Laird Superfood Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 6, 2025

Key Takeaways

  • Positive Sentiment: Net sales grew 20% year-over-year to $12 M in Q2, driven by a 47% surge in wholesale and 2% e-commerce growth.
  • Positive Sentiment: Gross margin held at 39.9% and the company delivered positive adjusted EBITDA of ~$150 K, a meaningful improvement from a slight loss last year.
  • Positive Sentiment: Balance sheet remains solid with $4.2 M cash, no debt, and a strategic inventory build to support demand and mitigate tariff costs, expected to normalize in coming quarters.
  • Negative Sentiment: Net loss widened to $400 K from $200 K a year ago as operating expenses increased by $700 K due to higher marketing spend and stock-based compensation.
  • Neutral Sentiment: Full-year guidance is reaffirmed at 20–25% net sales growth, ~40% gross margin and break-even adjusted EBITDA, with tariff uncertainty remaining a wildcard in the back half.
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Earnings Conference Call
Laird Superfood Q2 2025
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good afternoon. Thank you for attending today's Ledge Superfood Inc. Second Quarter twenty twenty five Financial Results. My name is Jayla, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call I would now like to turn the conference over to our host, Trevor Russo.

Operator

Please proceed.

Speaker 1

Thank you, and good afternoon. Welcome to Laird Superfood's Second Quarter twenty twenty five Earnings Conference Call and Webcast. On today's call are Jason Beep, Superfoods' President and Chief Executive Officer and Omni Hamill, our Chief Financial Officer. By now, everyone should have access to the company's earnings release, which was filed today after market close. It is available on the Investor Relations section of Laird Superfood's website at www.lairdsuperfood.com.

Speaker 1

Before we begin, please note that during this call, management may make forward looking statements within the context of federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those described. Please refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. And with that, I'll turn the call over to Jason.

Speaker 2

Thank you, Trevor, and good afternoon, everyone. Welcome to Laird's Superfood's second quarter twenty twenty five earnings conference call. I'm Jason Veef, CEO of Blair's Superfood, and I'm joined today by our CFO, Anya Hamblin. Let me start by saying how proud I am of our team's performance this quarter. In a challenging environment with ongoing economic pressures, commodity inflation and shifting consumer preferences, we once again delivered impressive financial results that underscore the resilience and appeal of the Laird's Superfood brand.

Speaker 2

Net sales grew 20% year over year to $12,000,000 in Q2, marking another quarter of robust top line expansion. This growth was fueled by our strategic focus on wholesale, which surged 47% and now represents just under half of our total net sales, driven by distribution gains and velocity growth in grocery and club channels. Our e commerce channel also held steady with positive 2% growth in a very challenging digital market, contributing 52% of total sales, thanks to continued strength on Amazon. This quarter obviously marked an acceleration in our stated strategy to intentionally grow wholesale to become the largest percentage of our total business, and I am proud that we are succeeding in making that transition. Looking at our product categories, coffee creamers led the way with 44% growth, making up 56% of gross sales in q two as consumers increasingly seek out our plant based functional creamer options.

Speaker 2

Coffee, tea, and hot chocolate products grew 44% as well, driven by strong growth in our coffee products. This is in line with our intent to become a powerhouse in functional coffee solutions and speaks to consumers' interest in turning their morning ritual into a healthy and nutritious way to start their day. On the profitability front, we achieved a gross margin of 39.9%. While slightly down from last year due to higher trade spend, commodity costs and some small tariff impact, our margin level remains among the best in the industry. Operationally, we've demonstrated agility in managing our supply chain even amid tariff pressures, allowing us to deliver positive adjusted EBITDA of nearly $150,000 this quarter, a meaningful improvement from prior year's slight loss.

Speaker 2

This marks our continued progress towards sustainable profitability with year to date adjusted EBITDA at just over $500,000 Our balance sheet remains solid with $4,200,000 in cash and no debt, though we strategically invested in inventory this quarter to support demand and mitigate tariff costs and supply chain risks, leading to 4,100,000 in cash used from operations year to date. We expect to normalize this in the coming quarters as we convert our inventory into cash. These results position us as one of the fastest growing food companies in the public markets, outpacing many peers in the healthy nutrition space. For context, we've seen mixed performances across the industry this quarter, and these announcements reflect the sector that's navigating inflation and softer demand in certain channels, yet rewarding brands with innovation and execution, brands like ours. We expect tariffs to remain a wildcard for the back half of this year and beyond, but our team continues to make headway in our cost structure through key strategies such as direct sourcing of our materials and freight optimization.

Speaker 2

We are proud to not have taken any tariff related price increases while still delivering our gross margin targets, thereby delivering our highest quality health and wellness food products to consumers at the best value possible. We believe that this gives us a strategic advantage versus many of our competitors while also leaving open the opportunity to increase our price at a later date if the conditions necessitated. The economic environment may feel overall shaky right now, but we are building on tremendous momentum and are cautiously optimistic as we head into the second half. The consumer landscape is dynamic, but our focus on clean, plant based superfoods backed by Laird Hamilton's legacy and our commitment to quality, positions us to capture share. Going forward, we'll continue to invest in brand building, innovation, and operational efficiency to drive long term value.

Speaker 2

With that, I'll turn it over to Anya for more financial details. Anya?

Speaker 3

Thank you, Jason, and good afternoon, everyone. I will now provide you with some additional details on the second quarter of twenty twenty five financial results and our outlook for the full year. I am pleased to share that we have delivered another strong quarter of high growth top line, robust gross margins and disciplined spend management. Net sales grew 19.9% to $12,000,000 compared to $10,000,000 in the prior year period and $11,700,000 in the last quarter. Similar to the first quarter, our wholesale channel led the company's growth in the second quarter increasing by 47% year over year and accounting for 48% of our total net sales.

Speaker 3

This growth was driven by distribution expansion and velocity acceleration at shelf in grocery and club stores. E commerce sales increased by 2% year over year and contributed 52% of total net sales led by continued growth on Amazon platform. Gross margin in the second quarter delivered robust 39.9% compared to 41.8% in the corresponding prior year period. Although Q2 gross margins were about two points lower than in the 2025 and in the corresponding period a year ago, We are very pleased with these results given commodity inflation and our key raw materials such as coffee and coconut milk powder and increased tariffs cost. These results show resiliency in our ability to hold gross margins in high 30, which is at the level of best in class CPGs despite the inflationary pressures and even without using pricing as a lever.

Speaker 3

Our supply chain team continues to drive efficiencies by directly partnering with key raw material suppliers and co packing partners to find cost savings to offset rising commodities costs. Operating expenses increased 700,000 in the second quarter compared to the same quarter last year, driven primarily by two reasons. One, increased marketing, advertising and selling expenses due to sales volume growth and two, slightly increased general and administrative expenses driven primarily by stock based compensation, which is a non cash expense and largely offset by broad cost reduction measures. Net loss for the second quarter was $400,000 compared to $200,000 loss in the prior year period and adjusted EBITDA was positive $100,000 compared to a loss of $100,000 in the same quarter prior year. This $200,000 improvement in adjusted EBITDA was driven by top line growth, margin management and discipline around cost control as we are well on the way to breakeven and profitability.

Speaker 3

Now regarding our balance sheet. We ended the quarter with $4,200,000 in cash and no debt. The increase in cash usage in the second quarter relative to the first quarter was primarily driven by our decision to bolster our inventory in order to meet higher demand for our products, address out of stocks experienced early in the year, as well as forward purchase of raw materials in anticipation of potential tariffs on the import of raw materials that we source outside of The United States, particularly in Southeast Asia. As we sell through this forward purchase inventory during the 2025, we expect our cash balance to normalize and increase by the end of the 2025 fiscal year. In addition, during second quarter, our accounts receivables balance was elevated due to timing of shipments, which resulted in shift in payments received from Q2 to Q3.

Speaker 3

We continue to project that we have sufficient cash to fund our operations as we grow our business and make operating improvements that drive us forward to breakeven and profitability. And we also have an asset backed line of credit available for our use should we need it. We exited second quarter with a strong momentum in our core categories, exciting innovation and confidence in our team and our brand. Despite ongoing macroeconomic uncertainty, particularly within the e commerce landscape, we remain confident in our ability to deliver on our full year growth plans. Based on the strength of our first half performance, the continued momentum in wholesale channel and strong execution across our organization, we are reaffirming our full year 2025 net sales growth guidance in the range of 20% to 25%, gross margin to hold in the opportunities and breakeven adjusted EBITDA.

Speaker 3

We expect full year operating cash usage to be approximately $2,000,000 driven by an incremental investment in inventory to support top line growth and minimize out of stocks. And now I will turn the discussion back over to Jason for any closing remarks.

Speaker 2

Thank you, Anya. Our 20% sales growth is among the best in our industry and speaks to the demand for our healthy functional foods. I want to reiterate our confidence in our mission and our team and in the long term opportunity for Laird's Superfood. Our brand is strong in health and wellness, and our balance sheet remains attractive and with no debt. Despite the challenges presented by tariffs and a less confident consumer, we are optimistic in our team's ability to navigate these issues and deliver long term value for our shareholders.

Speaker 2

Thank you for joining us again today, and thank you for your continued interest in Laird Superfood. This concludes our second quarter twenty twenty five prepared remarks, and we are now ready to open the call to questions.

Operator

Our first question comes from George Kelly, ROTH Capital Partners. George, your line is now open.

Speaker 4

Hey, everybody. Thanks for taking my questions. First one for you is just about your revenue guide for the year. If I just kind of play that through in the back half, it bakes in a pretty significant kind of step up versus the revenue performance in the first half. So I was just wondering what you're seeing that gives you confidence that you'll be able to hit on that that two half step up.

Speaker 2

Hey, George. It's Jason, and I'll jump in, and and I'll let Anya add any color any color that she'd like to as well. It's a good question and and, obviously, something that we've scrutinized quite a lot as well. And, you know, the the climate right now is not a high growth climate for most companies. So so we feel really great that we're able to affirm that guidance and and that we are still growing, you know, at 20% or more clip or projecting to grow at that clip over the course of this year.

Speaker 2

So remember a couple of things happened in the first half of the year that we don't anticipate happening in the second half. The first the first one occurred in q one where we had a significant out of stock issue that impacted sales of our powder creamer products and some other products as well, but predominantly our powder creamer products, to the tune of we estimate over a million dollars worth of sales. Secondly, there was a really significant q two event that took place when UNFI was hacked with a cyber hack cyber attack. And so we lost shipments for a number of weeks then as well. So,

Speaker 4

you

Speaker 1

know and and that's a

Speaker 2

large part of our business, course. You know? We we primarily have two distributors in the natural and neuro portions of our business that being unified in KE, and so when half of that goes down, it really makes some dent. So we don't anticipate having events of that magnitude in the back half of the year. And at the same time, we picked up some additional distribution that'll start to go live here over the course of the next weeks, the next months, and feel like we we're in a really great position to expand in the additional distribution gains that have been pitched and not yet awarded.

Speaker 2

So, you know, we'll be watching those obviously very closely as we go forward. And then finally, George, I'd tell you the the liquid business that went through a transition at the end of last year and at the beginning of this year took a couple of months to really get fully back to to where they've been, and and we're just hitting our stride on that again right now. So you're seeing velocities back up to approximately where they were on a per ounce basis or total ounce basis, and sales basically coming right back to where they were as well. So a a little bit of pain as we went through that transition, a lot of great learnings, but but a little bit of pain, and and we think we're through that as well. So a lot of things going really well for us as we start the second half.

Speaker 4

Okay. That's all. That that's really helpful. Maybe just to to follow-up with a few more questions just on your explanation. Is there a way to quantify the impact from that cyber attack?

Speaker 4

And then secondly, on the liquid products, can you give more detail? Just I think you're talking about the transition in sizing. And I I think I I saw recently that there's a new and improved formula, at least it's it's the one of one of the liquid products I saw was labeled that way. Is that part of the transition? And and just generally, how is the liquid product performing?

Speaker 4

Are you pleased with what you're seeing? Any more detail there would be helpful.

Speaker 2

Yeah. You bet. Good questions. And, you know, with the the UNFI, you know, we can't obviously, we can't get, to a perfect number on the UNFI outage. But our estimation, George, would be that it it probably cost us somewhere in the neighborhood of, of 10 points at retail, you know, maybe eight to 10 points at retail, over the course of, of, I would say, of that quarter.

Speaker 2

So it it all occurred in q two, and and it's obviously been restored now. But that that'll be our best guess. And so I don't know. You're probably looking at a few $100,000 of sales, that that would have been lost in that case. Not as significant as what we saw with our out of stocks, mostly because it didn't last as long.

Speaker 2

It was restored. They were restored on most products within a couple of weeks. With regards to liquid, yeah, that was the transition. What essentially, what happened is we went from 16 ounces to 25.4 ounces upsizing, and we had assumed that we would see pretty, I I would say, pretty steady TDPs, you know, with a little bit of bulkiness as you trend as you trend go to the transition. There always is some, and I think we had spoken about that a couple of quarters ago.

Speaker 2

And it just endured a little bit longer than we expected. We had one retailer in particular that was not fully on board with the pack change when it came out, so it took probably an extra month to get them to bring the products in. They're they're all in now, and they're flowing and and doing fine. But it but we're out of stock at that retail time. We're, like, six weeks actually in total.

Speaker 2

They're one of our larger not not one not the largest, but one of our larger retailers. So that that was certainly impactful. I mentioned there are a lot of good lessons learned coming out of that. You know, if I if I could do it all over again, we would have called out the upsizing of the product to the consumer. I think there was a value perception initially as consumers saw the price go up, but the package didn't look that different.

Speaker 2

You know, you assume that consumers see that, you know, 50% or just about 50% more or a little over 50% more products, but not everybody picks that up intuitively. And so that we just you know, a little bit of self inflicted wounds in there, George, and then a little bit of, of market challenges. And it took us just a couple of months than we anticipated to get through that transition. But, you know, I'm happy to say velocities are are now up where we had modeled them to be. Just pushing right up at at about the the, the conversion we expected.

Speaker 2

TBPs are just about to where they were. We're still working on a few of the smaller accounts. Yeah. That that are meaningful still when you add them all up in totality. But we feel really good about the closure that we've made over the last six or eight weeks on that, and feel like we'll we'll get all the way to Bright here over the next couple of months.

Speaker 4

Okay. Great. And then just one last one for me. Innovation items for the back half of the year and then into 2026, where are you most focused? Where where do you think you have the most opportunity?

Speaker 4

And that's all I had. Thank you.

Speaker 2

Yeah. You bet. So we're really excited about we've got we've got an incredible innovation spot. The hardest thing right now is is staging it in a or metering it in a a cadence with the team, you know, which is a pretty small team. So we we have to make sure we meter it and put out to a cadence that they can keep up with.

Speaker 2

So right now, we're working on a couple of things. Ironically, we're working on another transition of the liquid creamer. So it's great that we have all these lessons learned. We have been able to create a super optimized formula where we're going to be able to take out the last we we have a thumb in there right now that we're able to remove, and and we're we're able to take out move everything to coconut sugar, get rid of the the coconut oil and make it an entirely coconut cream based product. We're slipping it to organic, and we're putting it into a plastic bottle that will be a post recycled plastic bottles, very consumer friendly right now.

Speaker 2

You know, the the irony is these paper packages that seem like they would be recyclable are not actually recyclable in The United States because you need a two step system and very few communities have that. So so we're really excited about where that goes. We're applying all those learnings that we had the last time around to make sure that we we don't have to have any of those hiccups as we go forward this time. That's a big piece of it. That will be a very differentiated product in the marketplace, and we're getting great reception from the retailers that we've spoken with.

Speaker 2

And I think we've spoken with pretty much all of them at this point. We have a protein based coffee product that we're really excited about. There are a number of iced coffees with protein that have launched over the course of the last year to eighteen months. We saw a concept like this last last summer, and we've been honing our formula. We're really excited about that.

Speaker 2

This will be our first foray into dairy products, so there'll be more on that. But you probably have heard from us before that dairy is an area that we've been excited about. We believe that there is a super food entry into the dairy space where we can leverage the benefits of our functional mushrooms as well as a cleaner source of dairy. So we're looking you'll see we're looking at organic and other attributes as our entry point. And it's a very hot category, not only anymore online, but really living with the retail.

Speaker 2

So we're having some great discussions there as well and feel like we we really make hay with with that particular product. Those are the two largest that you'll see us looking at over the course of the next two quarters, George. And then, of course, next year, that dairy platform will really start to expand with some some exciting launches that we've been foreshadowing for a while.

Speaker 4

Thank you.

Speaker 2

You bet. Great to talk to you, George.

Operator

Our next question comes from Nicholas Thurwood with Company Maxim Group. Nicholas, your line is now open.

Speaker 5

Thank you for taking my questions. Can you first go into how the Amazon Day kind of promotional period went for the company? Hello?

Speaker 2

Sorry, Nicholas. We we lost you there.

Speaker 5

Sorry. Yeah. Can you go into how the Amazon Day promotional period, went for the company and any sort of customer acquisition metrics that you you have following that period?

Speaker 2

Yeah. Hey. Hey, Douglas. So, yeah, Prime Day went it went well for us. It went to plan.

Speaker 2

We had a couple of really strong days out of the gate, and then it tapered off a little bit in the last couple of days. It was a little bit of a different pattern than what we've seen in the past where consumers shop for a while and then end up purchasing later in the prime days. At least that's been the behavior that we've seen in past years. So we had a couple of really strong days out of the gate, and we came in. Think, I mean, we came in nice, I think, right where we expected to be Yeah.

Speaker 2

As per our plan. You know, Amazon in general, you guys probably see with ecommerce numbers. Ecommerce is slowing for us as it is for a number of other consumer brands. We're fine with that at the end of the day. We've talked a lot previous calls about how we really want to encourage our shop our our consumers to shop wherever they wanna shop.

Speaker 2

We really try, through our pricing and our margin structure to not care to to help them to not care and for us to not care. And so the way we've structured this, just as a reminder to everyone, is DTC is our highest priced portfolio. And we do that because if if consumers are interested in the brand, willing to shop here, interested in in all of the education that we provide on that site, and they do it all from the the, you know, from the comfort of their home, and they don't have to really take any effort to go drive out, use their gas, go to use their time to go to a a grocery that we feel like they that that should be the highest cost, you know, high highest priced products in our portfolio. And Amazon, on the flip side, while we'd like to run the same prices, ends up being a little bit more competitive just due to the the marketplace nature of of that platform. And then when you look at grocery, you find that those those are best prices.

Speaker 2

You know, consumers are using their time, their gas to go over and shop. And, obviously, when you have all the physical products there, it's a very competitive marketplace. And so we wanna make sure that we are as competitive as we can be. But when you look across our margin structure and the way that we leverage marketing into those various channels, what we try to do is make ourselves completely apathetic to where the consumer shops. We want to we want the consumer to shop where they wanna shop, and we want to not care.

Speaker 2

And so we've really tried to build a model that gets us to approximately the same margin across all the channels. And you really see that, I think, in our results this quarter where we saw a significant shift towards that bricks and mortar business, which we've been saying is is our strategy since the day I walked in the door here. You know? And and so we're we're really excited to see the growth in the bricks and mortar side. We'd like of course, we'd like to hold on to as much ecommerce sales as we can.

Speaker 2

But at the end of the day, we feel the consumer will shop where they want to shop, and we want to be in the position to allow them to do that. And I think the results of this quarter really demonstrate that. And so, you know, it's a little bit more information than you're asking for with regards to Amazon. But, you know, with with Amazon, what I'd say is it is slowing a bit for us. It's slowing for a lot of other consumer brands that we speak with that have reported recently.

Speaker 2

So is the DTC platform. We think we saw a tremendous amount of opportunity, though, in both of those platforms, but we're going to spend appropriately and, you know, market to those in a cost effective way just as we do across all the channels and, ultimately, let the shoppers know where they wanna go. Yeah. Thank you

Speaker 5

for all the detail. That that makes sense, focusing on the wholesale channel. Kind of talking about focusing on the wholesale channel, a lot of your increased like spending was in marketing and advertising while trade promotion was flat year over year. Do you have any plans to increase trade promotion because gross margin was in the kind of in the upper range of guidance?

Speaker 2

Or is it are

Speaker 5

you kind of not doing a ton of trade promotion be as a wait and see thing on, input costs related to tariffs?

Speaker 3

Yeah. Hi, Nicholas. This is Anya. Thanks for the question. Yeah.

Speaker 3

I think it's a good one. It's certainly something that we are discussing as we are looking into second half and given the overall macroeconomic climate, I think consumers are certainly being somewhat price sensitive. As, as you perhaps noticed that we have not taken pricing so far. We have not increased our price given the commodity inflation that we experienced in our material as well as tariffs impact as, you know, we already experienced to some degree and it's rolling out, you know, even at the higher rates in the back half. So we reaffirmed our gross margin targets for full year, and, you know, we are discussing what other supply chain efficiencies we can implement in order to offset those inflationary costs without increasing pricing, but promotional strategy is definitely something where we can win into if we see the need in the back half.

Speaker 2

Yeah. Think it was I I love that question because as Andy said, it's something we've been kicking around. We do we do have the luxury of of a strong gross margin and have the ability to invest into our categories and into our, you know, our channels and and retail customers all customers. In fact, right now, when consumers are, as Anya pointed out, becoming more price sensitive. So we feel like we're in a really strong position given the gross margin structure that we have, and we'll utilize that as necessary to drive growth when we feel that we can win and take take share from competitors.

Speaker 5

Okay. That that all makes sense to me, and I I appreciate the thought both of you gave into answering my question. That's my last question. I'll return back to the queue.

Speaker 2

That's great. Thanks, Nicholas.

Operator

Our next question comes from Eric DeLores with the company Craig Hallum. Eric, your line is now open.

Speaker 6

Hi, everyone. This is Adam on for Eric. Thank you for taking our questions. I only have one question here. Can you expand on some of the distribution gains in grocery and club?

Speaker 6

How broad based are these gains, and should we think of one channel driving more growth than the other? And any color in terms of geographic regions would be very helpful. Thank you.

Speaker 2

Yeah. Hey, Adam. Well, what's up? Yeah. So, hey, I, couple of things.

Speaker 2

Those are great questions. So, in this, I'll talk quarter and then I'll talk to half a little bit too because just to remind everyone about our business. Our our business our orders are a little bit chunky. What I mean by that is we have three three large customers, two of which are distributing to a series of of retailers. So as I mentioned a little while ago, UNFI and KE are two of our largest customers, and then we have our club business as well.

Speaker 2

And those are you know, those three customers get direct shipped or picked up, you know, depending on on their business model. Either we're shipping to them or or they're driving trucks to pick up. And the way that our business works, because we don't have direct shipments to retailers seeing the size of our business right now, not very many, and then we do a couple smaller ones. But because we go we go through distributors and then and then, of course, the cloud business, it ends up the orders and when they come in end up driving orders to look very different than yours. And so you get a large order, you know, on June 28 per shipment on June 28, and it really changes the dynamics of that quarter, obviously, relative to, you if they come in a couple of days later in in in the third quarter in July.

Speaker 2

And so that's a little bit of what has happened in q two. So and that's why I'll talk to to the third the second quarter and then the first half. In the second quarter, we did have a significant uptick in our club business, And we had what I would say was a sequential slowdown in our retail business. And that's not because of scanner data as much as it is because the the distributors had placed significant orders in q one just before q two started, and so they were flushed full of inventory as they started q two, whereas it was the opposite with our club business. And so we really have to look at these things on on a broader basis than just in order to understand the dynamic given the size of these orders relative to the size of our business.

Speaker 2

So all that aside, I would tell you, yes, our club business has had very strong expansion. We have picked up additional regions of our creamer products. I think you guys heard from us in the past that we had, I would say, most of California, some of the pack Northwest, and then, regionally, the the city or region kinda carried all the way over to Colorado. And so that was really our footprint on the creamer business. We tested coffee a while back.

Speaker 2

I had mentioned it had done really well. And in q two, we did receive a rotation on the coffee business that has also performed very well. That is that's across the entire region within the the Los Angeles region. So as we go to q three and q four, we've expanded distribution already this year. That will continue to, yeah, to to bear fruit.

Speaker 2

And then we also anticipate oh, and I'm sorry. And I I forgot to mention that the creamer business also saw an expansion into the Southeast Region for club. So we're starting to pick up a footprint that is at a West Coast all the way into Colorado and then the Southeast, and we're performing very well in all those regions. And then in the coffee business, I I mentioned that we we I think that's a rotation in Los Angeles. It's very likely that we should see additional rotations picked up by other regions of coffee as well.

Speaker 2

And so that's all still in the works. You know, nothing nothing confirmed, but I'd say looking very strong that we could see a growth in in the club business as we go into the back half of this year. In the Mule and Natural world, Mule, we've continued to see steady gains. You know, we haven't haven't seen the monstrous full because, you know, we're not into mass in a major way this time. We've done some work with Target.

Speaker 2

We have a couple of items in those stores. We have items in King's Supers, Safeway, Albertsons, HEB, Wegmans, Fresh Market, and think we're fine. We're we're scanning into them. We've talked about in the past. We continue to see expansion into those those stores as well.

Speaker 2

So we pick up items as as we continue to to perform with the items that we have in there already, and that's that's been the case over the course of this year. And then it in in the natural channel, Sprouts has just been an unbelievable customer for us for quite some time. And we've talked about that. I know we've talked about that quite a lot, but but we have significant expansion, again, that's take some of which has taken place here over the last couple of months and some of which has been confirmed, but really doesn't hit until the back half of this year. So it's pretty broad based.

Speaker 2

I would tell you across Yulo, Natural, and Club, we believe as we go forward, as I mentioned, this is the strategy for us. We intend to continue to grow distribution in the bricks and mortar space across all of these channels. We have a great sales team that's engaged, a broker that's very supportive, in helping us make these calls, and and we're just seeing a lot of success across the board right now.

Speaker 6

Great. Thank you so much. That was very helpful. Thank you.

Operator

You There are no more questions registered in queue. I'd like to pass the conference over to our hosting team for closing remarks.

Speaker 2

Well, thank you. I think really I'd just like to say thank you to everyone for joining our quarterly earnings call today. And we look forward to talking to you again in three months. There's been a lot of progress made again, and we're really excited to be able to come in and and reaffirm our guidance that we've given. And I feel like we have a lot of opportunity as we go forward from here with some of the innovation that we mentioned, the expansion that we talked about.

Speaker 2

And so I'll be excited to talk to you in about three months from now. So have a great day. Thank you all very much.

Operator

That will conclude today's conference call. Thank you for your participation, and enjoy the rest of your day.

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