FREE - Whole Earth Brands outlines margin improvement aims after earnings miss

2023-03-13 07:53:13 ET

Whole Earth Brands ( NASDAQ: FREE ) highlighted plans to improve profitability after posting a wider than expected loss in Q4.

The Chicago-based food company reported a $1.44 per share loss, disappointing against the consensus expectation of a breakeven quarter. Revenue also came up narrowly short of expectations. Gross margins contracted 880 basis points year over year.

“We are pleased to deliver double digit constant currency revenue growth and meet our initial revenue guidance for full year 2022, despite navigating temporary supply shortages,” Executive Chairman Irwin D. Simon said. “Looking ahead, we are excited about the leadership that our Interim CEO, Michael Franklin, is bringing to the organization and I look forward to working together to drive profitable growth and achieve our long-term objectives.”

Management expects net revenues in the range of $550M to $565M for 2023, slightly below the $566.04M. Adjusted EBITDA for the year is expected to range from $76M to $78M.

“I am confident that our business strategy is on track, but I also believe that it is prudent to take the opportunity to make some select reinvestments in our organization, including our people and our brands,” new CEO Michael Franklin said. “It is imperative that we repair our margin profile as it is the primary means by which we will generate higher growth of operating cash flows, which in turn will allow us to de-lever the business and position the business to take advantage of the multitude of consolidation opportunities that we see in the marketplace today.”

Shares traded in a volatile manner in premarket hours on thin volume.

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