Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF) revenue held steady during the quarter, with the company managing to cut down on losses as it starts to reel in profits from its distribution deal with Cookies.
The Toronto-based cannabis and cannabis accessories distributor reported its first quarter fiscal 2023 financial and operating results for the three months ended Sept. 30.
Total revenue came out to $18.4 million during the period, which is relatively in line with last year’s first-quarter revenue of $18.1 million. Net loss was $4.7 million, versus $1.6 million last year and $7.7 million sequentially.
Earnings were a loss of three cents per share, an improvement from the previous quarter’s loss of seven cents per share.
“Our focus continues to be optimizing growth opportunities while proactively right-sizing the business,” said CEO Joel Toguri. “We are very pleased with our efforts to expand our portfolio of cannabis brands and broaden the scope and scale of our retail relationships.”
North American accessories business grew by 11% over the quarter, while operating expenses fell by $2.3 million (21%), driven by $3.8 million (44%) in lower costs. A $1.5 million (57%) rise in costs related to the expansion of its California distribution business offset those gains.
Expenses related to accessories sales were down 44% over the quarter at $3.8 million.
The company’s total accessories inventory levels continue to fall as the company sells off old and slow-moving items, it said. Inventory balance fell to $11.2 million over the year, down $6.5 million versus $17.8 million the first quarter of 2021, and falling $1.3 million (10%) sequentially.
The company’s revenue from its California cannabis revenue grew 68% over the quarter.
Toguri added, “California continues to be a dynamic market providing ongoing growth opportunities to help great brands, like Cookies, scale throughout the state.”
In a statement, that company stated that revenue from its exclusive distribution partnership with Berner’s Cookies brand started in October.
Humble said that its California cannabis distribution business revenues rose over the quarter, with its retail customer base growing 258%.
“The number of deliveries experienced a similar increase growing from 128 in the prior quarter to 602, representing an increase of 370%,” the company said in a news release.
Since Humble’s accessories business embarked on a restructuring and cost-cutting trek last year, its overall operational expenses have fallen by $1.5 million, including $3.8 million sequentially.
The company said that salary and wages experienced the most significant reduction due to lower headcount, generating savings of 20.7% over the year and 14.6% sequentially.
“Our ongoing focus on profitable growth includes right-sizing our organization to ensure we have the most effective and efficient team in place to serve the needs of our brand and retail partners,” Toguri said.