After the markets closed on the Wednesday before Thanksgiving, Humble & Fume Inc. (CSE: HMBL) reported its first-quarter fiscal 2022 financials for the three months ended September 30, 2021 with revenue falling to $18.1 million versus $19.4 million for the same time period in 2021. The company blamed the drop in revenue on a decline in sales as management in the U.S. continued to focus on selling high-margin products with competitive pricing and discounting tactics. Humble said that the Canadian operations saw revenue climb to $8.6 million, a 27% increase year-over-year as a result of the expansion of sales agency partnerships, along with higher margin sales from its core accessories business.
Humble delivered a net loss of $1.7 million, or $0.02 per diluted share, compared to a net loss of $4 million, or $0.07 per share, for last year’s first quarter. The company attributed the improvement in net losses year-over-year to the settlement of the convertible debenture on June 14, 2021, resulting in nil accretion and fair value adjustment.
“As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers,” said CEO Joel Toguri. “We are encouraged by the strong revenue growth we saw this quarter from our Canadian operations, which was driven by our expanding cannabis brands partnerships and higher margin sales from our accessory portfolio. We have made huge strides towards our expansion into cannabis distribution in the United States. Last week’s announcement of Johnson Brothers investment, through Green Acre, is transformative for the legal cannabis distribution market in North America. Together with our acquisition of Cabo Connection, Humble is executing upon our business strategy and readying for its launch in California.”
On November 24, the company said it would close its Florida warehouse facility on November 30. Humble said it has made the decision to focus resources on the Texas and Nevada warehouse locations, which are able to adapt and scale with the growing business.
Mr. Toguri added, “This past quarter was transitional for us following our public listing on the Canadian Securities Exchange. While we saw an increase in Canadian revenue, the U.S. operations saw a decrease as a result of our decision to focus the business on healthier margin sales, reducing the mix of high volume, low margin products. Aligned with our strategy to expand into cannabis distribution in the U.S., we implemented a new operating structure in October, which included headcount reductions. Our new structure reprioritizes our customers, identified redundancies and redirects resources to this opportunity. As part of these changes, in October we began the closure of our Florida warehouse, which will result in cost structure savings while consolidating shipping from our two remaining warehouses and improving customer experience. We are aggressively focused on becoming the leading cannabis distributor in North America, which we believe will ultimately deliver revenue growth and profitability.”