Kits Eyecare Ltd. ((TSE:KITS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Kits Eyecare Ltd. recently held its earnings call, showcasing a strong performance characterized by record revenue, significant customer growth, and increased profitability. Despite challenges in the U.S. market and a minor impact from the Canada Post strike, the company’s consistent execution and growth in the Canadian market and product innovation were standout positives.
Record Revenue Achievement
Kits Eyecare delivered a record revenue of $52.4 million, marking a 25% increase year-over-year and a 6% rise sequentially. This achievement underscores the company’s successful strategies, marking the 12th consecutive quarter of positive adjusted EBITDA.
Strong Customer Growth
The company welcomed 99,000 new customers in Q3, pushing its active customer base past the 1 million mark. This represents a 37% increase in new customer growth year-to-date, indicating accelerated awareness and adoption of Kits Eyecare’s offerings.
Increased Profitability and Margins
Kits Eyecare’s adjusted EBITDA rose to $2.9 million, a 79% increase year-over-year, with gross margins expanding to 34.6%, up 170 basis points from last year. This highlights the company’s effective cost management and operational efficiency.
Canadian Market Expansion
The Canadian market saw a robust expansion with a 38% year-over-year growth, driven by strong repeat purchases and new customer acquisition. This growth reflects the company’s solid foothold and successful market strategies in Canada.
Growth in Kits Branded Contact Lenses
Kits branded contact lenses experienced a remarkable 380% year-over-year growth, with gross margins exceeding 50%. This significant growth demonstrates the increasing popularity and demand for Kits’ proprietary products.
U.S. Market Challenges
The company faced challenges in the U.S. market, leading to a tempered investment approach due to uncertainties around regulatory and market conditions. This cautious stance reflects the company’s strategic risk management.
Impact of Canada Post Strike
The Canada Post strike in late September had a nominal effect on Kits Eyecare, slightly impacting product delivery. Despite this, the company managed to maintain its strong performance.
Forward-Looking Guidance
Looking ahead to Q4, Kits Eyecare anticipates revenue between $52 million and $54 million, with adjusted EBITDA margins of 4% to 6%. The company remains optimistic about sustaining its growth trajectory and profitability, driven by continued customer acquisition and product innovation.
In summary, Kits Eyecare’s earnings call highlighted a robust performance with record revenue and significant growth across various segments. The overall sentiment was positive, with the company demonstrating resilience and strategic foresight in navigating market challenges. Investors and stakeholders can look forward to continued growth and innovation from Kits Eyecare.