driven by the expansion of the retail footprint across North America and the addition of over 500 stores.
Direct-to-Consumer Revenue Growth 170% increase in the quarter, reflecting the company's focus on diversifying revenue streams and enhancing direct consumer engagement.
Club Channel Revenue Growth 50% increase in the quarter, showcasing steady growth in this segment.
TRUBAR Kids line: Launched an allergy-friendly nut-free bar that went into Sprouts nationwide. This launch is generating solid listing momentum across multiple channels, including e-commerce. Focused on developing new flavors, pack sizes, and bar sizes for new occasions.
Retail footprint expansion: Added more than 500 stores across the U.S., including Midwest, Pacific Northwest, and Colorado, with major grocery chains like Meijer, King Soopers, and Fred Meyer. Expanded in Canada with launches in Costco, Pattison Food Group, and Healthy Planet stores.
Restructuring and efficiency improvements: Completed major restructuring, divested noncore assets, enhanced quality and safety programs, improved supply chain efficiency, and implemented a new ERP solution.
Acquisition by ETI: ETI will acquire all outstanding shares of TRUBAR at CAD 1.64 per share, representing a 64% premium to the last closing price and 102% premium to the 60-day volume weighted average price. The transaction is expected to close in Q1 2026, subject to shareholder approval.
Gross Margin Decline: Gross margin percentage decreased to 41% in Q3 2025 compared to the previous year, due to continued investment in trial and awareness programs with retail partners. This could impact profitability in the short term.
Dependence on Retail Expansion: Growth strategy heavily relies on expanding retail footprint and increasing store presence, which may face challenges such as market saturation or competition for shelf space.
Supply Chain and Operational Risks: The company has undergone significant restructuring, including supply chain efficiency improvements and ERP implementation, which may pose risks if not effectively managed.
Integration Risks with ETI: The acquisition by ETI introduces potential risks related to integration, cultural alignment, and execution of strategic objectives under new ownership.
Regulatory and Shareholder Approval: The acquisition is subject to shareholder approval and other customary closing conditions, which could delay or jeopardize the transaction.
Full Year Revenue Guidance: Reaffirmed full year guidance for net revenue in the range of $65 million to $70 million, representing a 50% to 60% year-over-year increase. Growth is driven by the current footprint, new store openings in 2025, and increasing sales velocities across all channels.
Retail Expansion: Strengthened regional footprint with the addition of over 500 stores in the U.S. (Midwest, Pacific Northwest, and Colorado) and major grocery chains such as Meijer, King Soopers, and Fred Meyer. Expanded retail presence in Canada with launches in Costco, Pattison Food Group, and Healthy Planet stores.
Innovation Strategy: Launched TRUBAR Kids, an allergy-friendly nut-free bar, in Sprouts nationwide. Focus on developing new flavors, pack sizes, and bar sizes to cater to new consumption occasions.
Future as Part of ETI: Anticipates leveraging ETI's global expertise and resources to further scale the TRUBAR brand and expand its market presence.
Share Acquisition by ETI: Under the terms of the agreement, ETI will acquire all the outstanding shares of TRUBAR. TRUBAR shareholders will receive CAD 1.64 per share, all in cash. This represents a premium of 64% to the closing price of TRUBAR shares on the TSX Venture Exchange on November 21, 2025, and a 102% premium to the 60-day volume weighted average price of the TRUBAR shares on the TSXV as of November 21, 2025. The transaction is subject to the approval of TRUBAR shareholders and other customary closing conditions. Shareholders will vote on the transaction at a special meeting anticipated to be held in January 2026, with the closing of the transaction expected during the first quarter of 2026.
The earnings report shows significant revenue growth (88%) and strong retail expansion (206%), along with a positive acquisition premium (64% to 102%). Despite a decline in gross margin, the strategic acquisition by ETI and the financial improvements suggest a positive outlook. The Q&A section didn't reveal any major concerns, though management's lack of clarity on ETI's U.S. strategy could be seen as a minor risk. Overall, the financial performance and acquisition terms are likely to drive a positive stock price movement.
The earnings call summary and Q&A indicate strong financial performance, with growth in gross profit and operating income, alongside strategic investments in product development, sales, and partnerships. Positive factors include robust Cash App Borrow performance, AI integration, and new Bitcoin integration. Although management was vague about some future growth timelines, the overall sentiment is optimistic with accelerated growth across key metrics. This, combined with positive guidance and strategic initiatives, suggests a positive stock price movement over the next two weeks.
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