Live Verdure (ASX: LV1) achieved record orders, sales and cash receipts for the March quarter (Q3 FY2022), with online sales up 9%, and the company attributing the performance to its direct-to-consumer business strategy.
Overall sales for Q3 FY2022 hit $558,000, which represented a 285% rise on the Q3 FY2021 and an increase of 8% on the December quarter (Q2 FY2022).
Out of this figure, online sales were $553,000 – accounting for 99% of all sales for Q3 FY2022, which is up from 98% in Q2 FY2022.
Cash receipts for Q3 FY2022 were an all-time high of $553,000 – driven by a record number of orders.
Propelling the record orders was Live Verdures focus on its “fast-selling high-margin” products including TheraJoint+, TheraNight+ and its Hemp Seed Oil capsules.
Live Verdure noted a jar of capsules was sold once approximately every seven minutes during Q3 FY2022.
“These results are especially pleasing given Q3 is generally a softer quarter for online sales due to reduced discretionary consumer spending post-Christmas,” the company noted.
To support increased sales and remaining ahead of supply chain issues, the company increased its investment in inventory during Q3 FY2022.
This included sourcing raw materials for its hero products – TheraJoint+ and TheraNight+.
“This increased investment in inventory ensures the company is best placed to navigate possible disruptions due to the aforementioned global supply chain issues and is reflected in the product manufacturing and operating costs,” Live Verdure explained.
While building inventory to support higher sales, Live Verdure also invested in existing and new marketing initiatives to further push growth.
As part of this, the company improved its presence on Instagram and TikTok, while also evaluating new channels.
“We expect this to drive an improved return on investment on our digital spend,” the company stated.
Advertising and marketing expenditure for Q3 FY2022 was in line with Q2 FY2022 spending.
Additionally, Live Verdure said it had brought its media-buying function in-house, which can improve quality while reducing costs.
Shoring up its initiatives is Live Verdures strong digital capability in acquiring paying customers, while also driving repeat customers.
The company is exploring opportunities to optimise its customer life-time value with a focus on securing high-value new customers that are more likely to become repeat customers – and ultimately driving the company towards profitability.
According to Live Verdure, its marketing investments and initiatives had already resulted in a reduction in expenditure of about $150,000 a quarter.
For Q3 FY2022, this equates to 3% improvement in return on advertising spend.
Live Verdure expects the full impact of these initiatives will be realised in the June quarter.
Operational highlights and outlook
As it advances throughout the year, using its direct-to-consumer business model, Live Verdure plans to increase online sales further by launching new products, continuing to scale promotional campaigns, leveraging its customer database and scaling scales on Amazon US and Australian global market places.
As part of its new product launches, Live Verdure progressed its 8 Seeds hemp-based skincare brand during Q3 FY2022.
The company is targeting a soft launch for the range in the September quarter, with initial products to be sold comprising a daily hydrating facial moisturiser with SPF, facial serum, cleansing oil and body repair crème.
A pre-production run of these initial products is underway.
Live Verdure’s existing 13 Seeds product range is already available, and the company revealed it had advanced its US expansion efforts with the launch of the products on Walmart.com in March.
TheraJoint+ and TheraNight+ are currently available in the US via Walmart’s e-commerce platform, which receives around 100 million visitors a month.
The products have also been available on Amazon US since mid-2021.