The market leaders in hemp-extract cannabidiol (CBD) products, Charlotte’s Web Hemp (CNQ: CWEB, recently held an earnings call to discuss the financial results of its Q1 2020. The company showed encouraging results, starting with an organic consolidated revenue of $21.5 million, which is similar to the figure reported the same period one year ago. Another aspect the company highlighted is that its e-commerce business has been getting stronger and contributing more to the company’s revenue.
This past quarter, the DTC e-commerce business grew 29% compared to the same period last year. During this quarter, the DTC portion of the sales accounted for 66% of the total business revenue, while regular B2B businesses counted for the other 34%. The consolidated gross margin was 70% and is increasing because a larger portion of the products is being moved through the online sales platform.
Adrienne D. Elsner, President, CEO & Director, mentioned five key headlines that have marked Charlotte’s Web progress during the first quarter. The first key change is the focus on accelerating the growth of its online business. Second, the company has been addressing a few weaknesses found in B2B channels by adding new products, reducing some prices, which was done back in March-April. Another key focus the cannabis venture had during the first quarter was the line of the products introduced during the third quarter of 2019, which counted for nearly 25% of the company’s sales.
Elsner also added that the addition of a new Chief Operating Officer, David Panter, has helped the company’s new production facility to take off. The recent acquisition of Abacus is also providing support. Finally, the company has, by launching the CW Labs, been able to enhance its products by offering better scientific backing. Besides these five key aspects, the trends and customers’ feedback helped Charlotte’s Web to maintain its guidance for 2020.