The Calmer Co. achieves record sales in Q4 and plans US expansion

CCO hit a new milestone in Q4 FY24 with record sales, thanks to strong eCommerce figures
It’s a 68% increase from the previous quarter and part of a big growth year
The company is now eyeing significant expansion into the US market

Special Report: The Calmer Co. has delivered a record-breaking performance in Q4, with soaring eCommerce sales and a major retail expansion setting a promising stage for its push into the US market.

The Calmer Co (ASX:CCO) offers natural products for relaxation and sleep, including kava and hemp-based powders, teas, shots, and capsules.

The company had an outstanding performance in the fourth quarter of FY24, achieving significant growth and demonstrating strong progress across both its eCommerce and retail channels.

During the quarter, the company hit a new milestone with record sales of $1.8 million, marking a significant 68% increase from the previous quarter, and an impressive 194% rise from the same period last year.

This performance demonstrated the company’s year-long consistent sales growth, consolidating a FY24 unaudited annual sales result exceeding $4m for FY24.

CCO’s eCommerce sales, in particular, saw impressive growth throughout FY24, with an acceleration in the fourth quarter.

Online sales in the Australian market alone surged by over 500% during the year.

This growth was driven by health-conscious consumers seeking healthier alternatives to alcohol, as well as those looking for supplements to manage anxiety and improve sleep.

The company’s digital advertising efforts, mainly on Meta platforms and Google search, helped expand its customer base to over 30,000. Additionally, repeat sales increased through targeted email marketing campaigns in Q4.

Cash receipts also saw a solid increase, growing 57% from the previous quarter to surpass $1.44 million, and reflecting a 130% rise from the previous year.

Despite a 25% increase in operational expenses, the company managed to keep expenses under control as sales and cash receipts surged.

One of the key highlights this quarter was the expanded presence of its products in Coles Australia.

Following a successful initial launch, Coles has increased the range of three of The Calmer Co.’s SKUs by 40%, covering the 50g and 150g FijiKava Instant Kava and the TakiMai Kava-shot, Australia’s first ready-to-drink kava product.

CEO Anthony Noble commented on the quarter’s achievements

“Australian eCommerce continues to outperform expectations and our retail footprint across Australia has extended significantly after Coles elected to expand our product listings and stock FijiKava and Taki Mai products in 799 Coles locations Australia wide,” said Noble.

“This demonstrates again that kava appears to be part of a broader based health trend.”

eCommerce makes 70pc of total sales

Sales analysis reveals that Australian and New Zealand markets generated $1.3 million, primarily driven by the Shopify eCommerce site and Coles.

Sales in the USA increased by 20% to $457k, supported also by strong performance on Shopify and Amazon.com.

The Fiji market, meanwhile, contributed 6% of total sales, with the rest divided between eCommerce and retail channels.

The company’s eCommerce sales, which grew over 500% in the Australian market throughout FY24, contributed more than 70% of total sales for the quarter.

Retail sales made up 23% of the total sales, primarily driven by growing orders from Coles in Australia.

Wholesale orders, including those for kava bars and Kavaton extract sold to Dutch nutrition multinational IMCD, contributed just over 6% of sales, totalling $115,000 for the period.

Drinking kava powder remained the key driver of revenue, accounting for more than 90% of sales across all channels.

Medicinal products, such as tablets and capsules, have been discontinued in Australia, with these lines contributing only 4% of total sales in the quarter.

Ready-to-drink (RTD) products, including Taki Mai Kava shots, were sold exclusively through Coles Australia in Q4 and represented 4% of total sales.

These RTD shots will also be launched online in Australia in the first quarter and are expected to play a bigger role in the sales mix for FY25.

Coming to America

During the quarter, the company also completed a successful rights issue, raising $2.65 million.

These funds will be used to upgrade the Navua facility in Fiji and support expanded inventory and marketing efforts aimed at entering the US market, in line with the company’s eCommerce-driven strategy.

CCO says its growth trajectory, particularly in Coles retail and early success in the US market, sets a positive outlook for future expansion in the coming year.

“We are now setting our sights on the US market,” said Noble.

“The oversubscribed capital raise will allow us to increase production capacity with the aim of replicating our eCommerce success in the world’s biggest consumer goods market where exciting new flavoured RTD products can enable a new horizon of continued growth.”

“It is an exciting time of rapid expansion for our company,” he added.

This article was developed in collaboration with The Calmer Co., a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.