Laird Superfood, Inc.

Good afternoon, and thank you for joining the Laird Superfood first quarter 2024 financial results. My name is Kate, and I will be the moderator for today's call. At this time, all lines are in a listen-only mode and will be until the question and answer portion of the call. I would now like to turn the call over to Trevor Russo. You may proceed, Trevor.

Thank you, and good afternoon. Welcome to Laird Superfood's first quarter 2024 earnings conference call and webcast. On today's call are Jason Beek, Laird Superfood's president and chief executive officer, and Anya Hamel, our chief financial officer. By now, everyone should have access to the company's first quarter earnings release filed today after market close. It is available on the investor relations section of Laird Superfood's website at www.LairdSuperfood.com. Before we begin, please note that during the course of 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 beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. With that, I'll turn the call over to Jason.

Thanks, Trevor. Good afternoon, and another big thank you to everyone who has joined us again. Today, I am excited to share that the Laird Superfood turnaround story has officially become a growth story once again. During the first quarter, we grew the net sales of our business by an impressive 22% versus the same period one year ago. Our sales growth during this period was led by our e-commerce segment, which grew 33% year over year, despite another sizable decrease in marketing spend across those periods. Amazon led the way this quarter with an astounding 48% growth rate, driven by our continued improvement in product availability, marketing effectiveness, and inventory management. We have continued to hone our execution, driving out unauthorized resellers of our products and winning the buy box to ensure that our brand sales on the Amazon platform are being filled by our Laird Superfood team. Perhaps the biggest surprise to DTC industry observers will be our impressive 25% growth in our own DTC business, where we continue to demonstrate our ability to convert viewers into buyers, buyers into repeat buyers, and repeat buyers into subscribers. Approximately half of our DTC business is now made up of subscription sales. Over the past months, our team has focused on creating a website and email platform where we can share health and wellness, nutrition, and lifestyle tips and stories with our consumer base, thereby giving them a reason to continually interact with our brand and website. And by continuing to leverage Laird Hamilton and his wife, Gabby Reese, we have been able to create highly relevant, authentic, and original content that provides a competitive advantage for our brand. Further, our customer service and net promoter scores remain best in class, and our consumers clearly recognize and appreciate the care with which we handle their orders, from their website interaction to arrival at their door. On the wholesale side of our business, we grew net sales by 10% year over year during Q1, which is even more impressive since it was done without the benefit of a price increase during the last 12 months. Even more encouraging is that retail scanner sales for our layered superfood brand were up significantly more than our net sales during this quarter reported as plus 30% across U.S. food for the 12-week period ending March 24th. Given the growth rate discrepancy between retailer scanner data and our LSF internal sales, there was clearly a deloading of inventory across our two large distribution partners, and so we expect to see continued strength in this channel of business as we move forward. Within wholesale, our business grew during Q1 across all our measured categories, in terms of both units and dollars, led by our coffee and instant latte products, which now combine to be our largest category at retail. Our club business also remains extremely healthy, and we continue to see growth in our sales velocities behind our improved product following last year's quality event. On the operations side, our team continues to demonstrate strong results driven by supply chain execution across procurement, production and distribution, as well as favorability in our trade spend. Our gross margin was 40% during Q1, which was several points ahead of our own internal projections, despite a planned write down in the value of our coconut milk powder. That planned write down was actually a positive result for us, as it was driven by the recognition that we are now able to procure our largest commodity ingredient at a significantly better rate than we had previously been able to. With our supply chain team executing at a high level, we have been able to effectively offset various cost increases and, at this point, expect to be able to do so throughout 2024. As we shared previously, the first quarter is a strategic investment quarter for us, as the marketing activities that we fund early in the year are able to be leveraged during subsequent quarters. That said, we were able to once again reduce our year-over-year marketing expense during Q1 behind better execution and more efficient activations. Our marketing expense for the quarter was just over 20% of net sales, which obviously represents a dramatic decrease from prior years. As we move forward, our midterm goal is to continue to press this down into the low T's and eventually into the high single digits. But with the opportunities in front of us and a return to solid brand growth in the first quarter, we are quite pleased with where this currently stands. In fact, we are very pleased with the first quarter results where we over executed our internal plan and are now on pace to exceed our stated goals for 2024. With this in mind, I think it's time to change the storyline on Laird Superfood from a turnaround project to a growth story, one in which we are growing our consumer base across our various sales channels and preparing ourselves for the next chapter of expansion. With that, I will now turn it over to Anya to discuss our first quarter 2024 results in more detail.