Better Choice Company Inc.: A Comprehensive Analysis of the 2023 10-K Filing

Introduction

Better Choice Company Inc. (hereafter referred to as 'Better Choice' or 'the Company') is a pet health and wellness company dedicated to improving the lives of pets and their owners. With a focus on premium and super-premium products, Better Choice has positioned itself in a growing market that values the health and happiness of pets. This blog post provides a detailed review of Better Choice's 2023 10-K filing, highlighting key financial data, business strategies, and potential investment opportunities.

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Business Overview

Better Choice operates in the pet health and wellness industry, offering a range of products including foods, treats, toppers, dental products, chews, and supplements under its Halo brand. The Company's mission is to lead the industry shift toward pet products and services that help dogs and cats live healthier, happier, and longer lives. Better Choice sells its products through various channels, including e-commerce, brick-and-mortar stores, direct-to-consumer (DTC), and international markets.

Financial Performance

Net Sales

In 2023, Better Choice reported net sales of $38.6 million, a decrease of 29% from $54.7 million in 2022. The decline in net sales is primarily attributed to supply chain constraints that impacted the availability of the Company's products. Despite the challenges, Better Choice continues to focus on new product innovation and expanding its market presence.

Gross Profit

The gross profit for 2023 was $11.8 million, representing a 23% decrease from $15.3 million in 2022. The gross profit margin increased to 31% in 2023 from 28% in 2022, indicating a more efficient cost management despite the decrease in sales.

Operating Expenses and Net Loss

Operating expenses in 2023 totaled $33.0 million, a 39% decrease from $54.0 million in 2022. The net loss for 2023 was $22.8 million, improving from a net loss of $39.3 million in 2022. The reduction in operating expenses and net loss reflects the Company's efforts to streamline operations and manage costs.

Investment Considerations

Strengths

• Strong brand presence in the premium pet health and wellness market.
• Diverse product portfolio catering to the needs of pets and pet owners.
• Strategic focus on innovation and market expansion.

Risks

• Supply chain constraints that may impact product availability and sales.
• Intense competition in the pet health and wellness industry.
• Dependence on key suppliers and co-manufacturers.

Opportunities

• Growing consumer demand for premium pet products.
• Expansion into new markets, particularly in Asia, where pet ownership is increasing.
• Leveraging e-commerce and DTC channels to reach a broader customer base.

Conclusion

Better Choice Company Inc. has demonstrated resilience in the face of supply chain challenges, managing to maintain a positive gross profit margin and reduce its net loss. While there are risks associated with the pet health and wellness industry, the Company's strong brand, diverse product portfolio, and strategic focus on innovation and market expansion present potential investment opportunities. Investors should consider these factors along with their own investment criteria before making a decision.

The analysis provided in this blog post is based on Better Choice Company Inc.'s 2023 10-K filing and is intended for informational purposes only. It should not be considered as investment advice.