NAPLES, Fla.--(BUSINESS WIRE)--Naples Soap Company, Inc (OTC PINK: NASO), a health and wellness brand that offers high-quality skin and hair care products, today reported results for the period ending June 30, 2023.
“We’re continuing to see the effects of high inflation on consumer spending, a slow-down in tourism and the lingering consequences of Hurricane Ian. These three factors have contributed to a decrease in our retail store sales and our wholesale business. Our e-commerce sales have been less impacted and are up for the year,” said Deanna Wallin, founder and CEO of Naples Soap Company. Total sales for the six months ended June 30, 2023 were approximately $5.62 million compared to approximately $5.77 million for the six months ended June 30, 2022, a 3% decrease.
- Retail store sales for the six months ended June 30, 2023 decreased 5%, compared to the six months ended June 30, 2022. Total retail store sales through June 30, 2023 totaled $4.14 million. It’s worth noting that the Company has been without one of its top performing stores due to Hurricane Ian damage. In the first half of 2022, the Sanibel store generated $344 thousand in sales. This store remains under construction with a projected reopening date of early 2024.
- Wholesale sales through June 30, 2023 represented 3.7% of total revenues or $211 thousand. For the six months ended June 30, 2023, the wholesale division sales decreased 11%, compared to the six months ended June 30, 2022.
- E-commerce sales, including direct-to-consumer and amazon.com sales, for the six months ended June 30, 2023 saw an increase of 7% compared to the six months ended June 30, 2022. Total E-commerce sales through June 30, 2023 totaled $1.27 million.
“In the second quarter of 2023, we focused much of our efforts on opening four new Florida locations. These locations were originally projected to open in the fourth quarter of 2022; however, due to developer-related construction delays and hurricane-related delays, the new stores opened approximately six months later than planned,” stated Deanna Wallin. “Our Santa Rosa Beach store located in the Panhandle of Florida opened in April of 2023. This location is a nice complement to our retail footprint because this region’s tourist season is during the summer, when we typically see a decline in tourism in south Florida. In May, we opened our first location in southeast Florida in Plantation. We’ve built a strong following of customers in Broward, Palm Beach and Miami-Dade counties, so this new location will provide us the opportunity to continue to grow within this geographic area. At the beginning of June, we opened a new location in Venice at Wellen Park. This location fills the geographic void between our Punta Gorda and Lakewood Ranch store. Lastly, at the end of June, we opened a fourth location in The Villages in the center of the state.”
The Company has worked diligently to manage its cost of goods by developing relationships with new manufacturers to bring in products at higher profit margins that complement the Company’s core product lines.
● The combined year-to-date gross margin percentage for retail stores has been steadily increasing since this initiative was put into place. The gross margin percentage was 69.7% for April of 2023, 72.3% for May of 2023, and 73.3% for June of 2023.
● Gross profit for the six months ended June 30, 2023 was approximately $4.02 million compared to $4.18 million for the six months ended June 30, 2022, a 4% decrease.
“In addition to managing our cost of goods, we remain focused on managing our overall expenses,” said Wallin. “Wages and benefits are very competitive in Florida, but we’ve controlled these costs by adjusting our store hours and staffing models.”
Through other cost-cutting measures including new vendor relationships for supplies, the Company has decreased administrative expenses by 13% through June 30, 2023 as compared to June 30, 2022. The Company kept occupancy and lease expenses to a modest 3.8% despite the addition of four new stores. Marketing expenses were also kept to a small increase of 2.1% over the same period.
● Net income for the six months ended June 30, 2023 was a loss of approximately $586 thousand compared to income of $318 thousand for the six months ended June 30, 2022. The 2022 net income included the gain on the sale of the former warehouse, which totaled $752 thousand.
About Naples Soap Company
Founded in 2009 by Deanna Wallin, Naples Soap Company is a producer of more than 300 bath, body and personal care products. Products are sold at the Company’s 13 retail locations in Florida. Naples Soap Company products are sold online from the Company’s website at www.naplessoap.com, through other DTC (direct-to-consumer) channels such as Amazon.com and in more than 300 boutiques, spas and stores throughout the United States via the Company’s wholesale division. For more information about Naples Soap Company, visit www.naplessoap.com.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are subject to uncertainty and may not come to fruition. Readers are cautioned not to place undue reliance on any forward-looking statement including statements that list numbers and dates.
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