Laird Superfood - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered 20% YoY net sales growth to $12.0M, driven by Wholesale (+47% YoY) while e‑commerce grew 2%; gross margin was 39.9% (down ~190 bps YoY) amid higher trade spend, commodity inflation, and mix shift to Wholesale.
• Results vs S&P Global consensus: revenue modest miss ($12.14M* vs $11.99M actual) and EPS beat (-$0.057* vs -$0.03 actual), on higher gross profit dollars but increased marketing/selling and stock‑based comp.
• Guidance reaffirmed: FY25 net sales growth 20–25%, gross margin in the high‑30s, breakeven adjusted EBITDA, and ~($2M) operating cash use to build inventory; GAAP net loss expected.
• Key narrative: execution on retail distribution (grocery/club) and Amazon offset tariff/commodity pressures; inventory was built to meet demand and pre‑buy raw materials, with AR timing shifting cash collection into Q3.

What Went Well and What Went Wrong

• What Went Well

  • Wholesale channel momentum: +47% YoY; 48% of sales as distribution expanded across grocery and club; trade spend remained nearly flat.
  • Sustained gross margin quality: 39.9% despite tariffs/commodities; management characterized margin “among the best in our industry” and maintained FY margin outlook.
  • Adjusted EBITDA positive for third straight quarter ($0.15M), evidencing operating leverage as top line scales.
  • CEO: “Very proud of our second quarter results… delivered 20% net sales growth… and approximately 40% gross margin in a challenging… environment”.

• What Went Wrong

  • Gross margin compression vs prior year (down ~190 bps) on higher promotional spend, commodity cost inflation, and channel mix shift to Wholesale.
  • Net loss widened YoY to ($0.36M) on higher marketing/selling and stock‑based compensation despite revenue growth.
  • Cash outflows from operations ($4.1M YTD) as inventory was built to address prior out‑of‑stocks and pre‑buy for tariffs; AR timing also weighed on cash in Q2.

Transcript

Speaker 5

Good afternoon. Thank you for attending today's Laird Superfood, Inc. second quarter 2025 financial results. My name is Jayla, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I would now like to turn the conference over to our host, Trevor Rousseau. Please proceed.

Speaker 4

Thank you, and good afternoon. Welcome to Laird Superfood's second quarter 2025 earnings conference call and webcast. On today's call are Jason Vieth, Laird Superfood's President and Chief Executive Officer, and Anya Hamill, our Chief Financial Officer. By now, everyone should have access to the company's earnings release, which was filed today after market close. It is available on the investor relations section of Laird Superfood's website at www.lairdsuperfood.com. Before we begin, please note that during this call, management may make forward-looking statements within the context of federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those described. Please refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. I'll turn the call over to Jason.

Speaker 2

Thank you, Trevor, and good afternoon, everyone. Welcome to Laird Superfood's second quarter 2025 earnings conference call. I'm Jason Vieth, CEO of Laird Superfood, and I'm joined today by our CFO, Anya Hamill. Let me start by saying how proud I am of our team's performance this quarter. In a challenging environment with ongoing economic pressures, commodity inflation, and shifting consumer preferences, we once again delivered impressive financial results that underscore the resilience and appeal of the Laird Superfood brand. Net sales grew 20% year over year to $12 million in Q2, marking another quarter of robust top-line expansion. This growth was fueled by our strategic focus on wholesale, which surged 47% and now represents just under half of our total net sales, driven by distribution gains and velocity growth in grocery and cold channels.

Our e-commerce channel also helped steady with positive 2% growth in a very challenging digital market, contributing 52% of total sales, thanks to continued strength on Amazon. This quarter obviously marked an acceleration in our stated strategy to intentionally grow wholesale to become the largest percentage of our total business, and I am proud that we are succeeding in making that transition. Looking at our product categories, coffee creamers led the way with 44% growth, making up 56% of gross sales in Q2, as consumers increasingly seek out our plant-based functional creamer options. Coffee, tea, and hot chocolate products grew 44% as well, driven by strong growth in our coffee products. This is in line with our intent to become a powerhouse in functional coffee solutions and speaks to consumers' interests in turning their morning ritual into a healthy and nutritious way to start their day.

On the profitability front, we achieved a gross margin of 39.9%. While slightly down from last year due to higher trade spend, commodity costs, and some small tariff impact, our margin level remains among the best in the industry. Operationally, we've demonstrated agility in managing our supply chain, even amidst tariff pressures, allowing us to deliver positive adjusted EBITDA of nearly $150,000 this quarter, a meaningful improvement from prior year's white loss. This marks our continued progress towards sustainable profitability, with year-to-date adjusted EBITDA at just over $500,000. Our balance sheet remains solid, with $4.2 million in cash and no debt, though we strategically invested in inventory this quarter to support demand and mitigate tariff costs and supply chain risks, leading to $4.1 million in cash used from operations year to date. We expect to normalize this in the coming quarters as we convert our inventory into cash.

These results position us as one of the fastest growing food companies in the public markets, outpacing many peers in the health and nutrition space. For context, we've seen mixed performances across the industry this quarter, and these announcements reflect a sector that's navigating inflation and softer demand in certain channels, yet rewarding brands with innovation and execution, brands like ours. We expect tariffs to remain a wildcard for the back half of this year and beyond, but our team continues to make headway in our cost structure through key strategies, such as direct sourcing of our materials and freight optimization. We are proud to not have taken any tariff-related price increases while still delivering our gross margin targets, thereby delivering our highest quality health and wellness food products to consumers at the best value possible.

We believe that this gives us a strategic advantage versus many of our competitors, while also leaving open the opportunity to increase our price at a later date if the conditions miss us. The economic environment may feel overall shaky right now, but we are building on tremendous momentum and are cautiously optimistic as we head into the second half. The consumer landscape is dynamic, but our focus on clean, plant-based superfoods, backed by Laird Hamilton's legacy and our commitment to quality, positions us to capture share. Going forward, we'll continue to invest in brand building, innovation, and operational efficiency to drive long-term value. With that, I'll turn it over to Anya for more financial details. Anya.

Speaker 0

Thank you, Jason, and good afternoon, everyone. I will now provide you with some additional details on the second quarter of 2025 financial results and our outlook for the full year. I am pleased to share that we have delivered another strong quarter of high growth top line, robust gross margins, and disciplined spend management. Net sales grew 19.9% to $12.0 million, compared to $10.0 million in the prior year period and $11.7 million in the last quarter. Similar to the first quarter, our wholesale channel led the company's growth in the second quarter, increasing by 47% year over year and accounting for 48% of our total net sales. This growth was driven by distribution expansion and velocity acceleration itself in grocery and club stores. E-commerce sales increased by 2% year over year and contributed 52% of total net sales, led by continued growth on the Amazon platform.

Gross margin in the second quarter delivered a robust 39.9%, compared to 41.8% in the corresponding prior year period. Although Q2 gross margins were about two points lower than in the first quarter of 2025 and in the corresponding period a year ago, we are very pleased with these results given commodity inflation in our key raw materials such as coffee and coconut milk powder and increased tariff costs. These results show resiliency in our ability to hold gross margins in the high 30s, which is at the level of best-in-class CPGs despite the inflationary pressures and even without using pricing as a lever. Our supply chain team continues to drive efficiencies by directly partnering with key raw material suppliers and co-packing partners to find cost savings to offset rising commodity costs.

Operating expenses increased $0.7 million in the second quarter compared to the same quarter last year, driven primarily by two reasons: one, increased marketing, advertising, and selling expenses due to sales volume growth; and two, slightly increased general and administrative expenses driven primarily by stock-based compensation, which is a non-cash expense, and largely offset by broad cost reduction measures. Net loss for the second quarter was $0.4 million compared to a $0.2 million loss in the prior year period, and adjusted EBITDA was positive $0.1 million compared to a loss of $0.1 million in the same quarter prior year. This $200,000 improvement in adjusted EBITDA was driven by top-line growth, margin management, and discipline around cost control, as we are well on the way to break-even and profitability. Now, regarding our balance sheet, we ended the quarter with $4.2 million in cash and no debt.

The increase in cash usage in the second quarter relative to the first quarter was primarily driven by our decision to bolster our inventory in order to meet higher demand for our products, address out of stocks experienced earlier in the year, as well as forward purchase of raw materials in anticipation of potential tariffs on the import of raw materials that we source outside of the U.S., particularly in Southeast Asia. As we sell through this forward purchase inventory during the second half of 2025, we expect our cash balance to normalize and increase by the end of the 2025 fiscal year. In addition, during the second quarter, our accounts receivable balance was elevated due to timing of shipments, which resulted in a shift in payments received from Q2 to Q3.

We continue to project that we have sufficient cash to fund our operations as we grow our business and make operating improvements that drive us forward to break-even and profitability. We also have an asset-backed line of credit available for our use should we need it. We exited the second quarter with strong momentum in our core categories, exciting innovation, and confidence in our team and our brand. Despite ongoing macroeconomic uncertainty, particularly within the e-commerce landscape, we remain confident in our ability to deliver on our full-year growth plans. Based on the strength of our first half performance, the continued momentum in the wholesale channel, and strong execution across our organization, we are reaffirming our full-year 2025 net sales growth guidance in the range of 20% to 25%, gross margin to hold in the upper 30s, and break-even adjusted EBITDA.

We expect full-year operating cash usage to be approximately $2 million, driven by an incremental investment in inventory to support top-line growth and minimize out of stocks. I will turn the discussion back over to Jason for any closing remarks.

Speaker 2

Thank you, Anya. Our 20% sales growth is among the best in our industry and speaks to the demand for our healthy, functional foods. I want to reiterate our confidence in our mission and our team and in the long-term opportunity for Laird Superfood. Our brand is strong in health and wellness, and our balance sheet remains attractive and with no debt. Despite the challenges presented by tariffs and a less confident consumer, we are optimistic in our team's ability to navigate these issues and deliver long-term value for our shareholders. Thank you for joining us again today, and thank you for your continued interest in Laird Superfood. This concludes our second quarter 2025 prepared remarks, and we are now ready to open the call to questions.

Speaker 5

At this time, if you would like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star one. As a reminder, if you're using a speakerphone, please remember to pick up your headset before asking a question. I'll pause briefly here as questions are registered. Our first question comes from George Arthur Kelly, ROTH Capital Partners. George, your line is now open.

Speaker 1

Hey, everybody. Thanks for taking my questions. My first one for you is just about your revenue guide for the year. If I just kind of play that through in the back half, it bakes in a pretty significant kind of step up versus the revenue performance in the first half. I was just wondering what you're seeing that gives you confidence that you'll be able to hit on that two-half step up.

Speaker 2

Hey, George. It's Jason, and I'll jump in and let Anya add any color that she'd like to as well. It's a good question and obviously something that we've scrutinized quite a lot as well. You know, the climate right now is not a high-growth climate for most companies, so we feel really great that we're able to affirm that guidance, and that we are still growing at a 20% or more clip, or projected to grow at that clip, over the course of this year. You remember a couple of things happened in the first half of the year that we don't anticipate happening in the second half.

The first one occurred in Q1 where we had a significant out-of-stock issue that impacted sales of our powder creamer products, some other products as well, but predominantly our powder creamer products, to the tune of we estimated over $1 million worth of sales. Secondly, there was a really significant Q2 event that took place when UNFI was hacked with a cyberattack, and we lost shipments for a number of weeks then as well. That's a large part of our business, of course. We primarily have two distributors to the natural and unital portions of our business, that being UNFI and KE, and when half of that goes down, it really makes an event. We don't anticipate having events of that magnitude in the back half of the year.

At the same time, we picked up an additional distribution that'll start to go live here over the course of the next weeks to next months, and feel like we're in a really great position to expand, with additional distribution gains that have been pitched and not yet awarded. We'll be watching those, obviously, very closely as we go forward. Finally, George, I'd tell you the liquid business that went through a transition at the end of last year into the beginning of this year took a couple of months to really get fully back to where it had been. We're just hitting our stride on that again right now. You're seeing velocities back up to approximately where they were on a per ounce basis, or total ounce basis, and sales basically coming right back to where they were as well.

A little bit of pain as we went through that transition. A lot of great learnings, but a little bit of pain, and we can work through that as well. A lot of things going really well for us as we start the second half out.

Speaker 1

Okay. That's all. That's really helpful. Maybe just to follow up with a few more questions on your explanation. Do you, is there a way to quantify the impacts from that cyberattack? Secondly, on the liquid product, can you give more detail? I think you're talking about the transition in sizing. I think I saw recently that there's a new and improved formula. At least it's one of the liquid products I saw was labeled that way. Is that part of the transition? Just generally, how is the liquid product performing? Are you pleased with what you're seeing? In more detail, that would be helpful.

Speaker 2

Yeah, you bet. Good questions. With the UNFI, we obviously can't get a perfect number on the UNFI outage, but our estimation, George, would be that it probably cost us somewhere in the neighborhood of 10% at retail, maybe 8% to 10% at retail, over the course of that quarter. It all occurred in Q2, and it's obviously been restored now. That would be our best guess. I don't know. You're probably looking at a few hundred thousand dollars of sales that would have been lost in that case. They're not as significant as what we saw with our out-of-stocks, mostly because it didn't last as long and it was restored. They were restored on most products within a couple of weeks. With regards to the liquid, that was the transition.

Essentially, what happened is we went from 16 ounces to 25.4 ounces upsizing, and we had assumed that we would see pretty steady GDP, with a little bit of bumpiness as you go through that transition. It always gives some. I think we had spoken about that a couple of quarters ago, and it just endured a little bit longer than we expected. We had one retailer in particular that was not fully on board with the pack change when it came out. It took probably an extra month to get them to bring the products in. They're all in now, and they're flowing and doing fine, but we were out of stock at that retailer, probably more like six weeks, actually, in total. They're one of our larger, not the largest, but one of our larger retailers. That was certainly impactful.

I mentioned there were a lot of good lessons learned coming out of that. If I could do it all over again, we would have called out the upsizing of the product to the consumer. I think there was a value perception initially as consumers saw the price go up, but the package didn't look that different. You assume that consumers see that you had 50% or just about 50% more or a little over 50% more product, but not everybody picks that up intuitively. That was just a little bit of self-inflicted wounds in there, George, and then a little bit of market challenges. It took us just a couple more months than we anticipated to get through that transition. I'm happy to say velocities are now up where we had modeled them to be, just pushing right up at about the conversion we expected.

GDPs are just about to where they were. We're still working on a few of the smaller accounts that are meaningful still when you add them all up in totality, but we're feeling really good about the closure that we made over the last six or eight weeks on that. You know, we'll get all the way to bright here over the next couple of months.

Speaker 1

Okay. Great. Just one last one from me. Innovation items for the back half of the year and then into 2026, where are you most focused? Where do you think you have the most opportunity? That's all I had. Thank you.

Speaker 2

Yeah, you bet. We're really excited about we've got an incredible innovation spot. The hardest thing right now is staging it and metering it in a cadence that the team, you know, we have three small teams, so we have to make sure we meter it and try to outsource cadence that they can keep up with. Right now, we're working on a couple of things. Ironically, we're working on another transition of the liquid creamer. It's great that we have all these levels learned. We have been able to create a super optimized formula where we're going to be able to take out the last, we have a gum in there right now that we're able to remove, and we're able to take out, move everything to coconut sugar, get rid of the coconut oil and make it an entirely coconut cream-based product.

We're flipping it to organic, and we're putting it into a plastic bottle that will be a post-recycled plastic bottle. Very consumer-friendly right now. The irony is these paper packages that seem like they would be recyclable are not actually recyclable in the United States because you need a two-step system and very few immunities to that. We're really excited about where that goes. We're applying all those learnings that we had the last time around to make sure that we don't have to have any of those hiccups as we go forward this time. That's a big piece of it. That will be a very differentiated product in the marketplace. We're getting great reception from the retailers that we've spoken with. I think we've spoken with pretty much all of them at this point. We have a protein-based coffee product that we're really excited about.

There are a number of iced coffees with protein that have launched over the course of the last year, the 18 months. We saw a concept like this last summer, and we've been honing our formula. We're really excited about that. This will be our first foray into dairy products. There'll be more on that. You probably have heard from us before that dairy is an area that we've been excited about. We believe that there is a superfood entry into the dairy space, where we can leverage the benefits of our functional mushrooms as well as a cleaner source of dairy. We're looking, you'll see, we're looking at organic and other attributes as our entry point. It's a very hot category, not only anymore online, but really moving into retail. We're having some great discussions there as well and feel like we really make hay with that particular product.

Those are the two largest things to see us looking at over the course of the next two quarters, George. Of course, next year, that dairy platform will really start to expand with some exciting launches that we've been foreshadowing for a while.

Speaker 1

Thank you.

Speaker 2

You bet. Great to talk to you, George.

Speaker 5

Our next question comes from Nicholas Sherwood with Maxim Group. Nicholas, your line is now open.

Speaker 3

Thank you. Thank you for taking my questions. Can you first go into how the Amazon Day kind of promotional period went for the company? Hello?

Speaker 2

Sorry, Nicholas. We lost you there.

Speaker 3

Sorry. Yeah. Can you go into how the Amazon Day promotional period went for the company, and any sort of customer acquisition metrics that you have following that period?

Speaker 2

Yeah. Hey, Nicholas. Yeah, Prime Day went well for us. It went to plan. We had a couple of really strong days out of the gate, and then it tapered off a little bit in the last couple of days. It was a little bit of a different pattern than what we've seen in the past where consumers shop for a while and then end up purchasing later in the Prime days. At least that's been the behavior that we've seen in past years. We had a couple of really strong days out of the gate, and we came in, I think, Anya, we came in right, I think, right where we expected to be.

Speaker 0

Yeah, I don't know.

Speaker 2

Before the plan. You know, Amazon in general, you guys probably see with the e-commerce numbers, e-commerce is slowing for us as it is for a number of other consumer brands. We're fine with that. At the end of the day, we've talked a lot on previous calls about how we really want to encourage our consumers to shop wherever they want to shop. We really try, through our pricing and our margin structure, to not care, to help them to not care and for us to not care. The way we've structured this, just as a reminder to everyone, is DTC is our highest-priced portfolio.

We do that because if consumers are interested in the brand, willing to shop here, interested in all of the education that we provide on that site, and they do it all from the comfort of their home and they don't have to really take any effort to go, drive out, use their gas, use their time to go to a grocery, then we feel like that should be the highest-cost, highest-priced products in our portfolio. Amazon, on the flip side, while we'd like to run the same prices, ends up being a little bit more competitive just due to the marketplace nature of that platform. When you look at grocery, you find that those are the best prices, how consumers are using their time, their gas, to go over and shop.

Obviously, when you have all the physical products there, it's a very competitive marketplace, and we want to make sure that we are as competitive as we can be. When you look across our margin structure and the way that we leverage marketing into those various channels, what we try to do is make ourselves completely apathetic to where the consumer shops. We want the consumer to shop where they want to shop, and we want to not care. We've really tried to build a model that gets us to approximately the same margin across all the channels. You really see that, I think, in our results this quarter and where we saw a significant shift towards that bricks-and-mortar business, which we've been saying is our strategy since the day I walked in the door here. We're really excited to see the growth in the bricks-and-mortar side.

Of course, we'd like to hold on to as much e-commerce sales as we can. At the end of the day, we feel the consumer will shop where they want to shop, and we want to be in the position to allow them to do that. I think the results of this quarter really demonstrate that. You know, it's a little bit more information than you're asking for with regards to Amazon, but, you know, with Amazon, what I'd say is, it is slowing a bit for us, slowing for a lot of other consumer brands that we speak with that have reported recently. The DTC platform is also slowing. We think we still have a tremendous amount of opportunity, though, in both of those platforms.

We're going to spend appropriately and, you know, market to those in a cost-effective way, just as we do across all the channels, and ultimately let the shoppers go where they want to go.

Speaker 3

Thank you for all the detail. That makes sense, focusing on the wholesale channel. Kind of talking about focusing on the wholesale channel, a lot of your increased spending was in marketing and advertising while trade promotion was flat year over year. Do you have any plans to increase trade promotion? Because gross margin was in the upper range of guidance, or are you not doing a ton of trade promotion as a wait-and-see thing on input costs related to tariffs?

Speaker 0

Yeah. Hi, Nicholas. This is Anya. Thanks for the question. Yeah, I think it's a good one. It's certainly something that we are discussing, and we are looking into the second half, and given the overall macroeconomic climate, I think consumers are certainly being somewhat price sensitive. As you perhaps noticed, we have not taken pricing so far. We have not increased our price given the commodity inflation that we experienced in our key raw materials, as well as tariffs impact that, you know, we already experienced to some degree in the rolling out, you know, even at the higher rates, in the back half. We reaffirmed our gross margin targets for full year, and we are discussing what other supply chain efficiencies we can implement in order to offset those inflationary costs without increasing pricing.

Promotional strategy is definitely something where we can lean into if we see the need in the back half.

Speaker 2

Yeah. Nicholas, I love that question. How to design, you said, is something we've been kicking around. We do have the luxury of a strong gross margin and have the ability to invest into our categories and into our channels and retail customers, all customers, in fact, right now, when consumers are, as Anya Hamill pointed out, becoming more price sensitive. We feel like we're in a really strong position, given the gross margin structure that we have, and we'll utilize that as necessary to drive growth when we feel that we can win and take share from competitors.

Speaker 3

Okay. That all makes sense to me, and I appreciate the thought both of you gave into answering my question. That's my last question, and I'll return back to the queue.

Speaker 2

That's great. Thanks, Nicholas.

Speaker 5

Our next question comes from Eric Des Lauriers with Craig-Hallum Capital Group. Eric, your line is now open.

Speaker 1

This is Adam on for Eric. Thank you for taking our questions. I only have one question here. Can you expand on some of the distribution gains in grocery and club? How broad-based are these gains, and should we think of one channel driving more growth than the other? Any color in terms of geographic regions would be very helpful. Thank you.

Speaker 2

Yeah. Hey, Adam. Welcome. Okay. What, yeah. So, hey, I, a couple of things. Those are great questions. In this, I'll talk quarter and then I'll talk the half a little bit too because, just to remind everyone about our business. Our business, our orders are a little bit chunky. What I mean by that is we have three large customers, a few of which are distributing to a series of retailers. As I mentioned a little while ago, UNFI and KE are two of our largest customers, and then we have our club business as well. Those three customers get direct shipped or picked up, depending on their business model. Either we're shipping to them or they're driving trucks to pick up. The way that our business works, because we don't have direct shipments to retailers given the size of our business right now, not very many.

At least, we do have a couple smaller ones. Because we go through distributors and then, of course, the club business, the orders and when they come in end up driving quarters that look very different than years. You get a large order on June 28th, for shipment on June 28th, and it really changes the dynamics of that quarter, obviously, relative to if they come in a couple of days later in the third quarter in July. That's a little bit of what has happened in Q2. That's why I'll talk to the second quarter and then the first half. In the second quarter, we did have a significant uptick in our club business. We had what I would say was a sequential slowdown in our retail business.

That's not because of scanner data, as much as it is because the distributor had placed significant orders in Q1 just before Q2 started. They were flush, full of inventory as they started Q2, whereas it was the opposite with our club business. We really have to look at these things on a broader basis than just a quarter to understand the dynamic given the size of these orders relative to the size of our business. All that aside, I would tell you, yes, our club business has had very strong expansion. We have picked up additional regions of our creamer products. I think you guys heard from us in the past that we had, I would say, most of California, some of the Pacific Northwest, and then, regionally, the San Diego region kind of carried all the way over to Colorado.

That was really our footprint on the creamer business. We tested coffee a while back. I had mentioned it had done really well. In Q2, we did receive a rotation on the coffee business that has also performed very well. That is across an entire region, within the Los Angeles region. As we go to Q3 and Q4, we've expanded distribution already this year. That will continue to bear fruit. I forgot to mention that the creamer business also saw an expansion into the Southeast region for club. We're starting to pick up a footprint that is kind of West Coast all the way into Colorado and then the Southeast. We're performing very well in all those regions. In the coffee business, I mentioned that we had picked up that rotation in Los Angeles.

It's very likely that we should see additional rotations picked up by other regions of coffee as well. That's all still in the works. Nothing confirmed, but I'd say looking very strong that we could see a growth in the club business as we go into the back half of this year. In the mule oil and natural world, mule oil, we've continued to see steady gains. We haven't seen the monstrous full because we're not into mass in a major way at this point. We've done some work with Target. We have a couple of items in those stores. We have items in Team Super, Safeway, Albertsons, HEB, Wegmans, FreshMart, and Equalis sign that we're scanning into that we've talked about in the past. We continue to see expansion into those stores as well.

We pick up items as we continue to perform with the items that we have in there already. That's been the case over the course of this year. In the natural channel, Sprouts has just been an unbelievable customer for us for quite some time. We've talked about that. I know we've talked about that quite a lot. We have significant expansion again, some of which has taken place here over the last couple of months, and some of which has been confirmed, but really doesn't hit until the back half of this year. It's pretty broad-based, I would tell you, across mule, natural, and club. We believe as we go forward, as I mentioned, this is the strategy for us. We intend to continue to grow distribution in the bricks-and-mortar space across all of these channels.

We have a great sales team that's engaged, a broker that's very supportive, helping us make these calls, and we're just seeing a lot of success across the board right now.

Speaker 1

Great. Thank you so much. That was very helpful. Thank you.

Speaker 2

You bet.

Speaker 5

At this time, more questions were in queue. Again, if you would like to ask a question, it is star followed by one on your telephone keypad. Again, that is star followed by one. There are no more questions registered in queue. I'd like to pass the conference over to our hosting team for closing remarks.

Speaker 2

Thank you. I think really, I'd just like to say thank you to everyone for joining our quarterly earnings call today. We look forward to talking to you again in three months. There's been a lot of progress made again, and we're really excited to be able to come in and reaffirm our guidance that we've given. I feel like we have a lot of opportunity as we go forward from here, some of the innovation that we mentioned, the expansion that we talked about, and we'll be excited to talk to you in about three months from now. Have a great day. Thank you all very much.

Speaker 5

That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.