Canadian energy drink maker Guru experienced “temporary significant headwinds” as it aims to unlock more control and position for long-term growth, company leadership reported in its second quarter earnings this morning.
Net revenue was CAD$6.5 million in Q2, declining from CAD$8.0 million in the same period last year. The Montréal-based company announced that year-over-year growth stalled as a CAD$1.4 million from a U.S. Costco account was not renewed from 2024.
Guru confirmed it had secured new wholesale club accounts slated for Q4 in both Canada and the U.S.
Not including the lost Costco rotation in 2024, the energy brand improved its U.S. sales 38.9%. Brand leadership cited its recent launches of Zero Wild Berry and Tropical Punch as showing signs of gaining traction among U.S. consumers.
Despite the revenue decline, Guru president and CEO Carl Goyette stated he was “proud” of the work the company had done in the last quarter. Goyette highlighted Guru’s decision to return to a direct distribution model at home after ending its distribution agreement with PepsiCo Canada in May.
“We took back control of our destiny in Canada. With 100% focus on Guru, we now have a direct relationship with retailers, more agility, more control and more opportunity to go on the offense,” he said.
Retail shipments in Q2 were down 24% compared to the same quarter last year with a 45% decline as the PepsiCo agreement ended, Goyette reported, causing sales to drop during the “temporary” shipment shortfalls.
“If PepsiCo would have shipped more, we would have sold more to them,” he said.
The company announced it was hiring new sales team members to service its return to direct distribution in Canada.
Gross margin rose to 59.7% in Q2, improving from 55.8% in Q2 2024. The brand also cut its net loss nearly in half from CAD$2.6 million to CAD$1.4 million year-over-year.
When asked during question-and-answer if the brand was in a position to continue to lower its net losses and increase sales, CFO Ingy Sarraf said it was “very sustainable.”
“It’s more a function of us making sure we’re very efficient. We’ve also looked at making sure that high impact ROI activities are kept in place.”
Although company leadership would not directly comment on when Guru is expected to return to profitability, the business is “taking the right steps to get there in due time,” Ingy said.
Adjusted EBITDA loss improved by 55.0% to CAD$1.2 million.