Edible Garden AG Incorporated (EDBL) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong year-over-year sales growth in multiple categories, especially in condiments and international sales. The Q&A session reveals positive reception for the new RTD platform and strategic focus on higher-margin products. Despite increased operating expenses and a net loss, the optimistic guidance, significant retailer commitments, and strategic expansion efforts suggest a positive outlook. The absence of specific guidance details is a minor concern, but the overall sentiment is positive, expecting a stock price increase of 2% to 8% over the next two weeks.
Key Financial Performance
Revenue Revenue increased approximately 22.9% year-over-year to approximately $3.3 million, supported by continued retail expansion and growth across multiple categories.
Cut Herbs Business Sales Sales increased approximately 46% year-over-year, driven by continued growth within existing accounts as well as new account contributions from Kroger and Weis Markets.
Vitamin and Supplement Sales Sales increased approximately 27% year-over-year, reflecting growth in demand for clean-label, better-for-you products.
Condiment Sales Sales increased approximately 51% year-over-year, reflecting expanding demand for branded product portfolio.
International Sales Sales increased approximately 50% year-over-year, reflecting continued expansion of distribution footprint and growing demand for clean-label, better-for-you products across multiple markets and categories.
Operating Expenses Operating expenses were $10 million for the 3 months ended March 31, 2026, compared to $5.6 million for the 3 months ended March 31, 2025. The increase of $4.4 million was primarily driven by increased cost of goods sold due to scaling cut herb distribution through third-party sourcing and increased depreciation and amortization of $2.5 million due to accelerated depreciation of certain fixed assets.
Income Tax Benefit The company recorded an income tax benefit of approximately $3.4 million for the 3 months ended March 31, primarily related to a valuation allowance release in connection with the sale of certain tax benefits under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program. This benefit is a discrete nonrecurring item.
Net Loss Net loss for the quarter was approximately $3.7 million, compared to approximately $3.3 million in the prior year period.
Cash Cash increased to approximately $2 million at the end of March 31 from $1.1 million at year-end, driven by positive operating cash flow of approximately $251,000, favorable working capital, including collections on receivables and inventory reductions, as well as net financing inflows.
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Operating Highlights
Cut Herbs Business: Sales increased approximately 46% year-over-year, driven by growth within existing accounts and new contributions from Kroger and Weis Markets.
Vitamin and Supplement Sales: Increased approximately 27% year-over-year.
Condiment Sales: Increased approximately 51% year-over-year.
RTD (Ready-to-Drink) Initiative: Advancing the Iowa Midwest RTD initiative with Tetra Pak processing and packaging solutions, targeting the growing global RTD market projected to reach $1.26 trillion by 2033.
Retail Expansion: Expanded distribution network to over 6,000 locations across the U.S., Caribbean, and South America, adding new retail partners such as Target, Safeway, Busch's Fresh Food Market, and The Fresh Market.
International Sales: Increased approximately 50% year-over-year, reflecting growing demand for clean-label, better-for-you products.
Operational Execution: Focused on improving operational execution, scaling higher-margin categories, and strengthening margins over time.
Cost Management: Managing working capital deficit and improving capital position through favorable working capital adjustments and net financing inflows.
Strategic Shift to RTD Manufacturing: Pivoting to RTD clean nutrition manufacturing at the Prairie Hills facility, supported by Tetra Pak solutions.
Farm-to-Formula Strategy: Leveraging controlled environment agriculture expertise to expand into shelf-stable and functional nutrition categories.
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Risk or Challenges
Cost of Goods Sold Increase: The cost of goods sold increased due to scaling cut herb distribution through third-party sourcing. This is viewed as a transitional challenge as the company works to renegotiate supplier terms.
Depreciation and Amortization Costs: Depreciation and amortization costs increased by approximately $2.5 million due to accelerated depreciation of certain fixed assets related to the company's pivot to RTD, clean nutrition manufacturing.
Net Loss: The company reported a net loss of approximately $3.7 million for the quarter, an increase from the prior year's $3.3 million loss, indicating ongoing financial challenges.
Operational Expenses: Operating expenses increased significantly to $10 million from $5.6 million in the prior year, driven by higher costs associated with scaling operations and transitioning to new business initiatives.
Supply Chain Management: The company faces challenges in supply chain management, particularly in transitioning cut herb sourcing to reduce costs and improve margins.
Capital Position: The company is managing a working capital deficit and is focused on improving its capital position, which remains a challenge as it executes its growth strategy.
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Guidance & Outlook
RTD (Ready-to-Drink) Market Opportunity: The global RTD market is projected to grow from approximately $842.5 billion in 2025 to roughly $1.26 trillion in 2033, presenting a significant long-term opportunity for the company.
RTD Manufacturing Initiative: The company is advancing its Iowa Midwest RTD initiative, including the integration of Tetra Pak processing and packaging solutions, to support scalable domestic production of clean-label, shelf-stable functional nutrition products.
Retail Network Expansion: The retail footprint now exceeds 6,000 locations across the United States, Caribbean, and South America, providing a foundation for future RTD product placement and revenue growth.
Strategic Focus Areas for 2026: Priorities include scaling revenue through the expanding retail network, improving cost structure by transitioning cut herb sourcing, scaling higher-margin branded categories, advancing the RTD manufacturing platform, and maintaining disciplined capital management.
Operational and Margin Improvements: The company aims to improve operational execution, scale higher-margin categories, strengthen margins over time, and position itself for long-term scalable growth and value creation.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How many of the 6,000 retail locations carry cup herb products and vitamin supplements?
A:The mix includes cut herbs (40-50% of the business), vitamin supplements (20%), and other products like potted herbs, wheatgrass, and hydroponic basil. Cut herbs are the preferred form due to convenience and are expected to drive top-line growth. Vitamin supplements are anticipated to become a larger part of the business in the next 6-12 months.
Q:What is the reception from retail partners regarding the new ready-to-drink (RTD) platform?
A:The reception has been overwhelming, with significant commitments from retailers. The RTD platform includes a performance high-protein drink and an adult nutrition drink, with production starting in September through a co-manufacturer. The company is building a factory in Iowa for future production. The RTD business is seen as a major growth opportunity.
Q:How does the company plan to build customer loyalty across product categories?
A:The company focuses on quality, consistency, marketing, and customer service. Initiatives include advertising, in-store promotions, social media, and maintaining a 98% shipping rate. They emphasize their reputation for high-quality, fresh, and sustainable products, which drives loyalty among consumers and retailers.
Q:How is the company balancing investment between its core produce business and the RTD opportunity?
A:The company is shifting resources towards the RTD and nutrition platform, which is seen as the future and a larger opportunity. Investments in the core produce business, such as adding greenhouses and improving operations, continue, but the focus is on higher-margin, shelf-stable products like RTDs.
Q:What initiatives are underway to improve operational efficiencies and margins in the core produce business?
A:Initiatives include redeploying existing resources, negotiating better supplier terms, focusing on profitable accounts, reducing labor costs through automation, and refining operations. The company aims to shift towards higher-margin products while maintaining growth in the core produce business.
Q:What is driving the 50% year-over-year growth in international sales?
A:The growth is primarily driven by PriceSmart, a major player in the Caribbean and South America. The company has a decade-long relationship with PriceSmart, which is expanding its store footprint and product offerings, including Edible Garden's sports nutrition line.
Q:What is the opportunity for increasing distribution within existing retail relationships?
A:The company plans to deepen relationships with existing retailers by selling more products across its portfolio. They aim to rationalize their retailer portfolio, focus on higher-margin products, and leverage their reputation for quality and reliability to expand distribution within their current 6,000-store network.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numbers for how many stores carry cup herb products versus vitamin supplements. Additionally, while they emphasized overwhelming demand for the RTD platform, they did not provide detailed data or timelines for scaling production or specific retailer commitments.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America partner
Ayva Investor
Busch Fresh
Chairman progress
Communications negative
Edible Garden
Food Market
Fresh Food
GLP support
Garden Conference
Garden Inc
Garden Interim
Hannaford Busch
Inc Update
Iowa Midwest
JEALOUSY GLP
Kroger momentum
Market Hannaford
Officer Edible
account
capability
core
expertise
footprint
foundation RTD
initiative
label
market distribution
network
nutrition category
packaging solution
partner Safeway
place
processing packaging
product portfolio
shelf nutrition
EDBL Transcript
Edible Garden AG Incorporated (EDBL) Q1 2026 Earnings Call Transcript
Positive5-15
The earnings call highlights strong year-over-year sales growth in multiple categories, especially in condiments and international sales. The Q&A session reveals positive reception for the new RTD platform and strategic focus on higher-margin products. Despite increased operating expenses and a net loss, the optimistic guidance, significant retailer commitments, and strategic expansion efforts suggest a positive outlook. The absence of specific guidance details is a minor concern, but the overall sentiment is positive, expecting a stock price increase of 2% to 8% over the next two weeks.
Edible Garden AG Incorporated (EDBL) Q4 2025 Earnings Call Transcript
Unknown3-31
The earnings call reveals several concerns: high dependency on retail relationships, elevated costs for expansion, and declining financial metrics, including a gross profit loss and increased SG&A expenses. While there are positive elements such as the USDA Organic herb program and potential growth in CPG products, the lack of specific guidance on CapEx and the need for margin recovery by 2026 raise uncertainties. The Q&A section highlighted management's reluctance to provide detailed financial clarity, further contributing to a negative sentiment.
Edible Garden AG Incorporated (EDBL) Q3 2025 Earnings Call Transcript
Unknown11-14
Despite revenue growth and strategic expansion plans, the company faces significant challenges: declining gross profit, increased operating expenses, and a widening net loss. The cash position has deteriorated, raising liquidity concerns. While there are positive strategic initiatives, such as the NaturalShrimp facility and retailer partnerships, the lack of detailed guidance and the negative financial metrics overshadow these efforts. The Q&A session highlighted management's vague responses, further contributing to uncertainty. Given these factors, the stock price is likely to experience a negative reaction in the short term.
Edible Garden AG Incorporated (EDBL) Q2 2025 Earnings Call Transcript
Unknown8-14
The earnings call presents a mixed picture: while there are strategic realignments and positive developments like the NaturalShrimp acquisition and high-margin product focus, financials reflect declining revenue and increased losses. The Q&A reveals growth in private labels and optimism about new product lines, but management's vague responses on specifics raise concerns. The company's dependency on new revenue streams and margin pressures add uncertainty. Considering these factors, the stock price is likely to remain stable, hence a neutral sentiment.
EDBL Report
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
