BranchOut Food NASDAQ: BOF executives said the company is focused on increasing factory utilization, diversifying its customer base and building inventory to support what management expects to be a record second quarter.
During the company’s first-quarter 2026 earnings call, CFO John Dalfonsi said BranchOut filed its quarterly report and issued a shareholder update alongside the call. The quarter was characterized by increased inventory, cash usage tied to production and preparation for deliveries expected in the second quarter, according to management.
Eric Healy said BranchOut continues to follow a strategy centered on filling capacity and expanding use cases for its Radiant Energy Vacuum, or REV, drying technology. He said the company has installed a fourth production line that is coming online this month and was intended primarily to support additional REV-based products, including dried dairy products, dried cheeses and cheesecakes.
Costco, Sam’s Club and Walmart Opportunities Highlight Sales Pipeline
Healy said BranchOut continues to see traction with Costco, including a June delivery of its Mango Chips product into the Bay Area region. He said the product was scaled up in March and April and that management believes it could become the company’s top-selling product.
BranchOut’s Pineapple product also continues to be reordered by Costco, Healy said. The product is expected to go into the Southeast region in June, and that region has placed a larger order for the fourth quarter, according to Healy.
Healy said the company has also developed multi-pack products for Costco and has those products in front of four or five regions for the back-to-school timeframe. He estimated there are $3 million to $4 million in Costco opportunities under consideration, while cautioning that the company cannot guarantee it will win all of them.
At Sam’s Club, Healy said BranchOut recently delivered its Crunchy Fruit Chips, a mix of four fruits in one bag, for nationwide placement. He said the product has been on the floor for about two weeks and is selling through faster than expected.
According to Healy, Sam’s Club likes to see revenue of $400 to $600 per club per week for an everyday item, and the product has been “consistently hitting about $600” in its first two weeks. He said management is hopeful the item could become an everyday placement, though he said a repeat rotational order would also represent a successful outcome. Healy described the potential upside as a $15 million business with that one SKU if placed every day.
Healy also discussed a recent meeting with Walmart, where BranchOut presented more than 35 products across dried fruit, dried vegetables, dried cheeses, cheesecake products and chocolate-covered fruit. He said the company originally hoped for potential launches late this year, but now expects opportunities are more likely at the beginning of 2027.
Industrial, Tolling and Private Label Channels Expand
BranchOut is also pursuing growth in industrial ingredients, private label and tolling arrangements. Healy said the company generated about $2 million last year in industrial ingredient sales and now expects that channel to reach roughly $6 million to $7 million this year.
Healy said the industrial channel is strategically useful because it allows the company to sell product that may not meet retail quality standards but can still be used as an ingredient. He also said BranchOut’s strategic partner MicroDried has committed to more orders for the rest of the year.
The company is also working on a potential tolling arrangement with a large-scale brand that has a REV-based product. Under the arrangement, the customer would provide raw material and BranchOut would provide drying services. Healy said the opportunity could also represent about $6 million to $7 million in revenue and could help margins and cash flow because BranchOut would not need to purchase raw materials. He said management hopes the arrangement will be finalized by the third quarter and ramp in the fourth quarter.
Healy said BranchOut expects potential branded SKU placements at Target in the second half of the year, with the retailer considering four to six SKUs and making final decisions this month. He said the opportunity is not expected to be a “huge revenue gain” initially, but could provide a foothold with the retailer.
International and New Product Development Efforts Continue
Healy said BranchOut is expanding internationally through a new partner in Europe that sells into large European grocery stores. He said the partner has been sampling BranchOut’s dried fruits with retailers including Aldi and Lidl, and that feedback has been positive. The company expects its first order in Europe, according to Healy.
BranchOut is also working with a chocolate company that Healy said is likely to place an order in July for fruit to be enrobed in chocolate. He estimated that order could be about $1 million.
The company is also developing dried cheese products, including potential combinations of dried cheese and dried fruit. Healy said the concept came out of a Walmart request related to GLP-1-focused products, with fruit providing a fiber callout and cheese providing a protein callout.
Financial Update: Inventory Builds Ahead of Deliveries
Dalfonsi said first-quarter revenue was $2.6 million and that the company expects a record second quarter. He noted that inventory increased from $2.385 million at the end of December to $4 million at the end of March, and said inventory was higher at the time of the call.
Dalfonsi said BranchOut raised capital through several sources during the period, including selling 500,000 shares through an at-the-market program at an average price of $3 in January, approximately $1 million from warrant exercises and $2.25 million from Kaufman Capital Partners. He also said the company announced plans to take an additional $750,000 from Kaufman Capital Partners.
He said the funds have gone into inventory and some factory buildout and machinery costs. Dalfonsi said the company expects to collect about $5 million in cash in June and July and should have “plenty of money” through year-end unless it receives a transformational order, which he defined as a $15 million-plus order or similar event.
On guidance, Dalfonsi said management continues to expect annual revenue “with a two in front of it,” and said the revenue split may be roughly 35% in the first half and 65% in the second half, rather than the previously discussed 40% and 60%, because the second half looks stronger than expected.
Dalfonsi also discussed the company’s financing plans, saying BranchOut is currently using Kaufman Capital for 8% money because it is flexible. He said the company eventually expects to work with a major commercial bank on a revolving credit facility, though he said banks want to see more performance before providing that financing.
About BranchOut Food NASDAQ: BOF
BranchOut Food Inc develops, markets, sells, and distributes plant-based dehydrated fruit and vegetable snacks, and powders in the United States. The company offers dehydrated fruit and vegetable-based snacks, including avocado chips, chewy banana bites, pineapple chips, brussels sprout crisps, and bell pepper crisps; avocado, banana, and blueberry powders; and industrial ingredients, such as bulk avocado powder, dried avocado pieces, and other fruit powders/pieces. It also provides chocolate covered fruit items and private label products for retailers.
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