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JEWETT CAMERON TRADING CO LTD (JCTC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $9.27M (down 5% YoY), gross margin was 18.3% (vs 19.9% YoY and up from 14.5% in Q4 2024), and net loss was $(0.66)M or $(0.19) EPS; margin pressure stemmed from elevated ocean freight and upfront costs for in‑store displayers, partially offset by sequential improvement .
  • Fencing execution was a bright spot: Lifetime Steel Post (LTP) displayers nearly doubled to ~200 stores by Nov 30 and point‑of‑sale data showed strong end‑market demand, supporting second‑half restocking; wood fencing grew +4% YoY, while pet remained weak (-31% YoY) .
  • Management reiterated qualitative outlook: margin improvement expected as multi‑sourcing and pricing actions flow through, with seasonality favoring the second half; no formal numeric guidance was issued .
  • Potential stock catalysts: (1) continued LTP displayer expansion and replenishment orders, (2) monetization of the Hillsboro seed facility (listed at $9M vs ~$0.57M book), and (3) shareholder activism campaign urging “WITHHOLD” votes on director re‑elections .

What Went Well and What Went Wrong

  • What Went Well

    • Fencing momentum: “The Company doubled the new in‑store LTP displayers during the first quarter bringing the total number of displayers installed to nearly 200…Efforts to expand displayers…is expected to have a positive impact in the second half” .
    • Retail sell‑through validation: “Point‑of‑sale (POS) data for Adjust‑A‑Gate® and LTP products…highlighted strong end market year‑over‑year growth during Q1 2025” .
    • Product innovation: launch of Adjust‑A‑Gate® Unlimited gate kit to simplify installs, support larger sizes, and reduce sag, broadening professional and DIY appeal .

  • What Went Wrong

    • Pet category softness: pet product sales declined 31% YoY in Q1, reflecting continued weak consumer demand in the sector .
    • Margin pressure: gross margin fell to 18.3% from 19.9% YoY, driven by sharply higher ocean freight and one‑time costs for domestically produced displayers; management expects improvement as overseas production and multi‑sourcing scale .
    • Greenwood industrial wood softness vs prior year: sales fell to $0.8M from $1.1M YoY due to prior‑year catch‑up demand from municipalities/transit operators; Q1 operating loss of $(23,830) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$9.806 $13.2 $9.267
Gross Profit Margin %19.9% 14.5% 18.3%
Net Income ($USD Millions)$1.292 $(0.2) $(0.659)
Diluted EPS ($USD)$0.37 $(0.05) $(0.19)
Consensus Revenue ($USD Millions)N/A (unavailable)N/A (unavailable)N/A (unavailable)
Consensus EPS ($USD)N/A (unavailable)N/A (unavailable)N/A (unavailable)

Segment sales (unaudited):

SegmentQ1 2024 ($USD)Q1 2025 ($USD)
Industrial Wood Products$1,134,351 $842,033
Pet, Fencing and Other$8,622,972 $8,424,968
Seed Processing and Sales$48,518 —

KPIs:

KPIQ1 2024Q1 2025
LTP in‑aisle displayers installed (cumulative)N/A~200 by Nov 30, 2024
Fence products share of salesN/A~79%
Inventory balance ($USD Millions)$17.5 (Nov 30, 2023) $13.5 (Nov 30, 2024)
Cash balance ($USD Millions)$3.6 (Nov 30, 2023) $3.0 (Nov 30, 2024)
Stockholders’ equity per share ($USD)N/A$6.90
Current ratioN/A8.79 (as of Nov 30, 2024)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025NoneNo formal guidance; management expects seasonal lift in 2H from LTP replenishment and broader fencing momentum Maintained: qualitative only
Gross MarginFY 2025NoneAnticipates improvement in 2H as multi‑sourcing and pricing actions offset freight/tariffs; sequential progress already visible vs Q4 Maintained: qualitative only
Operating ExpensesFY 2025NoneContinued operational efficiency and headcount realignment to lower OpEx Maintained: qualitative only
Net IncomeFY 2025NoneManagement expects return to net income in FY 2025 (stated in Q4 call) Introduced qualitative target

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and FY 2024)Current Period (Q1 2025)Trend
Supply chain diversification & tariffsExpanded multi‑country sourcing (Bangladesh, Vietnam, Malaysia, Taiwan, Canada) to mitigate China tariffs; expect cost benefits late FY25 Ocean freight spikes compressed margins; multi‑sourcing and pricing actions expected to improve margins in future quarters Improving structural positioning, near‑term pressure
LTP displayer rollout~100 stores by Aug 31, 2024; plan to add hundreds more; strong early performance Nearly 200 stores by Nov 30, 2024; POS data strong; expect 2H replenishment Accelerating rollout
Adjust‑A‑Gate® UnlimitedProduct roadmap highlighted for launch Launched; low‑profile complete kit targeting pros/DIY, anti‑sag tech Execution progressing
Pet category demandFY 2024 pet down due to channel inventory normalization Pet sales down 31% YoY in Q1; demand remains weak Continued headwind
Operational efficiencyFY 2024 OpEx down YoY from legal settlement and realignment Q1 OpEx down YoY ($2.6M vs $2.7M) Improving cost discipline
Asset monetization (seed facility)Listed at $9M; significant asset vs $0.566M book Listing maintained; sale/lease options considered Ongoing monetization effort
Investor communicationsInitiated earnings calls; updated ticker to JCTC Continued calls and conference participation Higher visibility

Management Commentary

  • “The strategic initiatives…are aligning perfectly with the seasonal strength in demand expected in the spring… I am extremely pleased with the progress being made as we remain on track to achieve our goals to drive growth and profitability in fiscal 2025.” — Chad Summers, CEO .
  • “This focus has led to the listing for sale or lease of our 11.6‑acre seed cleaning facility… currently listed for $9 million, but has a book value of approximately $560,000 and is unencumbered by any loans.” — Chad Summers, CEO .
  • “Gross profit margins for Q1 2025 were 18.3%… The decrease… primarily relates to higher shipping and logistic costs… The costs of additional domestically produced in‑store display units… increased our costs… Initiatives… expected to result in margin improvements in future quarters.” .

Q&A Highlights

  • A Q1 2025 earnings call was held January 14, 2025; however, the company did not furnish a transcript for the Q1 call. Replay details were provided in the press release; Q&A themes are not available for synthesis .

Estimates Context

  • S&P Global Wall Street consensus for Q1 2025 EPS and Revenue was unavailable at the time of this analysis due to a data access limit; therefore, comparison to consensus cannot be provided (S&P Global data unavailable).

Key Takeaways for Investors

  • Fencing-led execution is the core narrative: LTP displayers nearly doubled in Q1 with strong POS, setting up 2H replenishment and revenue momentum .
  • Sequential margin improvement (Q4→Q1) is notable despite YoY compression; multi‑sourcing and pricing actions should aid 2H gross margin recovery if freight/tariff headwinds stabilize .
  • Pet remains a drag and merits cautious expectations near term; inventory reduction is progressing but demand normalization is incomplete .
  • Potential upside from asset monetization (seed facility sale/lease) could enhance equity and fund growth; monitor transaction timing .
  • Governance dynamics (activist “WITHHOLD” campaign) may catalyze board/executive actions; keep an eye on AGM outcomes and any strategic updates .
  • Near‑term trading implication: stock may react to tangible 2H order replenishment and margin prints; tariff news flow and freight rates are critical variables .
  • Medium‑term thesis: if fencing growth and product innovation (Adjust‑A‑Gate® Unlimited, LTP) scale while multi‑sourcing lowers COGS, profitability can rebase higher; execution on pricing, supply chain, and working capital remains key .

Citations: Q1 2025 press release and 8‑K ; Q1 2025 10‑Q ; FY2024/Q4 2024 press release and 8‑K ; Q4 2024 call prepared remarks ; Activist letter press release ; Investor presentation 8‑K .