Else Nutrition, a plant-based baby and children nutrition company, experienced a significant decline in revenue for the latest quarter. This drop came after the company shifted limited inventory earlier in the year from e-commerce sales to new retail channels. As a result of this news, the company’s shares saw a decrease of 18% in morning trading on the Toronto Stock Exchange, bringing the year’s rise to 5.5%.
Collaboration with Danone
On Monday, Else announced a multi-stage collaboration with Danone, a global food and drink company. This partnership will initially involve adding Else Nutrition’s products to Danone’s portfolio. Following this news, the stock more than doubled, indicating the positive reception to this collaboration.
Decrease in Revenue
Else Nutrition reported a decrease in revenue for the third quarter, with revenue falling from C$2.2 million to C$1.7 million compared to the previous year. Sales to physical retailers in the U.S. and Canada saw an 8% increase during the quarter, while online sales declined by 40% in comparison to last year.
Plans for Growth
CEO Hamutal Yitzhak acknowledges the production and inventory adjustments made, but also mentions that there is still work to be done to address the effects caused by production issues. The company is currently in the process of rebuilding sales in e-commerce channels, which it believes will lead to increased growth by 2024.
Expectations for the Future
Else Nutrition anticipates a strong return to growth starting from the current quarter. This is due to the ramping up of manufacturing and the expectation that retailers who placed high initial stocking orders in past quarters will sell through their inventory and start placing follow-on orders. The company projects that revenue for the fourth quarter will be between C$2.7 million and C$3 million.