Pacific Trader: Simply Better Brands has a hit on its hands

The Vancouver company’s snack bars are flying off store shelves, and its stock is flying, too

The stock: It’s notoriously difficult for small consumer packaged goods companies to find space on store shelves dominated by the likes of Coca-Cola and Procter and Gamble, but every once in a while an outlier punches through. That appears to have happened in the case of Simply Better Brands Corp.’s (TSXV:SBBC) Trubar protein bars, which have some people on Howe Street and beyond talking.

The drivers: Thanks to strong sales in Costco and other major U.S. retailers, Trubar sales look to have tripled from US$10 million in 2022 to around US$30 million in 2023 (the company has not yet released audited financial results for the year).

Vancouver-based Simply Better Brands boasts other product lines including CBD brand PureKana Wellness (still its top revenue generator as of 2023) and No B.S. cosmetics. Its stated business model is to acquire and grow a diversified suite of plant-based micro-brands aimed at the youth market. But with the lift-off of Trubar, which tries to recreate the taste of indulgent treats like donuts in a healthier bar form, there’s speculation the company may go all-in on its emerging star.

Revenue for Q3 2023 was US$19.4 million, representing a 45 percent jump on a year earlier. The company trimmed its net loss to US$600,000, down from US$1.5 million in 2022. Earlier this month, however, SBBC parted ways with CEO Kathy Casey, meaning for the time being it can no longer call itself a “woman-founded, woman-led” company. Board member J.R. Kingsley Ward has stepped in as chair and interim CEO.

SBBC stock closed at 40 cents a share on the TSX Venture exchange Tuesday (February 27), about even over the past 12 months but up 88 percent year to date.

Word on the street: “Given Trubar’s spectacular growth rate over the past few years and the pipeline of new U.S. retail distribution, we expect SBBC to focus working capital and corporate mindshare on maximizing Trubar’s growth,” Clarus Securities analyst Noel Atkinson wrote in a note to clients last week. He rates the stock “speculative buy” with a price target of $1.25.

Coming and going: The stock of Vancouver-based Methanex Corp. (TSX:MX; NASDAQ:MEOH) tumbled 10 percent February 20 after the company announced a delay in the opening of its Geismar 3 plant in Louisiana. The plant, touted as the largest and most advanced methanol production facility in the world, is now expected to commence operations in the third quarter of this year.