GURU Organic Energy Reports Q3 Earnings

Almost a year since going public, Canada-based GURU Organic Energy reported a revenue increase of 22% to $8 million during its third quarter earnings call today for the period ending July 31, 2021.

The company announced in June that it had raised over $50 million in a bought deal public offering. President and CEO of GURU Carl Goyette told BevNET at the time that the new capital would primarily be used to support its transition from third party brokers to PepsiCo’s Canadian distribution network. The energy drink maker reported a 32% sales increase across its home country this quarter and highlighted the addition of 2,000 points of sale, as well as continued sales and velocity increases in Canada, as key growth drivers.

“The $49.6 million in gross proceeds generated by our recently completed bought deal and private placement further strengthen our financial position to over $75 million of cash and credit facilities,” said Goyette in a press release. “This enables us to ramp up our brand positioning and marketing efforts across North America and in support of PepsiCo.

Gross profits for GURU rose to $5 million this quarter, a 16% increase from the $4.4 million it saw this time last year. The company’s gross margin remains strong but declined three points from 63% in Q3 2021 to 66% in Q3 2020. According to a press release, the decreased margin, which resulted in approximately $2 million in losses, correlates with the company’s increased efforts toward promotional activities, the cost of operating as a public company and overall higher product costs since the start of the pandemic, including a rise in transportation fees.

Net losses totalled $2 million during the third quarter, compared to the company’s net income of $1.2 million for the same period last year. Over the nine month period net losses reached $3.9 million in 2021 versus the $1 million net income the company saw in 2020. According to a press release, the majority of the net losses is attributed to increased marketing activities in Ontario, Western and Atlantic Canada as well as set-up costs for additional expansion plans.

In terms of its U.S. expansion, GURU’s sales dropped 7% year-over-year during Q3. According to a press release, the decline has been attributed to the delayed introduction of its large banner product to the U.S. market which was originally set for July but has been pushed to early Q4.

The energy drink brand recently expanded U.S. distribution to Rite Aid stores and has added 1,000 independent retailers across Canada and the U.S this quarter, according to the release. SPINS and IRI data report that GURU’s growth at retail in the U.S rose 38% during this quarter on a year-over-year basis and revenue increased by 36% to $21.7 million during the nine-month period.

“Growing our market share in Canada and the U.S. and truly disrupting the industry at a national level will require focus and discipline, but we are confident in our ability to achieve this, as the organic, natural and better-for-you energy drink brand of choice,” Goyette said in a release.