Charlotte’s Web narrows losses in third quarter despite lower revenue | How to order Skittles Moonrock online

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Colorado-based Charlotte’s Web Holdings (TSX: CWEB) (OTCQX: CWBHF) reported that its third-quarter revenue fell 11.9% since last year to $12.6 million, as the hemp extract maker deals with regulatory uncertainty and reduced retail shelf space.

The CBD wellness company’s revenue for the quarter that ended Sept 30 was a slight miss on analysts’ expectations of $12.99 million, according to Yahoo Finance data. Direct-to-consumer sales declined 13.4% to $8.2 million in the quarter, while business-to-business revenue dropped 10.7% to $4.3 million from a year prior.

“Our return to quarter-over-quarter growth in 2024 signals that our strategic direction is paying off,” CEO Bill Morachnick said in a statement, highlighting new retail partnerships, including one with Walmart, which is now carrying CBD topicals in 827 stores.

The company reported a narrower net loss of $5.8 million, versus a loss of $15.1 million in the comparable period a year ago.

To deal with revenue headwinds, Charlotte’s Web implemented significant cost reductions, with SG&A expenses dropping 36.2% to $12.7 million. The company expects operating expenses for the full year to be more than $20 million lower than 2023.

With demand slowing, the firm is trying to diversify beyond CBD, leading it to launch a functional mushroom gummies line that targets specific wellness needs, such as focus, stress support and energy. The expansion allows Charlotte’s Web to tap into the functional mushroom market, which is projected to grow at a more than 11% CAGR through 2030, according to Grand View Research data cited by the company.

The firm also cited regulatory challenges from several states adopting new restrictions on CBD products this year.

“The company continues to assess the business and financial impacts of the new regulations, including steps that can be taken to address the new product formulation, packaging and labeling requirements,” according to management’s discussion and analysis.

Charlotte’s Web’s cash and cash equivalents stood at $24.6 million as of Sept. 30, down from $47.8 million at the end of 2023.