No need to sugarcoat: Candy Club report sweet revenue increase

Let’s face it. Candy and chocolate taste way WAY better than carrot sticks with hummus.

And even if you swear by your rabbit food, the size of the global confectionery market speaks for itself. Estimated to be valued at USD $210.3 billion in 2019 and rising by a compound annual growth rate of 3.6%, the market for sugary yums will exceed USD $270 billion by 2027.

That’s a lot of M&Ms…

American based Candy Club (ASX: CLB) has today released their quarterly results, reporting a total gross revenue of USD $3.05 million in June quarter, an increase of 29% on the preceding year.

The growth was largely driven by their B2B segment which was responsible for generating USD $2.37 million in gross revenue during the quarter, a 56% increase for the division (YoY).

Due to the challenging operating environment most businesses are experiencing throughout the COVID-19 pandemic and lack of candy gifting festivities, the division fell 29%. The seasonal decline was expected considering the earlier March quarter had both Valentine’s Day and Easter to benefit from.

The Company reported an EBITDA of USD -$0.49 million, well above their estimate of USD -$1.46 million whilst continuing to meet KPI expectations.

Reorder rates of 96% from the top 25 customers has given the Company hope that B2B will pick up again following the reopening and recovery of the US economy.

With USD $6.8 million in cash and an additional USD $5 million expected to be received following shareholder approval on director allocations from their April capital raise.

Moving forward, the Company is keen to expand business development relationships with third party B2B platforms in the US and test sales performance of their products in major retail and grocery chains. In addition to continuous product development, Candy Club is expanding their on demand local delivery service that gets products delivered in 30 minutes or less. This service is currently offered in seven markets, with a view of expanding to thirty via a partnership with CloudKitchen.

On the marketing front, advertising spend in major magazine publications will increase as well as the development of collectible packaging to target new distribution channels and partnerships, including overseas.

Disappointingly, you can’t cash in stock for store credit however.