Stryve Foods has flagged the potential of reducing EBITDA losses to breakeven in its new fiscal year as the US biltong maker builds toward profitability.
The Nasdaq-listed business launched a transformation strategy under CEO Christopher Boever, who replaced Joe Oblass in May 2022, to make its manufacturing more efficient, lower costs through changes to its product portfolio and expand distribution.
While sales fell 41% in 2023 as a result of the elimination of “low-quality revenue”, Stryve Foods has set a path to add $10m-plus in sales in the new year at the top-end of its guidance.
“This year has been pivotal for our long-term strategy, designed to position and prepare us for our next phase, which is delivering profitable growth,” Boever told analysts to discuss the past 12-month performance.
“We have navigated through a transformation that now has our company on a solid foundation, one that has been right-sized with structural improvements across the enterprise.
“We implemented pricing actions and now have our unit economics in position to accelerate profitable growth.”
The Texas-based owner of the Kalahari Biltong, Braaitime and Vacadillos brands, along with its namesake line, forecast its sales will reach $24-30m in 2024, compared to the $17.7m achieved last year.
Losses were narrowed in 2023 across most key metrics, although gross profit turned into positive territory to the tune of $2.4m, versus a $0.7m loss.
Operating losses shrank to $15.4m from $32.1m a year earlier, while adjusted EBITDA losses were reduced to $11.8m from $25m.
On the bottom line, net losses were $19m, compared to $33.1m, while the loss in earnings per share was paired to $8.59, from $16.18.
“Investments in technology and process improvements have led to significant cost savings and product quality,” Boever explained.
“We are now a lean, agile operation with efficiencies gained up and down the enterprise as evidenced by the reduction in operating expenses and adjusted EBITDA improvements over the last 18 months.”
CFO Alex Hawkins said the sales guidance is based on volumes accelerating each quarter as the year progresses, replete with a “significant advancement” in the gross margin from 13.7%.
“The operating leverage derived from increasing volumes each quarter, coupled with advancing gross margins, positions us to approach an adjusted EBITDA breakeven point in the fourth quarter of this year should we reach the higher end or exceed our net sales guidance range, absent any externalities or unforeseen fluctuations in beef prices,” Hawkins told analysts.
