TSXV:SBBC - Post Discussion
Post by
geralds on Jul 24, 2023 5:14pm
Very nice....
Simply Better Brands Corp. (SBBC)
Clarus Securities Inc. Raising Estimates and Target Price on TRUBAR Sales Strength.
| Source: Research @Clarus Securities Inc. |
| TRUBAR sales in Q2/23 were double our estimate. SBBC recently preannounced H1/23 TRUBAR revenues in the range of US$19.2MM, which equated to approximately US$9.0MM of TRUBAR revenues for Q2/23. The Q2 result was double our US$4.5MM forecast. We note that TRUBAR only generated US$10MM of sales in all of 2022, so the business line continues to ramp hard. Q2 results were likely from ongoing wholesale shipments into Costco following the very successful seasonal U.S. nationwide listing in April. TRUBAR gross margin was 32% in H1/23. We had expected gross margin to slip below 30% in Q2e because of a high percentage of sales going into Costco. Adds Acosta as sales agency to accelerate TRUBAR listings in major U.S. grocery and natural food retailers. SBBC’s in-house sales team captured Costco and recently won two major c-store chains in California and the U.S. Southeast (400 stores, launching Q3/23e), but Acosta offers deep relationships into major grocers including Publix, Kroger, Whole Foods, Sprouts and Albertsons/Safeway. New launches into major chains take time, so we would expect the first revenue contribution from any Acosta wins to start in late 2023e or 2024e. Raising 2023e and 2024e revenue estimates on TRUBAR momentum. SBBC’s initial 2023 guidance called for over US$80MM of revenue. However, TRUBAR’s momentum continues to impress, and we are raising our overall revenue estimates for 2023e and 2024e. We now project total SBBC revenues of US$90.4MM (was US$82.2MM) for 2023e and breaking through US$100MM in 2024e. We believe our 2024e revenue forecast remains highly conservative for both TRUBAR and No B.S. Skin Care. Raising target price to C$1.25 per share, reiterate Speculative Buy rating. Our target price is generated from a sum of the parts analysis using EV/2024e revenue, and the target price increase is driven by our increased 2024e revenue forecast. SBBC management continue to execute strongly on their growth plan for TRUBAR, and we expect No B.S. Skin Care to start to ramp revenues in 2024e as well. For the Clarus Securities Inc. Article , Click Below Save the Date: SBBC Q2 2023 Earnings Conference Call, Aug 30, 10:00AM EST. | | Be Well! Kathy Casey CEO Simply Better Brands Corporation |
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