Starco Brands, Announces Inc. (OTCQB: STCB), an innovation-driven company known for developing and acquiring behavior-changing technologies and consumer brands, has issued a comprehensive business update in conjunction with the filing of its Form 10-K for the fiscal year ended December 31, 2024. The update reflects a year of transformation, strategic streamlining, and the implementation of forward-thinking initiatives designed to position the Company for long-term profitability and accelerated growth.
CEO Commentary: Laying the Foundation for Scalable Growth
Ross Sklar, Chairman and CEO of Starco Brands, reflected on the year’s performance and strategic evolution, stating, “Our fourth quarter served as a culmination of the extensive work we’ve done throughout 2024. It marked a major turning point for Starco Brands. Announces Through careful integration of our acquisitions, workforce optimization, and cost reductions in logistics and marketing, we’ve taken tangible steps toward our goal of building a lean, scalable business.”
Sklar emphasized that what began as a vision to unify operations across acquired entities has matured into a cohesive platform that delivers measurable efficiency. “We’ve significantly expanded our retail distribution network, introduced exciting new products to market, and implemented a disciplined financial plan that enhances inventory turnover and revenue predictability. Announces These foundational moves have not only reduced our fixed costs but are now contributing to greater liquidity and financial flexibility.”
Looking ahead, Sklar expressed confidence in the Company’s trajectory for 2025 and beyond. “With the operational heavy lifting largely complete, we are in an ideal position to capitalize on our progress. Our strong product pipeline, combined with targeted distribution expansion and support from our U.S.-based manufacturing partners, puts us in a prime position to unlock topline growth while improving margins and generating free cash flow.”
Fourth Quarter 2024 Financial Overview
For the fourth quarter ended December 31, 2024, Starco Brands reported net revenue of $12.1 million, down from $18.5 million in the same period the previous year.Announces A significant factor in this decline was the completion of year-end one-time balance sheet reconciliations, which had a temporary impact on reported revenue. Additionally, continued supply chain constraints led to out-of-stock scenarios that particularly affected e-commerce channels.
Retail sales also declined due to a major retailer restructuring its ready-to-drink meal replacement product category, which impacted volumes. Another contributor to the reduced revenue was lower sales of Whipshots, as prior year figures were boosted by large inventory stocking orders that were not repeated in 2024. Furthermore, overall U.S. alcohol sales were weaker, prompting distributors to lower their inventory expectations going into 2025.
Despite these headwinds, growth was recorded in other product lines. Winona Popcorn Spray continued to gain momentum, supported by broader distribution and increased shelf velocity. Art of Sport, the Company’s men’s wellness and personal care brand, also saw consistent growth.
Gross profit for Q4 2024 was $1.8 million, compared to $5.7 million in Q4 2023. The decline reflects not only the reduced revenue but also a shift in product mix toward lower-margin items.
Operational Efficiencies and Expense Management
Marketing, general, and administrative (MG&A) expenses for the quarter totaled $4.8 million, representing 40% of reported revenue, compared to $6.9 million, or 37%, in Q4 2023. Compensation expenses were significantly reduced, falling to $1.8 million from $10.6 million in the prior year period. Professional fees also declined to $0.8 million, down from $1.7 million in 2023.
These improvements were the result of a comprehensive efficiency drive, including the integration of acquisitions, benefits from a shared services platform, and aggressive cost optimization. Announces The Company successfully identified and eliminated approximately $3 million in operating expenses, a move that directly supported improved cash flow.
Despite the revenue contraction, the Company reported an unadjusted net profit of $4.8 million for Q4 2024. This compares favorably to a net loss of $41.1 million in Q4 2023. The turnaround was aided by non-cash items, including a $26.2 million gain from fair value adjustments and a $14.3 million goodwill impairment charge.
Full Year 2024 Financial Highlights
For the full year ended December 31, 2024, Starco Brands posted net revenue of $58.7 million, a slight decline from $63.6 million in 2023. The year-over-year drop was primarily driven by intermittent out-of-stock issues on key products, which have since been resolved.
Gross profit for 2024 was $20.9 million, down from $26.0 million in the prior year. Meanwhile, MG&A expenses fell to $18.9 million, or 32% of revenue, compared to $19.8 million, or 31%, in 2023. Compensation costs were trimmed to $9.0 million, from $15.9 million in 2023, and professional fees were reduced from $5.9 million to $3.5 million.
The Company reported an unadjusted net loss of $17.3 million for the year, a significant improvement over the $46.4 million net loss recorded in 2023.
Adjusted EBITDA and Financial Position
Adjusted EBITDA for 2024 was approximately $1.3 million, compared to $6.2 million in 2023. While the figure declined year-over-year, it reflects a more stabilized and focused operating structure, with improved prospects for 2025 as new growth initiatives take hold.
As of December 31, 2024, Starco Brands reported $1.2 million in cash and $8.2 million in inventory. This compares to $1.8 million in cash and $10.7 million in inventory at the close of 2023.
Segment Performance
- Starco Brands Segment: This includes Whipshots, Winona, and Art of Sport. Gross revenue came in at $12.1 million for the year, down from $16.3 million in 2023. Gross profit was $6.8 million, down from $12.4 million, driven by a decline in high-margin Whipshots sales. However, Winona showed strong retail expansion, particularly at Walmart, helping offset some of the decline.
- Skylar Segment: The clean fragrance and skincare brand generated $10.5 million in gross revenue, roughly flat compared to $10.7 million in 2023. Gross profit also remained stable at $6.2 million.
- Soylent Segment: As the most recent addition to the Starco portfolio, Soylent contributed $36.1 million in gross revenue in 2024. Gross profit for the year was $7.8 million, up from $7.4 million in 2023. Soylent was acquired in February 2023, so 2023 figures reflect only a partial year of ownership.
