This one stood out immediately because the consumer interest was there from day one. We’re talking about a small company that opened the first plant-based butcher shop on the west coast of Canada – incredibly, they had over 1,000 guests show up for the launch!
Today, Very Good Food Co. (CSE: VERY, OTC: VRYYF) offers premium plant-based meats that are not only sold online but can also be found on the shelves of over 150 retailers and restaurants.
You really have to consider the growth potential here. Each pound of product sells for an average of $16 and the current market cap is only $80 million… And while Very Good Food Co. started out in Canada and is doing great business there, the company is already expanding into the U.S. market with a massive production facility in California.
This is a high-conviction start-up with a strong balance sheet and a true sense of ownership among the company’s stakeholders. In fact, Very Good Food Co. recently did a financing and the two co-founders own 30% of the outstanding shares.
The company’s also at the epicenter of one of the most expansive markets on the planet. The annual growth rate reminds me of the electric vehicle market or cannabis right before stock traders discovered their potential and ran the share prices up:
With that kind of momentum, it wasn’t hard to predict that there would be big numbers when earnings season rolled around. Admittedly, the bar was set high so it wouldn’t be easy for Very Good Food Co. to beat the quarterly revenue projections.
I sent out multiple alerts because I knew that the results would be outstanding, but then the second-quarter earnings report was released and it was a real show-stopper:
- $1,100,816 in quarterly revenues. That’s an increase of 395% year-over-year! It’s also an improvement of 225% quarter-over-quarter.
- A gross profit margin of 42% over a six-month period, marking a significant improvement from 34%.
- Total assets of $6,757,062, including a cash balance of $3,508,826 – remember, I told you about the strong balance sheet!
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I’ve seen a whole of earnings releases in 2020, but it’s not every day that you see a nearly 400% revenue increase. It’s entirely possible that you won’t see anybody’s revenue gains come close to that for the remainder of the year – unless Very Good Food Co. has another blockbuster quarter, which wouldn’t surprise me at all.
How can we account for this headline-grabbing revenue growth? The demand for the product was a contributing factor, but there was also a substantial increase in Very Good Food Co.’s eCommerce store sales, which are associated with an eCommerce partnership agreement the company entered into in March.
CEO Mitchell Scott lauded the company’s tremendous success, saying “We were extremely pleased with our financial performance this quarter, with revenue growth and gross margins both producing industry-leading results.” Scott also noted Very Good Food Co.’s very healthy balance sheet, as well as the quickly growing demand for their products.
The next milestone is international expansion – North America today, and you never know where Very Good Food Co. will be in the near future as the company charges forward and the revenues pour in fast and furious.
Chief Editor, CrushTheStreet.com
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