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LS

Laird Superfood, Inc. (LSF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered 26% YoY revenue growth to $11.6M with Gross Margin of 38.6% (down ~440 bps sequentially vs Q3’s 43.0% on higher slotting and prior-period promotional accruals), and GAAP diluted EPS of -$0.04; Adjusted EBITDA was $0.15M, marking a third straight breakeven-to-positive quarter .
  • Channel mix remained balanced: e-commerce 58% (+12% YoY) and wholesale 42% (+52% YoY); management cited strong Amazon momentum and accelerating grocery distribution/velocity as key drivers .
  • 2025 outlook reaffirmed: net sales +20–25%, Gross Margin “upper 30s,” Adj. EBITDA ~breakeven, and ($1–$2M) operating cash outflow to build inventory; management flagged Q1 2025 growth below full-year cadence due to stock-outs, with recovery by end of Q1/early Q2 and acceleration in 2H .
  • Supply constraints limited Q4 by an estimated >$1M of forgone sales; LSF added qualified suppliers (esp. coconut milk powder) and is prioritizing subscribers and key accounts—context for near-term revenue and working capital adds .

What Went Well and What Went Wrong

  • What Went Well

    • Strong top-line and balanced channels: Q4 net sales +26% YoY to $11.6M; wholesale +52% YoY; e-commerce +12% YoY; Amazon delivered its strongest quarter ever on better inventory, media efficiency, and demand .
    • Structural margin elevation maintained: FY24 GM reached 40.9% (+1,070 bps YoY) from co-manufacturing shift, direct ingredient sourcing, reduced trade spend; Q4 GM 38.6% despite commodity pressure and higher slotting .
    • Cash discipline and profitability trajectory: third consecutive quarter of positive total cash flow (Q4 +$0.31M) and FY cash up +$0.8M to $8.5M with no debt; Adj. EBITDA positive in Q4 .

  • What Went Wrong

    • Stock-outs constrained revenue: management estimates >$1M of lost Q4 sales (creamer/instant latte SKUs); Q1 2025 growth will be below FY pace as supply recovers by end of Q1/early Q2 .
    • Sequential margin pressure: GM fell ~440 bps vs Q3 (43.0%→38.6%) on higher prior-period promotional spend and slotting tied to distribution expansion .
    • Operating expense uptick: Q4 net loss of $0.4M vs prior-year income of $0.1M, driven by personnel costs and higher stock-based comp; Adj. EBITDA dipped vs Q4’23 .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$10.00 $11.78 $11.61
Gross Margin %41.8% 43.0% 38.6%
Diluted EPS ($)-$0.02 -$0.02 -$0.04
Adjusted EBITDA ($USD Millions)-$0.10 -$0.01 $0.15
  • YoY revenue growth rates by quarter: Q2 +30% , Q3 +28% , Q4 +26% .
  • Q4 channel mix and growth:
    • E-commerce: 58% of net sales; +12% YoY .
    • Wholesale: 42% of net sales; +52% YoY .

Channel Mix and Growth

MetricQ2 2024Q3 2024Q4 2024
E-commerce % of Net Sales61% 58% 58%
Wholesale % of Net Sales39% 42% 42%
E-commerce YoY Growth+47% +42% +12%
Wholesale YoY Growth+9% +13% +52%

Q4 Product Revenue Disaggregation

CategoryQ4 2023 ($)Q4 2024 ($)
Coffee creamers$4,831,008 $6,521,777
Coffee, tea, and hot chocolate$1,924,368 $3,196,314
Hydration and beverage enhancing$1,533,728 $2,318,791
Harvest snacks and other food$2,084,375 $1,550,974
Other$148,422 $73,179
Net Sales$9,207,388 $11,606,199

Additional KPIs (selected)

  • Cash and equivalents: Q2 $7.83M , Q3 $8.20M , Q4 $8.51M .
  • Positive total cash flow: Q2 +$0.5M , Q3 +$0.4M , Q4 +$0.31M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales GrowthFY 2025+20% to +25% (Q3’24 outlook) Reaffirmed +20% to +25% Maintained
Gross MarginFY 2025Not previously specified for 2025 in Q3 PR “Upper 30s%” New metric disclosed
Adjusted EBITDAFY 2025“Slightly positive EBITDA” ~Breakeven Moderated
Operating Cash FlowFY 2025“Slightly positive Cash Flow” ($1)–($2)M to build inventory Lowered (investment)
Q1 Sales CadenceQ1 2025N/ABelow FY run-rate on stock-outs; recovery by end of Q1/early Q2; acceleration in 2H New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
E-commerce/AmazonAmazon +80% YoY; best-ever Prime Day; DTC +32%; e-comm +47% Amazon +133% YoY; e-comm +42%; DTC +10%; strong subscription and repeat E-comm +12% YoY; 58% of sales; Amazon strongest quarter ever Still strong; growth normalizing
Wholesale expansionRetail scanner +30%; velocity and distribution gains Natural +27% and MULO +40% in 12 weeks; added Kroger/Albertsons/Safeway; early conventional Wholesale +52% YoY; distribution expansion and velocity led by club Acceleration
Gross margin/Trade spendThird straight 40%+ GM; direct sourcing + trade efficiency GM 43.0%; 4th consecutive 40%+; supplier settlement helped GM 38.6% (down on slotting/prior-period promo); FY24 GM 40.9% Structurally high, near-term pressure
Supply chain/Stock-outsSupply chain stable; margin management; co-manufacturing Managing issues “whac-a-mole”; expected in-stock for holidays Out-of-stocks cost >$1M sales; adding suppliers; recovery by end Q1/early Q2 Improving post-Q1
Commodities & pricingMonitoring inflation; margin program to offset Structural GM at/above 40% target; inflation monitored Coffee/cacao/coconut inflation; selective price actions; willing to trade % for $ Manageable; selective pricing
Product innovationFunctional coffees/lattes; strong category growth Liquid creamer upsizing; coffee/instant latte momentum Liquid creamer 750ml transition largely complete; functional coffee traction Scaling

Management Commentary

  • Strategic focus on omnichannel growth: “Two key pillars…rapid growth in e-commerce, particularly on Amazon and significant strides in expanding our wholesale distribution.”
  • Margin philosophy amid inflation: “We may choose to temporarily trade away gross margin points for gross margin dollars…when costs normalize…we can have a bigger business with a strong gross margin profile.”
  • Stock-outs and demand signal: “We estimate that we would have captured more than $1 million of additional net sales during Q4 [without stock-outs].”
  • 2025 cadence and guidance: “Reaffirming…net sales to grow in 20% to 25% range…gross margins…upper 30s…Adj. EBITDA breakeven; expect $1–$2M negative operating cash flow to invest into inventory.”

Q&A Highlights

  • Stock-outs/Inventory: Q4 lost sales ~$1M; prioritizing subscribers and key accounts; added qualified coconut milk powder suppliers; recovery expected by end of Q1/early Q2 .
  • Gross margin tolerance: Willing to “trade a couple of points” vs 40%+ to drive market share; FY25 modeled in “high 30s” amid commodity inflation .
  • Liquid creamer upsizing: Transition executed with minimal waste and no meaningful distribution loss; watch velocities; potential upside not yet embedded .
  • Pricing & category: Took ~$1 price increase in coffee; focus on gross margin dollars; functional coffees/lattes seeing strong consumer traction .
  • Liquidity/ABL: ~$8.5M cash, no debt; asset-backed line available; continue disciplined working capital; aim not to shrink cash balances over 2025 .

Estimates Context

  • S&P Global consensus (revenue/EPS) for Q4 2024 was unavailable at the time of analysis due to data access limits; as a result, we cannot formally classify a beat/miss vs consensus. We will update with S&P Global consensus on request.

Key Takeaways for Investors

  • Top-line momentum intact with diversified growth drivers (Amazon and grocery) and category tailwinds (functional coffees/creamers, instant lattes) .
  • Structural margin reset sustained (FY GM 40.9%); near-term pressure (slotting, prior-period promos, commodity costs) should abate as supply normalizes and pricing/efficiencies flow through .
  • Temporary stock-outs drive Q1 air pocket; management expects inventory rebuild by end of Q1/early Q2 and 2H acceleration—watch order fill rates and channel in-stock metrics .
  • FY25 outlook credible but more conservative on cash: growth +20–25%, GM high-30s, Adj. EBITDA ~breakeven, ($1–$2M) op cash to fund inventory; trajectory implies reinvestment to capture demand and minimize out-of-stocks .
  • Execution catalysts: continued retail distribution gains (Kroger/Safeway et al.), Amazon share gains (plant-based creamer leadership), and successful liquid creamer upsizing and innovation launches .
  • Watch commodities (coffee/cacao/coconut) and trade spend; management is using selective pricing and is prioritizing gross profit dollars over rate to support scale effects .
  • Balance sheet provides flexibility (cash $8.5M, no debt, ABL available); continued positive quarterly cash adds point to improved cash conversion even as inventory rises .