TTCF - Tattooed Chef stock tumbles more than 10% after preliminary results disappoint
2023-03-20 11:38:17 ET
Tattooed Chef ( NASDAQ: TTCF ) stock slumped on Monday after announcing preliminary results and a delay in its 10-K filing.
While the company filed a Form 12b-25 on Friday evening, delaying its 10-K filing, the company nonetheless provided an unaudited earnings update.
The updated results reflected the expectation of about $234M in net revenue, below the prior forecast of $235M to $245M. Gross margin for the full year was also projected to be worse than prior forecasts, with a range of -4% to -5% came in below the prior guide of 0% - 3% on the positive end. Based upon cash burn, the company noted it “continues to require additional debt or equity capital” and is currently seeking to raise capital.
“We continue to execute a plan that we believe will reduce cash burn, reduce our annual losses, and strengthen our brand profile and retail presence,” CEO Sam Galletti said. “Although we still have much work ahead of us, we are seeing early indications of our progress on a sequential quarterly basis, with material improvements expected to manifest beginning in Q1 2023 and continuing throughout the year.”
Galletti announced a number of cost cuts to start 2023, including a $2M cut to promotional spend, $12M in reductions for SG&A costs, and $5M in sales and marketing expense reductions. The company intends to reduce costs by about $40M in 2023, up from the prior forecast of $30M in cost savings. Management expects to be able to reach breakeven adjusted EBITDA and become cash flow neutral during Q4 2023.
“The challenges that we are confronting are significant, but so are the opportunities,” Galletti concluded. “As Tattooed Chef’s largest shareholder I am personally invested in our long-term success.”
Shares of Tattooed Chef ( TTCF ) fell about 18% at the intraday low before rebounding to about a 10 % drop as the trading day progressed.
Read more on why the Seeking Alpha Quant Team has held a Strong Sell rating on the name since 2021 .
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Tattooed Chef stock tumbles more than 10% after preliminary results disappoint