- Else Nutrition (TSX:BABY) has expanded its store count with another major U.S. retailer, which stands as one of the largest supermarket operators in North America with more than 420 stores
- Else has significantly reduced costs while growing its store count by more than 10x since September 2022
- Despite this trajectory, shares have given back more than 65 per cent year-over-year, and more than 90 per cent from their all-time high in 2020
- Else Nutrition is developing plant-based food and nutrition products for infants, toddlers, children and adults
Else Nutrition (TSX:BABY) has expanded its store count with another major U.S. retailer, which stands as one of the largest supermarket operators in North America with more than 420 stores.
The San Antonio-based supermarket retailer brought in US$43 billion in sales last year, with Forbes recently ranking it as the fifth-largest private company and second-largest supermarket operator in the United States.
The retailer will have Else’s kids and toddler product lines on its shelves by the end of Q2 2024, exposing the company to millions of new potential customers.
Else didn’t mention its new client by name in Wednesday’s news release, but did include the photo displayed above.
“We are proud to have been selected to collaborate with a retailer of such prominence, which we believe is further validation of the quality of our products and the market demand for a tasty and nutritious plant-based alternative to dairy-based products,” Hamutal Yitzhak, Else Nutrition’s co-founder and chief executive officer, said in a statement. “We look forward to mirroring our success with other retailers and providing their customers with access to our wholesome, clean-label products.”
The mismatch between Else Nutrition’s growth and its stock price
According to Else Nutrition’s latest investor presentation, the company grew its store count by more than 10x from 1,200 in September 2022 to approximately 13,000 as of September 2023. This trend has only continued, with Else striking deals with a multitude of leading brands, including:
Else has backed up its explosive growth with a track record of increasing gross profitability and considerable reductions in manufacturing costs, demonstrating management’s ability to rapidly scale towards shareholder value creation. The company managed to post net income of C$1.04 million in Q3 2023 after recording yearly losses from 2018 to 2022.
With Else identifying a more than US$130 billion addressable market for its products, and two-thirds of it still to be unlocked by its infant formula in development, potential investors might expect Else’s stock to have somehow reflected the promise the company has been able to drum up. But this has been far from the case.
Shares have given back more than 65 per cent year-over-year, and more than 90 per cent from their all-time high in 2020, granting allocators an underpriced window to consider the stock for their portfolios. Judging by Else’s prodigious news flow, this window might prove to be short-lived.
Else Nutrition is developing plant-based food and nutrition products for infants, toddlers, children and adults. The company specializes in soy and dairy alternatives.
Else Nutrition stock (TSX:BABY) is unchanged, trading at C$0.29 per share as of 10:55 am ET.
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