NGS Q1 Revenue Falls 24.7% Amid Marketing Cuts, Expands Walmart and CVS Presence
Nutritional Growth Solutions reported a 24.7% revenue decline in Q1 FY25 but bolstered its financial position with a $1 million AUD convertible note placement, while preparing for major retail launches at CVS and Walmart.
- Q1 FY25 revenue down 24.7% to $447K USD due to reduced marketing spend
- Completed $1M AUD convertible notes placement to support operations
- Happy Tummies® launching in 5,500 CVS stores in July 2025
- Expanded Walmart presence with third flavor SKU added
- Operating loss improved to $77K USD; cash balance at $13K USD
Quarterly Financial Performance
Nutritional Growth Solutions (ASX: NGS) reported a challenging start to FY25 with Q1 revenue falling 24.7% quarter-on-quarter to $447,000 USD ($715,000 AUD). The decline was primarily attributed to a strategic reduction in marketing expenditure aimed at conserving capital during a period of operational transition. Despite the revenue dip, the company managed to improve its operating loss to $77,000 USD ($123,000 AUD), reflecting tighter cost controls and financial discipline.
Capital Raise Strengthens Balance Sheet
In a critical move to bolster liquidity, NGS successfully completed a $1 million AUD placement of convertible notes in April 2025. The funds are expected to be received by early May and will provide a vital runway as the company accelerates its retail expansion plans. The convertible notes issuance, supported by sophisticated Australian investors, is subject to shareholder approval for conversion into ordinary shares, aligning investor interests with the company’s growth trajectory.
Retail Expansion: CVS and Walmart
NGS is gearing up for a significant retail presence boost with the upcoming launch of its Happy Tummies® product in 5,500 CVS stores across the United States, scheduled for shipment starting July 1, 2025. This launch marks a substantial increase in physical distribution and is expected to drive brand visibility and sales momentum. Concurrently, NGS is expanding its footprint in Walmart by adding a third flavor SKU of its KidzProtein® nutritional shake mixes, reinforcing its commitment to broadening product offerings in a key retail partner.
Operational and Financial Management
The company has been actively managing its debt facilities, repaying unsecured loans from Shopify and Amazon Lending, while entering a new $120,000 USD unsecured facility with Amazon in mid-April 2025. These moves indicate a focus on optimizing financing costs and maintaining operational flexibility. CEO Stephen Turner highlighted the appointment of Manik Pujara as CFO, emphasizing ongoing efforts in cost control and financial efficiency to position NGS for sustainable growth.
Outlook and Investor Confidence
While the revenue contraction and low cash balance of $13,000 USD at quarter-end underscore near-term financial pressures, the company’s strategic capital raise and retail expansion initiatives provide a foundation for optimism. Management remains confident that these developments will drive the company closer to profitability and deliver long-term shareholder value. The coming quarters will be critical in translating expanded retail distribution into tangible revenue growth.
Bottom Line?
NGS’s retail expansion and capital raise set the stage for a pivotal growth phase, but execution risks and cash constraints remain key watchpoints.
Questions in the middle?
- How will the CVS launch impact NGS’s revenue trajectory in the coming quarters?
- What are the terms and potential dilution effects of the $1M convertible notes placement?
- Can NGS sustain operations and growth with its current cash position before further capital is raised?
