cbdMD, Inc. reported fiscal 2025 results that showed a narrowed operating loss of $2.1 million, a $1.2 million improvement over the $3.3 million loss in fiscal 2024. Net sales fell modestly to $19.1 million from $19.5 million, while the company’s net book value surged from under $2.0 million to approximately $7.2 million at year‑end, driven by the conversion of Series A preferred equity and the sale of Series C convertible preferred stock for $2.25 million in gross proceeds.
The company’s revenue mix shifted slightly: direct‑to‑consumer sales accounted for $14.7 million—77% of total—down 6% from fiscal 2024, whereas wholesale revenue rose to $4.5 million from $3.8 million. Gross profit margin held steady at 62% for both years, indicating that the company maintained pricing power even as sales volumes slipped. Operating expenses were trimmed, with SG&A costs falling by $1.2 million to $14.1 million, a reduction that helped offset the revenue decline and contributed to the improved operating loss.
cbdMD’s management highlighted disciplined cost management as a key driver of the operating improvement. CEO/CFO Ronan Kennedy noted that “our core cbdMD business continues to gain traction, and our Herbal Oasis team is seeing consistent month‑over‑month improvement in case sell‑through across key markets as distribution expands throughout the Southeast.” The Herbal Oasis THC‑seltzer line has extended distribution into Texas and other states, supporting the company’s growth strategy. However, the audited financial statements include a going‑concern qualification, underscoring ongoing financial uncertainty despite the balance‑sheet turnaround.
Investors reacted cautiously, citing the going‑concern qualification and concerns about future earnings potential as primary headwinds. While the company achieved a stronger operating loss and a healthier balance sheet, the persistent net loss of $4.3 million and the auditor’s qualification tempered enthusiasm. The market’s mixed reaction reflects a focus on the company’s ability to sustain profitability and meet regulatory compliance requirements in the near term.
The results signal that cbdMD is executing on cost‑control initiatives and expanding its product distribution, but the company remains in a precarious financial position. Management’s emphasis on disciplined spending and strategic growth in the Herbal Oasis line suggests confidence in a turnaround, yet the going‑concern qualification indicates that investors should monitor the company’s liquidity and future earnings guidance closely.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.