Starco Brands, Inc. (STCB) reported a challenging third quarter for 2024, with revenues of $14.0 million, down 8% from $15.2 million in Q3 2023. The decline was primarily attributed to reduced sales from Soylent due to a product category realignment at a major retail customer, although this was partially offset by increased sales from the Winona and Art of Sport brands. For the nine months ended September 30, 2024, total revenues increased by 10% to $41.8 million, largely due to a full nine months of revenue from Soylent, which was acquired in February 2023.

The company's gross profit for Q3 2024 was $6.4 million, a decrease from $7.7 million in the same quarter last year. For the nine-month period, gross profit fell to $19.1 million from $20.3 million in 2023. Total operating expenses surged to $12.0 million in Q3 2024, compared to $5.0 million in Q3 2023, reflecting increased costs associated with the acquired businesses and a shift from independent contractors to full-time employees. This led to a significant loss from operations of $5.6 million in Q3 2024, compared to an income of $2.7 million in Q3 2023. The net loss for Q3 2024 was $6.3 million, a stark contrast to the net income of $2.4 million reported in the same period last year.

For the nine months ended September 30, 2024, the net loss expanded to $22.1 million from $5.3 million in 2023. The increase in losses was driven by higher operating expenses and a fair value share adjustment loss of $15.7 million related to the Soylent acquisition. The company’s accumulated deficit as of September 30, 2024, stood at approximately $86.1 million.

On the balance sheet, total current assets increased to $29.0 million from $25.2 million at the end of 2023, while total liabilities rose to $63.7 million from $57.7 million. Starco Brands’ stockholders’ equity decreased to $13.3 million from $17.2 million during the same period. The company reported cash and cash equivalents of $1.6 million as of September 30, 2024, down from $1.8 million at the end of 2023.

Strategically, Starco Brands has focused on expanding its product lines through acquisitions, including Soylent, AOS Group, and Skylar Body. Management aims to increase revenue while reducing expenses as a percentage of revenue and is exploring alternative financing options to manage current debt. The company continues to face challenges in the competitive consumer products market, which includes major players like Johnson & Johnson and Procter & Gamble.