Chris Brennan's questions to Leatt (LEAT) leadership • Q4 2024
Question
Chris Brennan noted that Leatt's revenue is similar to 2020 levels while operating expenses have doubled, leading to recent net losses. He asked if the $100 million sales target is still feasible and whether the company expects to achieve profitability on the path to that goal, or only after reaching it. Brennan also inquired about management's view on a normalized level of sales for the industry, given current depressed conditions.
Answer
CEO Sean MacDonald affirmed the $100 million sales goal is feasible and stated that the company expects to be profitable on the way to achieving it, not just upon arrival. He explained that the current cost structure is designed to support future growth and that profitability should grow as the company returns to double-digit revenue growth. Regarding normalized sales, MacDonald found it difficult to provide a specific level due to varying recovery rates across categories but agreed the industry is still depressed, highlighting that Leatt's low market share presents a significant opportunity for growth regardless of the broader market.