Chanson International Holding Announces First Half of Fiscal Year 2024 Financial Results
Rhea-AI Summary
Chanson International Holding (Nasdaq: CHSN) reported its financial results for the first half of fiscal year 2024. Despite facing challenges, the company maintained a gross margin above 40% through cost control measures and improved efficiency. Key financial highlights include:
- Total revenue: $7.5 million, down 14.4% year-over-year
- Gross profit: $3.1 million, down 27.8% year-over-year
- Net income: $0.02 million, compared to $0.3 million last year
- Basic and diluted EPS: $0.002, down from $0.027 last year
The company experienced revenue declines in both China and U.S. stores due to economic pressures and increased competition. However, Chanson remains focused on expansion initiatives and aims to drive revenue through new customer acquisition and repeat business.
Positive
- Maintained gross margin above 40% through cost control measures and improved efficiency
- Increased cash reserve to $4.1 million as of June 30, 2024, up from $1.5 million on December 31, 2023
- Net cash provided by operating activities increased to $0.8 million from $0.6 million year-over-year
- Revenue from beverage products in China increased by 14.8% due to expansion of coffee business
Negative
- Total revenue decreased by 14.4% to $7.5 million year-over-year
- Gross profit declined by 27.8% to $3.1 million year-over-year
- Net income decreased to $0.02 million from $0.28 million year-over-year
- Revenue from U.S. stores decreased by 42.2% due to increased competition and closure of Chanson Greenwich
- Gross margin decreased by 7.7 percentage points to 41.5%
News Market Reaction – CHSN
In the trading session that priced this news, CHSN declined 2.81%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
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Mr. Gang Li, Chairman of the Board of Directors and Chief Executive Officer of the Company, commented, "In the first half of fiscal year 2024, despite facing various challenges, we have shown resilience and adaptability in a dynamic market. While we experienced a slight decline in revenue, we have successfully maintained our gross margins at above
First Half of Fiscal Year 2024 Financial Summary
- Total revenue was
$7.5 million $8.8 million - Gross profit was
$3.1 million $4.3 million - Gross margin was
41.5% , compared to49.2% for the same period of last year. - Net income was
$0.02 million $0.3 million - Basic and diluted earnings per share were
$0.002 $0.027
First Half of Fiscal Year 2024 Financial Results
Revenue
Total revenue was
China Stores
- Revenue from the China Stores was
$6.5 million 7.3% , from$7.0 million - Revenue from bakery products was
$5.9 million 7.3% , from$6.4 million China has recovered at a slower pace than expected, and the spending behavior of consumers has been affected by various factors, such as the economic downward pressure and lack of consumer confidence. As a result, revenue from bakery products decreased due to the decline in average spending per customer and the consumption downgrade during the six months ended June 30, 2024. - Revenue from other products was
$0.58 million 7.0% , from$0.62 million $0.36 million 16.4% from$0.44 million $0.22 million 14.8% from$0.19 million
United States Stores
- Revenue from the
U.S. Stores was$1.0 million 42.2% from$1.8 million - Revenue from bakery products remained relatively stable at
$0.24 million 2.6% from$0.23 million $0.1 million $0.09 million New York City , customers now have more choices and revenue from bakery products of Chanson 23rd Street and Chanson Greenwich were affected. With the increased competition, Chanson Greenwich closed its business operation in the second half of fiscal year 2023. - Revenue from beverage products was
$0.6 million 37.2% from$1.0 million - Revenue from eat-in services was
$0.2 million 69.7% from$0.6 million $0.4 million $0.01 million $0.02 million
Gross Profit and Gross Margin
Gross profit was
Operating Expenses
Operating expenses were
- Selling expenses were
$2.2 million for the six months ended June 30, 2024, which decreased by8.7% , from$2.4 million for the same period of last year. The decrease was mainly due to decreased selling expenses of approximately$0.2 million $0.07 million - General and administrative expenses were
$1.5 million for the six months ended June 30, 2024, which decreased by17.9% from$1.8 million for the same period of last year. The decrease was primarily due to the closure of Chanson Greenwich as mentioned above.
Net Income
Net income was
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were
Balance Sheet
As of June 30, 2024, the Company had cash of
Cash Flow
Net cash provided by operating activities was
Net cash provided by investing activities was
Net cash provided by financing activities was
About Chanson International Holding
Founded in 2009, Chanson International Holding is a provider of bakery, seasonal, and beverage products through its chain stores in
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the
For investor and media inquiries, please contact:
Chanson International Holding
Investor Relations Department
Email: IR@chansoninternational.com
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, | December 31, | |||||||
2024 | 2023 (Audited) | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 4,107,830 | $ | 1,481,302 | ||||
Accounts receivable | 2,022,587 | 1,995,067 | ||||||
Inventories | 785,327 | 723,905 | ||||||
Long term loan to a third-party, current | 1,999,507 | - | ||||||
Prepaid expenses and other current assets | 4,287,721 | 5,134,173 | ||||||
13,202,972 | 9,334,447 | |||||||
NON-CURRENT ASSETS: | ||||||||
Operating lease right-of-use assets | 12,922,888 | 13,059,561 | ||||||
Property and equipment, net | 5,006,112 | 5,462,063 | ||||||
Intangible assets, net | 140,625 | 150,000 | ||||||
Long term security deposits | 843,793 | 894,715 | ||||||
Prepayment for the software, equipment and product development | 140,000 | 790,000 | ||||||
Long term debt investment | 6,359,014 | 6,534,575 | ||||||
Long term loan to a third-party | - | 2,066,822 | ||||||
Long term prepaid expenses | 108,313 | 142,113 | ||||||
25,520,745 | 29,099,849 | |||||||
TOTAL ASSETS | $ | 38,723,717 | $ | 38,434,296 | ||||
LIABILITIES | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank loans | $ | 3,086,939 | $ | 2,683,692 | ||||
Accounts payable | 2,120,980 | 1,919,189 | ||||||
Due to a related party | 46,675 | 48,042 | ||||||
Taxes payable | 77,015 | 96,176 | ||||||
Deferred revenue | 7,338,357 | 7,085,696 | ||||||
Operating lease liabilities, current | 2,448,062 | 2,198,192 | ||||||
Other current liabilities | 620,251 | 697,702 | ||||||
15,738,279 | 14,728,689 | |||||||
NON-CURRENT LIABILITIES | ||||||||
Operating lease liabilities, non-current | 10,931,463 | 11,691,251 | ||||||
10,931,463 | 11,691,251 | |||||||
TOTAL LIABILITIES | 26,669,742 | 26,419,940 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Ordinary shares, | ||||||||
Class A ordinary share, | 6,755 | 6,485 | ||||||
Class B ordinary share, | 5,670 | 5,940 | ||||||
Additional paid-in capital | 11,800,472 | 11,800,472 | ||||||
Statutory reserve | 447,231 | 447,231 | ||||||
Accumulated deficit | (126,842) | (150,254) | ||||||
Accumulated other comprehensive loss | (79,311) | (95,518) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 12,053,975 | 12,014,356 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 38,723,717 | $ | 38,434,296 | ||||
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||
COMPREHENSIVE INCOME (LOSS) | ||||||||
For the Six Months Ended | ||||||||
2024 | 2023 | |||||||
REVENUE | $ | 7,542,682 | $ | 8,811,287 | ||||
COST OF REVENUE | 4,415,407 | 4,478,716 | ||||||
GROSS PROFIT | 3,127,275 | 4,332,571 | ||||||
OPERATING EXPENSES | ||||||||
Selling expenses | 2,230,905 | 2,444,292 | ||||||
General and administrative expenses | 1,456,499 | 1,774,419 | ||||||
Total operating expenses | 3,687,404 | 4,218,711 | ||||||
(LOSS) INCOME FROM OPERATIONS | (560,129) | 113,860 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest (expense) income, net | (25,278) | 14,007 | ||||||
Other income (loss), net | 314,670 | (11,843) | ||||||
Interest income from long term debt investment | 359,014 | 171,616 | ||||||
Total other income, net | 648,406 | 173,780 | ||||||
PROFIT BEFORE INCOME TAX EXPENSE | 88,277 | 287,640 | ||||||
INCOME TAX EXPENSE | (64,865) | (2,880) | ||||||
NET INCOME | 23,412 | 284,760 | ||||||
Foreign currency translation gain (loss) | 16,207 | (305,867) | ||||||
TOTAL COMPREHENSIVE INCOME (LOSS) | $ | 39,619 | $ | (21,107) | ||||
Earnings per ordinary share - basic and diluted | $ | 0.002 | $ | 0.027 | ||||
Weighted average shares - basic and diluted | 12,425,319 | 10,666,906 | ||||||
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For the Six Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 23,412 | $ | 284,760 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Amortization of operating lease right-of-use assets | 1,697,141 | 1,422,155 | ||||||
Depreciation | 445,787 | 402,784 | ||||||
Impairment loss on property and equipment | - | 5,434 | ||||||
Accrued interest income from long term debt investment | (359,014) | (171,616) | ||||||
Interest income from loan to a third-party | (44,877) | (21,452) | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (40,507) | (772,933) | ||||||
Inventories | (65,027) | 88,841 | ||||||
Prepaid expenses and other current assets | 286,121 | 73,944 | ||||||
Long term security deposits | 49,350 | (17,375) | ||||||
Long term prepaid expenses | 32,953 | 21,534 | ||||||
Accounts payable | 213,875 | 216,032 | ||||||
Taxes payable | (19,020) | (109,830) | ||||||
Deferred revenue | 299,816 | 522,418 | ||||||
Other current liabilities | (79,738) | 35,633 | ||||||
Operating lease liabilities | (1,634,128) | (1,370,175) | ||||||
Net cash provided by operating activities | 806,144 | 610,154 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (34,268) | (152,022) | ||||||
Proceeds from disposal of property and equipment | 34,562 | - | ||||||
Payment made for long term debt investment | - | (6,000,000) | ||||||
Interest income received from long term debt investment | 534,575 | - | ||||||
Advance of loans to third parties | - | (3,900,000) | ||||||
Repayment from loans to third parties | 862,088 | - | ||||||
Prepayment for the software, equipment and product development | - | (1,200,000) | ||||||
Net cash provided by (used in) investing activities | 1,396,957 | (11,252,022) | ||||||
Cash flows from financing activities: | ||||||||
Gross proceeds from initial public offerings | - | 13,560,000 | ||||||
Direct costs disbursed from initial public offerings proceeds | - | (1,529,631) | ||||||
Proceeds from short-term bank loans | 422,095 | - | ||||||
Payments made to a related party | (56,298) | (1,612,215) | ||||||
Payments made for deferred offering costs | - | (312,125) | ||||||
Prepayment for the related service after listing | - | (450,000) | ||||||
Net cash provided by financing activities | 365,797 | 9,656,029 | ||||||
Effect of exchange rate fluctuation on cash and cash equivalents | 57,630 | (457,647) | ||||||
Net increase (decrease) in cash and cash equivalents | 2,626,528 | (1,443,486) | ||||||
Cash and cash equivalents, beginning of period | 1,481,302 | 2,915,470 | ||||||
Cash and cash equivalents, end of period | $ | 4,107,830 | $ | 1,471,984 | ||||
Supplemental cash flow information | ||||||||
Cash paid for income taxes | $ | 40,889 | $ | 9,436 | ||||
Cash paid for interest | $ | 68,450 | $ | 8,364 | ||||
Non-cash operating, investing and financing activities | ||||||||
Reduction of right-of-use assets and operating lease obligations due to early termination | $ | 60,277 | $ | - | ||||
Right of use assets obtained in exchange for operating lease liabilities | $ | 1,697,141 | $ | 1,103,383 | ||||
Deferred IPO cost offset with additional paid-in capital | $ | - | $ | 1,059,521 | ||||
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SOURCE Chanson International Holding