Charlotte’s Web Stock Falls After Reporting Q1 Results

Charlotte's Web stock

Charlotte’s Web stock is trading lower in Wednesday's session after Charlotte's Web Holdings (CSE:CWEB) (OTCQX:CWBHF) reported in-line Q1 earnings.

Boulder, Colorado-based hemp producer Charlotte’s Web Holdings released its Q1 earnings, and in a significant development, the company has managed to meet the projections for its earnings that it had announced last month.

However, it is important to note that Charlotte’s Web failed to meet analyst estimates for the bottom line and top line. The company has also stated that the full-year outlook remains as indicated earlier.

Revenue Jumps 66%

Charlotte’s Web reported revenues of $21.7 million, which reflected a year-on-year rise of 66%. The profit for the quarter stood at $2.1 million, which is a drop from $3.1 million in the same quarter in 2018. The earnings per share stood at 3 cents. That being said, it is believed that the drop in profits is due to a temporary rise in expenses.

Analysts estimated revenues of $22.7 million and earnings per share of 5 cents. The rise in costs has been the biggest reason behind the contraction in profits. Costs rose to $13.2 million in the quarter, as opposed to $6.4 million last year and much of the expenses are being directed towards expansion, better infrastructure, and staff costs.

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Charlotte’s Web stock is down by over 3.50% and now selling at $14.24 on the OTC market. On the Canadian side, CWEB stock is trading at $19.33, down about 3%.

Business Overview: Charlotte's Web Stock

Charlotte’s Web Holdings’ biggest propeller for growth came about in December last year when the US Congress legalized the production of hemp-based items. Since then, the company has gone on an expansion spree and has beefed up its retail presence considerably. Currently, the company’s products can be found in as many as 6,000 locations, as opposed to 3,680 last year. In addition to that, the total area under hemp cultivation is also being expanded aggressively, and in 2019, the total cultivated area will go up to 700 acres. The company is engaged in producing hemp-based CBD products, and that remains its strongest suit.

Separately, the company also stated that it is going to be uplisted from the Canadian Securities Exchange to the Toronto Stock Exchange at market close on May 30.

Charlotte’s Web has been increasing selling activities since April and dropped almost 40% from its all-time peak price of $25 on the OTC market.

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