The Alkaline Water Company Inc. (NASDAQ:WTER, CSE:WTER) has reported outstanding Q3 results. For the fiscal period ending December 31, 2020, the company reported record revenue of $10.2 million. That’s a massive 20% hike or $1.7 million increase year-on-year.
Ricky Wright, President and CEO of The Alkaline Water Company commented:
“We are proud to announce that we delivered record fiscal third quarter revenue of $10.2 million. Our E-Commerce, A88CBD, single-serve offerings, eco-friendly aluminum bottles, and flavor-infused waters all contributed toward the record. Each business line continues to grow, and we expect a significant contribution from them over the next 12 months.”
Alkaline Water builds on momentum
The company achieved gross profit of $4.2 million in Q3, resulting in a rise of 23.6% year-on-year. And its gross margin improved by 41.2% (110 basis points) largely thanks to the increase in sales.
CEO Wright went on to explain that the summer momentum in its flagship brand Alkaline88 has continued. Thus, ensuring Alkaline Water continues to be the fastest-growing top 10 value-added water in the country. This is based on 13-week Nielsen scanner data to 12/26/20 and strength continues in the scanner data to 1/23/21.
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Poised for continued growth
Management is encouraged that the strategic actions its previously taken now position it strongly for continued growth. Alkaline water is expecting to achieve solid returns from the investments it’s making in the coming financial year. Some of these initiatives include expanding its direct store delivery (DSD) network, which already reaches over 10,000 customers. This should reach an additional 40,000 to 80,000 customers particularly from convenience stores.
The company has also increased its budgetary allocation to its E-Commerce and digital marketing strategies in the water and CBD categories. This is to meet the ongoing demand surge in E-Commerce activity throughout the country.
It’s also expanding the programs that have shown extraordinary ROI’s in its test markets. This should drive a significant amount of sales through both its E-Commerce sites in fiscal 2022.
In addition to this the company is rolling out it’s first-ever traditional marketing campaign.
Expanding Alkaline Water’s reach
The Biden administration could also have a positive effect on the business. US representative Alexandria Ocasio-Cortez, (AOC) is progressively in favour of legalising cannabis and this should bode well for CBD derived products. Alkaline Water hopes the new administration will help clarify the nationwide guidance, smoothing its rollout.
In anticipation the company has expanded its retail distribution network for its A88CBD products through national wholesale food distributor KeHE, North American food wholesaler UNFI, health and wellness distributor BettermentRS, and consumer brands agency C.A. Fortune.
The company is also concentrating on leveraging its existing relationships to expand its reach into brick-and-mortar stores. It aims to be in thousands of retail stores in the coming months.
The company is increasing its capacity for its raw materials and finished goods to support all aspects of growth in ecommerce and across its product line. To this end it intends to announce new plants and raw material providers to increase its overall capacity and improve gross margins.
Tackling its carbon footprint
Alkaline Water understands the importance of sustainability and is aiming to significantly reduce its carbon footprint as it rolls out its strategy. By ensuring vendors are closer to existing plants it will reduce the carbon cost of transporting. One of the company’s main goals since inception is to have the smallest carbon footprint per liter of any major water brand. It has begun to include 25% recycled PET in its bulk offerings. It’s also proud of the fact it was the first national water company to offer an aluminum bottle.
“We are a Clean Beverage™ company and care about not only what goes into our products but what we can do to minimize our impact on the environment.”
All in all, the company is delighted with its progress. International expansion and rebounding the hospitality industry as the vaccine rollout takes effect, all point to an exciting road ahead.
Alkaline Water anticipates significant revenue growth in fiscal 2022. With company operations well-positioned to be an omnichannel lifestyle brand.
- Fiscal 2021 Q3 to December 31, 2020: Alkaline Water achieved record revenue of $10.2 million, an increase of 20% year-on-year.
- Gross profit in the fiscal third quarter of $4.2 million increased by 23.6% compared to the prior-year quarter.
- Fiscal 2021 Q3 EPS of ($0.06) improved by 14.3% compared to the prior-year quarter.
- Direct Store Delivery (DSD) network currently reaches over 10,000 customers. The company is aiming for 40K to 80K more.
- Alkaline88® flagship brand of premium alkaline water is now available in over 75,000 stores across all trades in the U.S.
- A88CBD™ line expands national distribution network with KeHE, UNFI, BettermentRS, and broker C.A. Fortune.