GURU Organic Energy, a Canadian manufacturer listed on the TSX under the symbol GURU, has reported a significant increase of more than 33% in consumer purchases during the fourth quarter of 2022.
The boost in scanned retail sales can be attributed to the success of the company’s national advertising campaigns, “Good Energy for the Everyday” and “Back to Reality,” which led to a 31% increase compared to the same period last year. In the US market, GURU maintained its position as the number one energy drink in California’s natural store sector and is working on expanding its distribution network in the state.
Despite experiencing a change in business model and making investments in expansion activities, GURU faced expected impacts on its short-term financial performance. The company reported a net revenue of $6.8 million for the fourth quarter, down from $8.5 million in the same quarter last year. However, gross margin improved to 52.1% for the quarter, compared to 51% in the previous year, thanks to pricing initiatives that offset higher product costs due to inflationary pressures.
Selling, general, and administrative expenses for the quarter totaled $7.8 million, with $5.5 million allocated to sales and marketing efforts, including ongoing advertising campaigns like the partnership with Quebec reality TV show “Occupation Double.” Adjusted EBITDA for the quarter was a loss of $4 million, compared to $5.7 million in the previous year.
GURU’s CEO, Carl Goyette, expressed satisfaction with the company’s performance. He acknowledged the impact of the business model changes on the financial results in the short-term but believes they will yield positive results in the long run. Goyette highlighted the brand’s growth trajectory in Canada, emphasizing targeted marketing and disciplined execution at the retail level to drive net sales growth in fiscal 2023.
With a strong balance sheet and strategic partnerships, GURU is well-positioned to pursue its growth strategy and establish itself as the leading better-for-you energy drink in Canada while increasing brand awareness in the US market.
