Simply Better Brands Corp. (TSX: SBBC) (OTCQB: PKANF) reported its second quarter financials ending June 30, showing a 40% increase in revenue, reaching $23.6 million, as the company tries to invests in growing its brands and expanding its reach.
The Vancouver-based company, which focuses on clean food, skincare, and plant-based wellness, reported key commercial milestones including Trubar gaining national distribution at Costco, its hemp-based wellness brand PureKana adding over 61,925 customers, and No B.S. Skincare expanding its retail presence in CVS Health and TJ Maxx.
Despite the revenue growth, the company reported a net loss of $6.3 million for the quarter, primarily due to increased operating expenses of $18.4 million, including $13.4 million in marketing expenses.
Still, CEO Kathy Casey expressed confidence in the company’s priorities and outlook for the year.
“As our Q2 2023 financial and commercial results illustrate, we are positioned for continued revenue growth, profit improvement, and debt reduction in 2023,” Casey said in a statement. “Our strategic priorities remain to lead consumer-centric innovation and relentlessly acquire customers to these emerging brands by driving category and channel expansion.”
PureKana has more recently been making a play into the $196 million hemp-based pet category with products such as calming chews and hair & coat drops.
“As an estimated 60% of PureKana’s loyal customers have pets, the growth opportunity is expected to be sizeable,” the company said.
The company’s 2023 outlook remains unchanged, with expectations for consolidated net sales to exceed $80 million, gross margin as a percentage of net sales to be between 58% and 60%, and a positive adjusted EBITDA in the range of $3-4 million.
Management believes that the investments made in the second quarter will result in benefits in the latter half of 2023 and beyond.
“Even with our marketing and capability investments in Q2, we remain confident in delivering the current 2023 outlook,” Casey said.