Edible Garden Exits Low-Margin Product Lines, Invests in Higher-Margin CEA-Informed Products.

Edible Garden AG reported strong core business performance for Q1 2025, driven by disciplined portfolio optimization and targeted investments in higher-margin, innovative products. The company eliminated underperforming, low-margin product lines and expanded its global reach, positioning itself for leadership in shelf-stable, better-for-you consumer packaged goods.

Edible Garden AG Incorporated (EDBL, EDBLW) reported robust core business performance for the first quarter of 2025, underscoring its strategic focus on higher-margin, innovative products. The company's disciplined portfolio optimization strategy, which involved exiting low-margin product lines and investing in better-for-you, shelf-stable goods, has positioned it to lead in the growing market for wellness-oriented consumer packaged goods (CPG).

Key financial highlights for the quarter ended March 31, 2025, include:

- Revenue: The company reported revenue of $3.1 million, a decrease of $1.2 million year-over-year. This decline was primarily attributed to the strategic exit from the floral and lettuce categories, which had high costs and low returns.
- Gross Profit: Gross profit totaled $634,000, a significant decrease from $1.56 million in Q1 2024. This was due to shifts in product mix, sales volume, and higher labor and raw material costs.
- Non-Perishable Revenue: Non-perishable revenue increased by approximately 15% year-over-year, driven by strong performance across shelf-stable product lines such as Kick Sports Nutrition, Pickle Party™, Pulp®, and Vitamin Whey®.
- Operating Expenses: Selling, general, and administrative expenses (SG&A) increased to $4.2 million, up from $2.7 million in the prior year, driven by legal costs related to acquisitions, expenses associated with the Narayan transaction, and franchise tax charges.
- Net Loss: The company reported a net loss of $4.0 million for the quarter, compared to a net loss of $1.9 million in Q1 2024. The year-over-year increase in net loss was primarily driven by higher SG&A expenses and a decline in revenue from the exit of low-margin product categories.

Edible Garden's CEO, Jim Kras, stated, "Our results this quarter validate the disciplined choices we’ve made to focus on higher-margin, innovation-driven categories that align with where the market is headed. By exiting underperforming, low-margin product lines and investing in CEA-informed, better-for-you shelf-stable products, we are building a stronger, more resilient portfolio."

The company's strategic initiatives, including the launch of Kick Sports Nutrition on Amazon and the debut of the first USDA Certified Organic Hydroponic Basil, have contributed to its diversification and leadership in controlled environment agriculture (CEA). International vitamin and supplements revenue rose by 66.5%, driven by new distribution partnerships and expanded retail placements.

Edible Garden's focus on innovation, brand expansion, and operational sustainability is well-aligned with the growing demand for better-for-you CPG products. The global functional food and beverage market is expected to grow from $400 billion to $610 billion by 2030, while the U.S. natural, organic, and functional product sales are projected to reach $386 billion by 2028, growing about 5% annually [1].

The company will host a conference call today at 8:00 A.M. Eastern Time to discuss its financial results and corporate progress. The call will be available via telephone and webcast, with a replay available for a limited time [2].

References:
[1] https://www.marketscreener.com/news/edible-garden-delivers-strong-performance-across-core-and-key-segments-driven-by-strategic-portfoli-ce7c51d9d889f127
[2] https://ediblegardenag.com/presentations/