cbdMD, Inc.

Third fiscal quarter net sales were $5.6 million, up 20% from $4.6 million a year ago. First 9 months revenue was $16.2 million, up 12% from $14.5 million. Gross margin was 54.7% versus 61.5% last year, and 9-month gross margin was 57.3% versus 63.5%. Operating loss was about $1.1 million versus a loss of about $905,000, while adjusted EBITDA loss improved to about $507,000 from $624,000. Net loss attributable to common shareholders was about $1.2 million, or $0.11 per share, versus about $1.2 million, or $0.21 per share. For the first 9 months, cash used in operations was about $2 million, and cash at June 30 was about $2.1 million with $4.7 million of working capital. Management said the new cost-reduction program targets $100,000 to $150,000 in monthly savings, and it said the company is modeling cash breakeven in the low-$6 million to mid-$6 million range of quarterly revenue.

Ronan Kennedy framed the quarter as one of top-line progress but admitted the bottom line was not satisfactory, saying the company made deliberate investments and absorbed one-time costs. He highlighted Oasis acceleration, including South Carolina expansion, a Texas distributor change that more than quadrupled store access, and record July depletions that were up 35% over the third-quarter average. He also emphasized the strategic value of the new Kava beverage launch, saying it helps fill shelf gaps and create revenue visibility into 2027 while the regulatory picture remains unsettled.

Bradley Whitford focused on the financial drivers behind the quarter: wholesale revenue increased about $629,000, or 61%, and Bluebird contributed more than $500,000 of revenue. He said gross margin compression came mainly from the lower-margin wholesale mix and higher warehouse labor tied to repacking, plus an additional $187,000 increase in inventory reserves. He also quantified costs, including about $200,000 of extra professional fees and a quarterly adjusted EBITDA loss of about $507,000, while noting the company had $2.1 million in cash, $4.7 million in working capital, and generated about $2 million of financing cash during the first 9 months.

Analysts focused on whether management’s cost cuts could bring quarterly cash burn down and how quickly savings would show up; management said the $100,000 to $150,000 monthly target is cash-related and that most of it should be realized by the end of the fiscal fourth quarter, with only about $10,000 a month tied to the warehouse lease later. Questions also centered on Oasis momentum, and management said growth is coming from both more distribution and better sell-through at existing doors, especially after the Texas distributor change. On product strategy, management said the new Kava product launched today, that more botanical launches are planned before year-end, and that M&A remains focused on accretive deals that can produce short-term cash flow.