CBD product maker Charlotte’s Web Holdings Inc. (OTC: CWBHF) reported a 29% drop in first-quarter sales for the period ending March 31, as it works to reignite growth through a series of strategic initiatives and cost reductions.
The MLB-partnered company posted revenue of $12.1 million, down from $17 million in the first quarter of 2023. The top-line decline reflected continued headwinds facing the CBD industry like regulatory ambiguity and competitive pricing pressure, the company said.
“The first quarter started slowly in terms of sales volume,” CEO Bill Morachnick said in a statement. “This is being addressed with solid progress in our ‘True North’ turnaround initiatives.”
Those efforts include relaunching the company’s e-commerce platform in the second quarter to improve marketing agility and consumer experience, the company said. It also said its refocusing its business-to-business retail strategy and launching new CBD product formats like the recently debuted “Stay Asleep” CBN gummies.
Still, its B2B retail revenue declined 30% to $4 million, with some mass retail partners exiting the CBD category. Direct-to-consumer ecommerce revenue fell 31% year-over-year to $7.8 million in the first quarter.
The firm reported a net loss of $9.7 million for the quarter, wider than the $2.9 million loss a year earlier. Its adjusted EBITDA loss was $4 million.
The Louisville, Colorado-based company said it took actions to reduce selling, general and administrative expenses by approximately $15 million in 2024 versus 2023 levels. These included headcount reductions and operating efficiencies.
CFO Jessica Saxton said Charlotte’s Web continues “to act with agility to further optimize cost structures across the company, streamline operations, and eliminate inefficiencies.”
“We are optimistic about the impact of these initiatives and expect to see an improvement in our SG&A for the full year,” she added.
As of March 31, Charlotte’s Web had $38.5 million in cash remaining and $48.6 million in working capital.
Morachnick signaled optimism that the company’s brand strength and innovation pipeline, including products beyond CBD extract like its DeFloria neurology drug candidate, will revive growth in the coming quarters.
The post Charlotte’s Web sales slump as cost cuts, turnaround efforts ramp up appeared first on Green Market Report.
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