Key Takeaways
- In the third quarter of 2023, Jones Soda Co. reported a revenue of $4.5 million, a slight decrease from the previous year.
- The company saw a significant improvement in gross profit margins and reduced net loss.
- Revenue from the Mary Jones cannabis business contributed to these results.
- The company's focus on supply chain optimization and strategic pricing adjustments were key factors in this financial performance.
Financial Performance Overview
Seattle, WA--Jones Soda Co. announced its third-quarter financial results for 2023.
According to Yahoo! Finance report, the company's revenue for this quarter was $4.5 million, down from $4.8 million in the same quarter last year.
The decline was primarily due to reduced sales in the food service channel and a slower sales velocity in the grocery channel.
Cannabis Business Growth
The report noted that Mary Jones cannabis brand generated approximately $220,000 in revenue.
This marks a significant year-over-year increase, showcasing the brand's growing market share and successful product launches.
“While the third quarter was more challenging than originally anticipated, we continued to make noteworthy progress towards profitability and I believe we are setting the stage for encouraging growth initiatives in 2024,” said David Knight, President and CEO of Jones Soda, in the report.
“Our core bottled soda business experienced some temporary headwinds in our food service channel, while sales velocity in our grocery channel has been slower than expected. Despite this, the work we’ve done to optimize our supply chain led to a 600-basis point expansion in our gross margin," Knight added.
Gross Profit and Net Loss
The report highlighted that gross profit as a percentage of revenue rose by 600 basis points to 32.9%.
Enhancements in supply chain management and strategic pricing drove this increase.
Net loss improved to $0.9 million, substantially from a $1.7 million net loss in the same period last year.
“Looking at Mary Jones, we grew our cannabis-related revenue by 93% year-over-year as we continue to take market share and launch new products in California," Knight added in the report. "While our expansion plans have experienced some delays, we were able to launch into the state of Washington by the end of the third quarter and have seen early success there.
"We currently expect to be up and running in Michigan by the end of the fourth quarter and live in Nevada by early 2024. Our team has been working hard bringing our cannabis-infused flavors to market in different formats, and we expect to announce some exciting new growth initiatives for this business in the coming months.
Management's Outlook
The report stated that the focus remains on:
- Expanding the Mary Jones cannabis business with launches in new states and innovative product formats.
- Continuing innovation and strategic initiatives in both the core soda and cannabis segments.
- Building on the foundation laid for the Jones Soda brand to unlock significant shareholder value.
What We Think
Jones Soda's third-quarter results reflect a resilient performance in a challenging environment, with promising strides in its cannabis venture.
The company's strategic focus on optimizing its supply chain and adjusting pricing has paid off, improving gross margins and reducing net losses.
These results, combined with the growth of the Mary Jones brand, position Jones Soda well for future success.
The company's commitment to innovation and expansion in its core soda and cannabis business indicates strong growth and value-creation potential in the coming years.